The content of this website is intended for healthcare professionals only

MPs and peers must act to curb negligence claims

Fair compensation for negligence must be balanced against society’s ability to pay

Louise Prime

Friday, 20 April 2018

NHS leaders are urging MPs and peers to take urgent action to reduce the tens of billions of pounds being paid out for clinical negligence claims. They insist that fair compensation for patients harmed through clinical negligence must be balanced against society’s ability to pay, as the current ‘staggering sum’ of payments reduces the amount of money available for frontline care.

Next Tuesday, proposals to change the way in which clinical negligence compensation is calculated will be debated in the House of Lords, as part of the Civil Liability Bill. The NHS Confederation – together with the Academy of Medical Royal Colleges, British Medical Association, Family Doctor Association, Medical Protection Society, Medical Defence Union and Medical and Dental Defence Union of Scotland – this morning published their statement urging MPs and peers to support the Bill. They want reform of the way that the discount rate is set.

The MDU has previously explained the ‘profound impact’ on the size of clinical negligence settlements of the recent change to the discount rate – the interest rate used by courts to calculate lump sum compensation payments to victims of clinical negligence incidents and other personal injury claims. The Lord Chancellor announced a change in the discount rate from 2.5%, which had been the level since 2001, to -0.75% with the change coming into effect from 20 March 2017. The MDU calculated that, for example, a claim that would have settled for £8.4m on the previous discount rate would now settle for £17.5m. The MDU said this could have a serious impact on general practice; although the Lord Chancellor committed to ensuring that appropriate funding is available to meet additional costs to GPs.

The healthcare organisations’ statement pointed out that the rising cost of clinical negligence is unsustainable and results in vast amounts of resource that could be used more effectively, having to be diverted elsewhere – the £1.7bn spent by the NHS in England last year on clinical negligence claims represented 1.5% of spending on front line health services. They added that the annual cost has almost doubled since 2010/11.

They said: “The estimated total liabilities of the scheme in England were £65bn for the financial year 2016/7 and this is expected to rise again this year. This staggering sum is to pay for clinical negligence costs both this year and in future, which relate to claims arising from incidents that have already happened.”

The signatory bodies argue that reforms to how the discount rate is set included within this Bill would help to ensure that the rate more accurately reflects the way in which most claimants choose to invest their compensation payments, and that they would help to create a fairer system for all concerned.

But they said that although discount reform is an important step, it would not address the ongoing trend in rising costs of clinical reliance, and so they also called for a wider programme of reforms to ensure that fair compensation payments are based more closely on the needs of claimants – and to help to reduce incidents of harm from happening in the first place.

NHS Confederation chief executive Niall Dickson said: “We fully accept there must be reasonable compensation for patients harmed through clinical negligence, but this needs to be balanced against society’s ability to pay. This is money that could be spent on frontline care. The time for action is now.”

Registered in England and Wales. Reg No. 2530185. c/o Wilmington plc, 5th Floor, 10 Whitechapel High Street, London E1 8QS. Reg No. 30158470