64th Report - Costs of clinical negligence

Legal costs in clinical negligence claims are disproportionate for medium and low volume claims. Legal costs in clinical negligence claims have risen sharply, with claimant legal fees increasing in real terms from £148 million in 2006–07 (in 2024–25 prices) to … Read more Legal costs in clinical negligence claims are disproportionate for medium and low volume claims. Legal costs in clinical negligence claims have risen sharply, with claimant legal fees increasing in real terms from £148 million in 2006–07 (in 2024–25 prices) to £538 million in 2024–25. At 19% of total settled claim costs it is unacceptable that so much taxpayers’ money continues to be spent on legal fees. NHS Resolution has worked hard to increase the number of claims resolved without litigation (83% in 2024–25, up from 66% in 2006–07). It has also expanded its use of alternative dispute resolution and mediation. There are considerable financial benefits to these approaches which have been well received by the legal sector. However, we are extremely concerned that low-value clinical negligence claims (damages of £25,000 or less) cost far more in legal fees than victims receive in damages, with a 3.7:1 cost-to-damages ratio. The Department’s previous plans to limit the amount paid to lawyers in lower-value cases were not implemented as planned in April 2024 and remain under review. recommendation The Department should a. develop alternative dispute mechanisms to speed up decisions and reduce costs for less complex cases. As part of this, the Department should look at international examples (such as in New Zealand and Sweden) of non-adversarial and ombudsman models and assess how our ombudsman system could be improved; and b. clarify its position on a fixed recoverable costs scheme for lower-value clinical negligence cases at the earliest opportunity. Show less

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Clinical negligence claims are settled on the basis of costs of care in the private sector and yet there is nothing to stop the claimant using the NHS or publicly funded social care in the future, potentially inflating the costs … Read more Clinical negligence claims are settled on the basis of costs of care in the private sector and yet there is nothing to stop the claimant using the NHS or publicly funded social care in the future, potentially inflating the costs of claims. It is not clear the extent to which the taxpayer is paying twice for clinical negligence – once through compensation for injury 6 and then again by providing subsequent health and social care. A law from 1948 states that damages must be calculated on the presumption that care will be provided by the private sector and not the NHS or local government. NHS Resolution identified this as a major contributory factor to the increasing cost of very high-value cases (£1 million or more), where about 60% of the damages relate to future care. Although claimants can be asked to declare in court if they plan to use the NHS for treatment, this rarely happens in practice and cannot be mandated. NHS Resolution is unable to ask successful claimants for information on how they spend their award or whether they subsequently access state funded services to manage their condition. Local authorities are also not able to consider clinical negligence compensation awards when assessing eligibility for publicly funded social care. recommendation The Department should develop, within six months, proper estimates of the impact of assuming health and social care for clinical negligence victims will be provided exclusively by the private sector. It should by the same deadline set out additional measures—including any requiring changes to legislation—which it judges would effectively guard against the risk of paying twice for the care of those it has harmed and an indicative timeline for their potential implementation. 7 1 The rising costs of clinical negligence Introduction Show less

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On multiple occasions the Department told us that it was unable to comment on many aspects of current policy as a recent review into clinical negligence by David Lock KC was still being considered by ministers.9 5 C&AG’s Report, paras … Read more On multiple occasions the Department told us that it was unable to comment on many aspects of current policy as a recent review into clinical negligence by David Lock KC was still being considered by ministers.9 5 C&AG’s Report, paras 6, 7, 1.18 6 C&AG’s Report, para 14 7 Q 35 8 C&AG’s Report, para 8 9 Qq 35, 47, 63, 97, 100 10 As a result it would also not comment on whether it thought the current steps being taken to reduce clinical negligence costs would make a difference.10 The Department repeatedly assured us that the review would cover all aspects of clinical negligence, including when we asked about policies on legal costs, international comparisons, options for alternative dispute resolution, the assumptions around provision of private health and social care and the overall causes of rising costs.11 Underlying causes of harm to patients Show less

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Around three-quarters of clinical negligence claims settle for £25,000 or less, but the legal costs for these claims vastly exceed the damages payable to claimants. In 2024–25, there was a 3.7:1 ratio of claimant and NHS legal costs compared with … Read more Around three-quarters of clinical negligence claims settle for £25,000 or less, but the legal costs for these claims vastly exceed the damages payable to claimants. In 2024–25, there was a 3.7:1 ratio of claimant and NHS legal costs compared with damages payable for low-value claims.58 NHS Resolution agreed that legal costs were disproportionate for low-value cases.59 Show less

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The previous government announced plans to place limits on how much lawyers receive from lower damages clinical negligence claims of under £25,000 where 85% of cases fall within this category from April 2024, but 51 Q 50 52 C&AG’s Report, … Read more The previous government announced plans to place limits on how much lawyers receive from lower damages clinical negligence claims of under £25,000 where 85% of cases fall within this category from April 2024, but 51 Q 50 52 C&AG’s Report, paras 2.12-2.13 53 Q 64 54 Q 67 55 C&AG’s Report, paras 3.12, 3.13 56 Q 64 57 Fletchers Solicitors (CCN0013); Switalskis Solicitors (CCN0014) 58 C&AG’s Report, paras 12, 2.16 59 Q 60 16 the required legislation was not introduced.60 We understand the Civil Rules Committee has put all its work on hold and there is no ongoing work in this area. Critics of these plans have raised concerns that they would impact access to justice for legitimate victims of clinical negligence.61 NHS Resolution agreed that access to justice for people who are severely harmed but who may have a low-value claim is an important consideration that needs to be part of decision making.62 The Department told us options to reduce legal costs in low-value cases form part of the ongoing review by David Lock KC.63 Assumptions around private care Show less

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Claimant legal fees have increased in real terms from £148 million in 2006–07 (in 2024–25 prices) to £538 million in 2024–25 and now represent 15% of all settled costs. During the same period, NHS’s legal costs increased in real terms from £76 million to £159 million, but fell as a …

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Over the last 10 years, NHS Resolution has introduced several new approaches to help keep claims out of court. These alternative dispute resolution initiatives are typically less adversarial and more collaborative than conventional litigation and provide greater opportunities for claimants seeking non-monetary redress such as an explanation or apology. The …

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The government may effectively be paying twice in some instances of clinical negligence, once through the compensation given to claimants and once again through providing NHS treatment and publicly funded social care. Section 2(4) of the Law Reform (Personal Injuries) Act 1948 provides that defendants who pay for the future …

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There is no estimate of the extent to which successful clinical negligence claimants then go on to use publicly funded health or social care services for their conditions.67 We asked NHS Resolution why there is no clear data on the number of people who are paid compensation and go on …

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Written evidence from the Medical Defence Union told us that Section 2(4) of the Law Reform (Personal Injuries) Act 1948 is based on a recommendation made in 1946, two years before the establishment of the NHS, which was caveated that it “might need to be radically altered if a comprehensive …

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