Written evidence submitted by The Medical Defence Union (NFS0001)

 

About us

  1. The Medical Defence Union (MDU) is a medical defence organisation (MDO). We were established in 1885, making us the oldest such organisation in the world. We represent the interests of more than 200,000 healthcare professionals across the UK, including doctors, dentists, and pharmacists -amongst others. We are a mutual, not-for-profit organisation, and exist solely to serve the interests of our members.

Clinical negligence costs: context

  1. Lord Darzi of Denham’s Independent Investigation of the National Health Service in England (the Darzi Report) was published in September 2024, having been commissioned by the Secretary of State for Health and Social Care shortly after entering office following the General Election in July 2024. In the Report, Lord Darzi highlighted that the UK is an “outlier” in clinical negligence payments when compared to other, similar nations.[1] For comparison, he states that the NHS in England is devoting double the share of total health spending to this issue as New Zealand, ten times as much as Australia and twenty times as much as Canada.[2]

 

  1. In England, the NHS is spending a significant proportion of its total expenditure on clinical negligence payments. NHS Resolution’s Annual Report and Accounts for the 2023-24 fiscal year highlight that the cost of clinical negligence now stands at 1.7% of the NHS budget, or £2.9 billion per annum.[3] It also highlights that the total cost of outstanding NHS compensation claims in England is £58.5 billion.[4]

 

  1. For context, according to the Darzi Report, this is larger than the “combined budget of every GP practice for the whole of the Midlands serving more than 10 million people, and is the same as the NHS spending on 1.2 billion pathology tests each year.”[5]

 

  1. These numbers have notably increased in recent years. Dr Michael Devlin, the Head of Professional Standards & Liaison at the MDU, recently highlighted in the Journal of Personal Injury Litigation that the annual cost of clinical negligence claims to the NHS has more than quadrupled between 2006/2007 and 2023/2024, from £0.6 billion to nearly £2.8 billion.[6]

 

  1. The increase in clinical negligence costs has also been raised in Parliament. According to the Thirteenth Report of Session 2021-22 from the House of Commons Health and Social Care Committee (entitled “NHS litigation reform”), a decade previously the NHS was paying only £0.9 billion in damages per annum.[7] However, by the 2020-21 fiscal year, this amount had more than doubled to approximately £2.2 billion.[8] In the intervening time, this figure has risen further to £2.9 billion, with the Darzi Report stating that clinical negligence claims are at record levels.[9]

 

  1. The Health and Social Care Committee Report into this topic also stated that they anticipated the cost of clinical negligence claims to increase even further over the coming years, reaching approximately £4.3 billion by 2030 and £4.6 billion by 2031.[10]

 

  1. The MDU agrees with the principle that these costs are unsustainable. Dr Devlin summated the organisations stance in the article highlighted in Paragraph 4 when he stated that:

 

“As a society, we are paying dearly for a clinical negligence system which is fundamentally flawed, unfair and unsustainable. The reasons for this are complex but the soaring costs of clinical negligence claims have serious financial implications for the health service: those funding it, those working within it and those receiving care from it.”[11]

 

  1. The rise in claims and the levels of compensation awarded in recent years cannot be put down to poor standards of care. As Dr Devlin highlights in his Journal article:

 

“Data shows that clinical standards have not fallen during the period when claims have been rising and that when adverse incidents occur, it does not typically lead to litigation”.[12]

 

  1. This is in line with the written evidence submitted by the Department of Health and Social Care to the Health and Social Care Committee for their inquiry into clinical negligence, where they stated that:

 

“We do not believe any measurable decline in safety is driving the long-term rise in the cost of clinical negligence claims – we have found no evidence to suggest this while the NAO found this “unlikely”.[13]

 

  1. There are a number of reasons behind the steep rise in clinical negligence costs, but two of the main factors cited by the Health and Social Care Committee’s Report are:

 

    1. The amounts being awarded by courts[14]
    2. Increasing legal fees[15]

 

  1. The rest of this submission will primarily examine these two factors, along with specific policies that could be implemented to address these going forward. It will also examine an additional factor, namely the impact of the current clinical negligence regime on healthcare workers and the wider impact that this can have on healthcare across the UK.

 

Financial settlements

 

  1. The objective that underpins the principle of clinical negligence compensation is that said compensation should, as far as is reasonably possible, restore the claimant to the same position as they would have been in had they not suffered harm. There is, however, an alarming absence of evidence on how awards are spent and the actual investment returns claimants receive from their compensation awards. Currently, government does not know what happens in practice with those investments. Research is urgently needed into how compensation awards are utilised, how are they invested, and what returns are achieved. Especially where that pertains to taxpayer funded services such as the NHS, which as well as being a compensator is also a provider of the subsequent care as a free-at-the-point-of-use service.

 

  1. The Department of Health and Social Care, in their Written Evidence submission to the Health and Social Care Committee’s Report, stated that “a proportion of the rise [in the cost of clinical negligence claims] may be due to precedent setting in the Courts”.[16]

 

  1. Part of the reasoning underpinning the precedent being set by the courts derives from legislation governing compensation. At present, the courts are required to disregard the existence of the NHS when determining the level of compensation awarded, and instead determine and award on the basis of the cost private healthcare. This is laid out in section 2(4) of the Law Reform (Personal Injuries) Act 1948.

 

  1. It must never be forgotten that every pound being paid out by the NHS in clinical negligence compensation awards is a pound that cannot be spent on improving patient care and patient safety across the board. Indeed, even when the NHS is not the compensator, courts should be able to consider the existence of the NHS when determining compensation awards and make directions accordingly.

 

  1. A scenario where the NHS is providing treatment that it has already paid for on the basis that it is being delivered privately, is unacceptable. The NHS is in effect paying twice.

 

  1. Section 2(4) of the Law Reform (Personal Injuries) Act 1948 is also a historic anomaly within legislation that has yet to be addressed by any parliament despite being in force for over 70 years. It is based on a recommendation made in 1946, two years before the establishment of the National Health Service, and therefore could not take into account the existence of a health service that would be free at the point of use.[17] The committee that made the recommendation even stated at the time that the position “might need to be radically altered if a comprehensive health service is introduced.”[18]

 

  1. Repeal of this legislative provision would allow for the courts, when determining the level of compensation to be awarded to patients, to consider the provisions provided via the NHS. This money could then be reallocated elsewhere within the NHS – and should be done with an emphasis on frontline patient care.

 

  1. In addition, it has been highlighted that Courts are also considering additional factors when deciding the level of compensation to be awarded, including factors that are inherently unfair. One of the most striking examples of this is the assessment of likely future earning potential of child claimants, which is done on parental earning. For example, in 2015/16 the MDU settled two cases involving patients with severe physical and cognitive injuries. In these cases, loss of earning were based on likely academic achievement and above average earnings. By contrast, in 2021 the loss of earnings for a claimant with a cognitive brain injury was an assumed annual salary of £18,500, based on their family background.[19]

 

Increasing legal costs

  1. The Health and Social Care Committee’s Report into the cost of clinical negligence compensation highlighted that associated legal fees have grown in recent years.[20] Amongst other statistics highlighted in their report are that claimant legal costs have risen from £98 million to £496 million in the ten years from 2006-7 to 2016-17.[21] Additionally, the Government’s written evidence to the Committee for this Report stated that legal fees now exceed claimant awards in 74% of clinical negligence claims in which the amount agreed was below £50,000.[22] Furthermore, they state that the average legal cost with lower value claims had doubled between 2006/7 and 2020/21, with the figure rising from £10,121 to £22,124.[23]

 

  1. It is not unusual to see exceptionally high legal costs in comparison to the level of compensation awarded. Last year, the MDU settled several claims where this was the case. In one such case, the claimant received £1,000 while legal costs were £30,000. In another case, the claimant received £23,000 whilst their legal costs were £140,000.

 

  1. The impact of this is notable. The Centre for Socio-Legal Studies, in their submission to the Committee, found that “between a quarter and a third” of clinical negligence costs went to fund lawyers, rather than to the claimant.[24] They further outlined that in 2018/19, a total of over £650 million of clinical negligence went to the legal community, “with the total paid in compensation being in the region of £2 billion.”[25]

 

  1. One immediate step to address this issue would be the introduction of fixed recoverable costs (FRC) in clinical negligence claims up to a set amount of compensation being awarded. Such a scheme would set the amount of legal costs that can be claimed back from the losing party by the winning party in litigation. The MDU is very supportive of the implementation of such a scheme for lower value clinical negligence claims. Indeed, we have been leading calls for many years. Following its consultation in 2022, the government should now move swiftly to introduce a system of FRC in clinical negligence claims up to £25,000, with a view to then increasing it £250,000 in the near future, allowing it to achieve tangible cost savings which can be reinvested into frontline healthcare services.

 

  1. A FRC system is already in place for most injury claims. In evidence to the Health and Social Care Select Committee, the then Parliamentary Under-Secretary of State for Patient Safety and Primary Care, Maria Caulfield, outlined that “In most injury claims and personal legal claims it [FRC] is in place already”.[26] The same evidence session also saw confirmation that the Government believed that the implementation of such a scheme would result in a saving of approximately £454 million over a ten-year period.[27]

Impact of the current clinical negligence regime on healthcare staff

  1. The MDU recognises that the immediate thought must, of course, be with those harmed.

 

  1. Nevertheless, the MDU is acutely aware that the current regime for clinical negligence claims is having a profound impact on healthcare staff, including those within the NHS.

 

The morale of NHS has been hit heavily in recent years by the impact of the Covid-19 pandemic and other workplace pressures. Last year, a survey conducted by the MDU of 843 healthcare professionals found four in 10 were likely to retire or leave practice in the next five years due to workplace pressures. Additionally, nearly half (48%) of respondents had reduced their hours to cope.

 

  1. The MDU has also seen the effect first-hand of the adversarial and distressing nature of the clinical negligence system on healthcare workers. One of our members, a GP who was had their case against them dismissed by a judge at trial, has stated that:

“The claims process went on for more than four years and it was such a relief when it finally concluded. The whole process from the start of the claim until trial was such a time consuming, intense and stressful experience. I don’t think many colleagues, patients or others, realise how much is involved. It is upsetting that somebody makes a claim accusing you of having been negligent in your care for your patient. As a caring professional, it affects you deeply.”[28]

 

  1. Should the above example be reflective of the toll that the current regime has on healthcare workers, particularly in light of the low morale that they likely suffer from following the pandemic, it is possible that this system may also be leading to healthcare professionals choosing to reduce their hours of leave practice early.

Conclusions

  1. The MDU has been repeatedly raising the alarm that cost of clinical negligence has long since been sustainable. Numerous organisations, including the government, have endorsed this view - stating that the current system of clinical negligence costs in the UK are “rising at an unsustainable rate.”[29] It is clear that there is a large amount of agreement that the system needs to be reformed to address this. In this written evidence submission to the Committee the MDU has outlined two potential areas where reform can be implemented, and which, both individually and combined, would result in a reduction in the total clinical negligence cost.

 

  1. These are but two of a package of reforms that could have a real and meaningful impact on the cost of clinical negligence to the NHS. Now is the time for the government to come forward with a package of reforms to address the system as whole. We know these reforms have long been analysed by the Department of Health and Social Care. We urge the government to bring them forward for consultation.

 

Response on behalf of the MDU provided by Thomas Reynolds, Head of Policy & Strategic Communications, Medical Defence Union.


References

Darzi, Ara. “Independent Investigation of the National Health Service in England.” Department of Health & Social Care, September 2024. Accessed November 4, 2024. https://assets.publishing.service.gov.uk/media/66f42ae630536cb92748271f/Lord-Darzi-Independent-Investigation-of-the-National-Health-Service-in-England-Updated-25-September.pdf.

 

Department of Health and Social Care. “Written evidence submitted by the Department of Health and Social Care (NLR0070).” Accessed November 4, 2024. https://committees.parliament.uk/writtenevidence/40836/html/.

 

Devlin, Michael. “Clinical negligence claims - the compelling case for systematic reform.” Journal of Personal Injury Litigation 3 (2024): 215–22.

 

Health and Social Care Committee. “NHS litigation reform.” House of Commons, April 20, 2022. Accessed November 4, 2024. https://committees.parliament.uk/publications/22039/documents/163739/default/.

 

“Health and Social Care Committee: Oral evidence: NHS litigation reform, HC 740.” House of Commons, February 1, 2022. Accessed November 4, 2024. https://committees.parliament.uk/oralevidence/3371/html/.

 

NHS Resolution. “Annual report and accounts 2023/24.” House of Commons, July 23, 2024. Accessed November 4, 2024. https://resolution.nhs.uk/wp-content/uploads/2024/07/NHS-Resolution-Annual-report-and-accounts_23-24_Access.pdf.

 

The Centre for Socio-Legal Studies. “Written evidence submitted by The Centre for Socio-Legal Studies (NLR0063).” Accessed November 4, 2024. https://committees.parliament.uk/writtenevidence/40236/html/.

November 2024

 

 

 


[1] Darzi, Ara. “Independent Investigation of the National Health Service in England” (Department of Health & Social Care, September 2024), accessed November 4, 2024, https://assets.publishing.service.gov.uk/media/66f42ae630536cb92748271f/Lord-Darzi-Independent-Investigation-of-the-National-Health-Service-in-England-Updated-25-September.pdf.

[2] Ibid.

[3] NHS Resolution, “Annual report and accounts 2023/24” (House of Commons, July 23, 2024), accessed November 4, 2024, https://resolution.nhs.uk/wp-content/uploads/2024/07/NHS-Resolution-Annual-report-and-accounts_23-24_Access.pdf.

[4] Ibid.

[5] Darzi, “Independent Investigation of the National Health Service in England.”

[6] Michael Devlin, “Clinical negligence claims - the compelling case for systematic reform,” Journal of Personal Injury Litigation 3 (2024): 215–22.

[7] Health and Social Care Committee, “NHS litigation reform” (House of Commons, April 20, 2022), accessed November 4, 2024, https://committees.parliament.uk/publications/22039/documents/163739/default/.

[8] Ibid.

[9] Darzi, “Independent Investigation of the National Health Service in England.”

[10] Health and Social Care Committee, “NHS Litigation Reform.”

[11] Devlin, “Clinical Negligence Claims - the Compelling Case for Systematic Reform.”

[12] Ibid.

[13] Department of Health and Social Care, “Written evidence submitted by the Department of Health and Social Care (NLR0070),” accessed November 4, 2024, https://committees.parliament.uk/writtenevidence/40836/html/.

[14] Ibid.

[15] Ibid.

[16] Ibid

[17] Devlin, “Clinical Negligence Claims - the Compelling Case for Systematic Reform.”

[18] Ibid.

[19] Ibid

[20] Health and Social Care Committee, “NHS Litigation Reform.”

[21] Ibid.

[22] Department of Health and Social Care, “Written Evidence Submitted by the Department of Health and Social Care (NLR0070).”

[23] Ibid.

[24] The Centre for Socio-Legal Studies, “Written evidence submitted by The Centre for Socio-Legal Studies (NLR0063),” accessed November 4, 2024, https://committees.parliament.uk/writtenevidence/40236/html/.

[25] Ibid.

[26] “Health and Social Care Committee: Oral evidence: NHS litigation reform, HC 740” (House of Commons, February 1, 2022), accessed November 4, 2024, https://committees.parliament.uk/oralevidence/3371/html/.

[27] Ibid.

[28] Devlin, “Clinical Negligence Claims - the Compelling Case for Systematic Reform.”

[29] Department of Health and Social Care, “Written Evidence Submitted by the Department of Health and Social Care (NLR0070).”