Cost of clinical negligence claims rises sharply

An analysis of clinical negligence claims costs made against doctors has shown an exceptionally sharp rise in the size of claims in England and Wales.  The Medical Protection Society (MPS) – which handles medical negligence claims brought against GPs and private doctors – said the total value of reported claims which have not yet been settled leapt by 40% in 2009.  

The impact was the greatest amongst the largest claims – typically these are claims involving serious neurological injury combined with long life expectancy. The value of the top 20 outstanding claims against doctors was 60% higher in 2009 than in 2008, while the total value of the top four claims made against doctors on MPS’s books in 2009 was twice as much as the combined value of the top four claims outstanding in 2008.   Contributing to the rise in the largest claims was a significant increase in the cost of lifetime care in cases of serious injury.

The largest compensation payout made by MPS in 2009 was £7.6 million (excluding all legal costs).

Another major driver of the rise in the cost of clinical negligence claims is escalating claimant legal costs which continue to increase year on year. In lower value claims – where damages are agreed at less than £10,000 – MPS typically pays nearly twice as much in claimant costs as in damages. This worrying trend distinguishes the UK from all other countries in which MPS operates. For example, in 2009 MPS settled a claim against a GP for £1,750 in compensation to the patient but the claimant’s legal costs were 12 times higher at £20,500. In another claim against a GP, the patient’s compensation was £7,650 yet their legal costs were £65,000 – nearly 8.5 times what the patient received.

MPS’s recent claims experience reflects that of the NHS Litigation Authority (NHSLA) – which handles claims against NHS hospitals in England. That organisation recently reported a 34% increase in compensation payments and indicates that the upward trend has continued into 2009/10.

Chief Executive of MPS, Tony Mason, said: “MPS has long held concerns about the cost of clinical negligence claims. Whilst the number of new claims brought against doctors increased modestly in 2009, the value of current claims increased by far in excess of inflation during the same period. It is too early to tell whether the exceptional increase in the cost of clinical negligence claims seen in 2009 is indicative of a longer term upward trend but it is certainly worrying. We have seen increasingly higher awards for the cost of lifetime care for those claimants with the most serious injuries which is one reason for the rise in compensation payments.”

“The rise in claimant legal costs continues unabated. It is not unusual for claimant legal costs to grossly exceed compensation payouts. In some lower value cases we have seen claimant legal costs in excess of ten times the value of the compensation award. We believe something must be done to stem the tide of unsustainable legal costs and would like to see the reforms recommended by Lord Justice Jackson taken forward.”