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Cost of clinical negligence continues to spiral out of control

Increases in claims payments result from hostile legal climate – unrelated to quality of clinical care

Louise Prime

Monday, 16 July 2018

Urgent action is needed to curb compensation payouts for clinical negligence, the Medical Defence Union (MDU) has warned in response to new figures that reveal an almost trebling in NHS Resolution’s total liabilities in just four years. The MDU said legal reform is essential to combat the current “hostile legal climate” that it blames for the escalation in claims payments – not the quality of clinical care, which it insists remains high.

In its annual report for 2017-18*, NHS Resolution explained that in its main Clinical Negligence Scheme for Trusts (CNST), about £37bn (over 75%) of the increase results from changes in the HM Treasury discount rate that NHS Resolution must use to value future claim payments at current values; this is a matter of measurement of future cash flows, and it does not have an impact on what those cash flows will be. The organisation’s chair Ian Dilks added that a further £4.5bn results from the fall in the personal injury discount rate (PIDR) that occurred in March 2017, which he noted has a real increased cost to the NHS. He said: “Together these account for 86% of the total increase and neither can be controlled by the NHS.”

The MDU called for urgent legal reform, including a change in how compensation payments are calculated, for the benefit of all NHS users. Its chief executive Dr Christine Tomkins said: “The cost of clinical negligence claims continues to spiral out of control and it is no surprise that, while NHS Resolution has seen claims numbers stabilise, in 2017/18 it paid out a record £2.23bn compensating patients through its clinical negligence schemes. NHS Resolution’s total liabilities are estimated at £77bn, up from £65bn last year, with the CNST accounting for 93% of that provision.

“The MDU has seen the dramatic effect of the 3.25% PIDR decrease on GP claims too. NHS Resolution has already made individual compensation awards worth well over £20m, a sum which would have been unthinkable until quite recently.”

She pointed out: “These increases in claims payments are nothing to do with the quality of clinical care, which remains high. They are a result of a hostile legal climate. Awards of this size, paid from NHS funds, are damaging for everyone who uses the NHS and cannot be sustained if we want the NHS to survive.”

The MDU acknowledged that “the government is listening”, and the Department of Health and Social Care has convened a working group to look at how to manage the cost of clinical negligence to the NHS following criticism from the National Audit Office and the House of Commons Public Accounts Committee.

But Dr Tomkins added: “What we now need, in the interest of all users of the NHS, is urgent legal reform.

“One of the topics on the table is repeal of S2(4) of the Law Reform (Personal Injuries) Act 1948, which still requires all clinical negligence defendants to fund compensation on the basis it will be used for private, not NHS care, even though there is no guarantee that is how the money will be spent. The MDU has been campaigning for this legal change and others, such as fixing claimants’ legal fees and reforming the personal injury discount rate.”

She concluded: “It would be a fitting birthday present for the NHS if balance could be restored to a system which is so out of kilter that it is putting the NHS under unbearable strain.”

*Annual report and accounts 2017/18. A report prepared by NHS Resolution, 12 July 2018.

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