MDU welcomes NAO findings that more needs to be done to control spiralling clinical negligence costs

The Medical Defence Union (MDU) has today welcomed the findings of an investigation into spiralling clinical negligence costs carried out by the National Audit Office (NAO). Its conclusion is that the government needs to take a stronger approach in order to the curb clinical negligence costs.

The MDU has long argued that only radical legal reform will halt the rising costs of claims. This need became even more urgent following the March discount rate change when it dropped to its lowest in history and immediately doubled the cost of some high value claims.

In 10 years from 2006-07 to 2016-17, clinical negligence claims notified NHS Resolution (previously the NHS Litigation Authority) doubled from 5,300 to 10,600. The annual cost of those claims rose 400% from £0.4 billion to £1.6 billion in the same period. It is expected to double again by 2020-21 to £3.2 billion [1]. The future is equally as concerning: NHS Resolution’s provision for total claims liabilities was £65.1 billion for the financial year to April 2018. The NAO report concluded: “the government lacks a coherent cross-government strategy, underpinned by policy, to support measures to tackle the rising cost of clinical negligence”[2].

Dr Michael Devlin, MDU head of professional standards and liaison, said:

“The NAO report is a welcome wake-up call that tells it how it is. The cost of claims is rising at a rate that outstrips almost all other forms of inflation, and the NHS’s total liabilities are doubling every seven years on current projections.

“The NAO report recognises that the main drivers of increasing compensation payments and legal costs, especially the legal environment, are beyond the control of NHS trusts and the Department of Health.

“The MDU has been saying for years there needs to be fundamental legal reform to ensure compensation is fair and affordable.  This grave situation was significantly worsened from 20 March 2017 when the Lord Chancellor reduced the discount rate by 3.25% as many compensation payments will double. This has brought into sharp focus the perilous state NHS trusts find themselves in. It is even worse for NHS GPs as it affects them personally. They must meet the costs of indemnity themselves.

“Payment of NHS claims diverts money from patient care and must not be allowed to continue. We urge the government to quickly move forward with a coordinated policy approach. The law must be changed and clinical negligence claims must be funded in a fair and proportionate way.”
[1] Paragraph 1.12, page 22.
[2] Paragraph 10, page 7.