NHS faces 'compensation time bomb' as clinical negligence liabilities double

Medico-legal organisations have warned of a ticking time bomb on medical indemnity after the NHS Litigation Authority (NHSLA) announced clinical negligence liability for hospitals almost doubled to £56bn last year.

An estimated £56.1bn will be needed to pay for future clinical negligence claims for care that has already taken place, the NHSLA has revealed, a figure described as ‘astonishing’ by medico-legal groups.

This represents almost double the provisional estimate made the year before, following a £25.5bn rise.

The NHSLA said the figure reflected the ‘true cost to the NHS in today’s prices’ of the long-term damages payments it is projected to pay out over the coming decades for care that has already taken place.

It paid out £1.5bn on clinical negligence claims last year, including a 43% rise in claimants costs and a 23% increase in damage payments – money that medico-legal organisations said could be used for front-line care.

Although the NHSLA figures are for claims against hospitals, a spokeswoman for the Medical Defence Union (MDU) warned that they were illustrative of the increase in cost overall of clinical negligence claims, which can be seen in those made against GPs as well.

GP indemnity rising

‘We are seeing claims inflation running at 10% a year and our highest GP payment in one claim was £8.5m,’ she said. ‘This affects members’ subscriptions which must reflect increasing claims payments. The amounts paid out by the NHS also affect GPs as taxpayers, of course.

‘We are hoping the staggering rise in the NHSLA’s liability for claims will mean the government takes action to reform personal injury law, to make compensation more affordable.’

Medical Protection also called for reforms to drive down the cost of clinical negligence, warning that increases in cost to the public purse of this magnitude are ‘unsustainable’.

It said action ‘must be taken now’ to reform the legal system, such as by including fixed costs for small value claims, to make clinical negligence more affordable for society.

MDU Chief Executive, Dr Christine Tomkins said: ‘The NHSLA’s report should dispel any doubt – there is a compensation crisis and it affects every English taxpayer.

‘Today’s report underlines what the MDU has been saying for some time. The NHS is sitting on a time bomb of future claims and legal reform is the only way to address it and to keep money within the NHS for treatment of patients.

Legal reform needed

‘We hope today’s figures provide a wakeup call for the government to take the only sensible option and overhaul personal injury law. The NHS is haemorrhaging money on claims which it should be able to retain so that all patients benefit. Patients must be compensated but in a fairer, more affordable way.’

Dr Rob Hendry, medical director at Medical Protection, said: 'It’s deeply concerning to think about what the cost to the public purse may be in 10 years’ time if action isn’t taken now.

‘We do not believe that the increase in the cost of claims to the NHS is as a result of deteriorating professional standards, but is likely due to a number of factors including the increasing complexity of care, enhanced patient expectations and the challenging and expensive legal environment.

‘The fact the NHS successfully defended nearly 5,000 claims in 2015/16 highlights the scale of unmeritorious claims that are brought against the NHS.

‘We worry that diverting vital funds from frontline services to meet the increasing costs of clinical negligence claims may have an impact on patient care in the long term.’

Photo: iStock

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