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Clinical negligence costs at tipping point - urgent reform needed

23 June 2017
  • NHS clinical negligence costs have increased by 72% over last 5 years
  • Costs could reach £2.6bn a year by 2022
  • Current yearly costs equate to the cost of training 6500 new doctors
  • New campaign sets out reforms needed to strike a balance between compensation that is reasonable but also affordable

If spend on clinical negligence by the NHS continues to increase at the same rate as it has over the last five years, it could be paying out £2.6bn a year by 2022 – a cost that risks becoming unsustainable for society without reform, according to a leading medical protection organisation.

In its report - The Rising Costs of Clinical Negligence: Who pays the Price? - the Medical Protection Society (MPS) said there should be reasonable compensation for those harmed due to clinical negligence, but that this must be balanced against society’s ability to pay. It warned that if the current trend in England continues, the balance will tip too far. MPS, a not for profit organisation supporting 300,000 healthcare professionals worldwide, is calling for a package of legal reforms that would control the spiralling costs and strike a balance between compensation that is reasonable, but also affordable. The report marks the launch of MPS’ Striking a Balance campaign.

The NHS spent £1.5bn on clinical negligence claims last year alone – which MPS says equates to the cost of training over 6,500 new doctors. It says spend increased by 72 percent over the five years to 2015/16 – an average 11.5 percent increase every year – and continuing on this trajectory for the next five years would see the yearly NHS bill increase from £1.5bn to £2.6bn. NHS Resolution has already estimated that £56.1bn will be needed for future clinical negligence costs - for claims arising from incidents that have already occurred.

The nine legal reforms* proposed by MPS include a limit on future care costs based on a tariff agreed by an expert group; the use of national average weekly earnings to calculate damages awarded for future loss of earnings; and fixed recoverable costs for claims up £250,000 to stop lawyers charging disproportionate legal fees. From the £1.5bn paid out in clinical negligence costs in 2015/16, legal costs accounted for 34 percent of that bill.

Emma Hallinan, Director of Claims at the Medical Protection Society, said: “It is important that there is reasonable compensation for patients harmed following clinical negligence, but a balance must be struck against society’s ability to pay.  If the current trend continues the balance will tip too far and the cost risks becoming unsustainable for the NHS and ultimately for society.

“This is without doubt a difficult debate to have, but difficult decisions are made about spending in healthcare every day and we have reached a point where the amount society pays for clinical negligence must be one of them.

 “We believe whole system legal reform is needed and this sits at the heart of our Striking a Balance campaign - we need a regime which achieves a balance between compensation that is reasonable, but also affordable. There is growing recognition from Government on the need for a more sustainable long-term solution. A YouGov survey also showed that 73 percent of the public support changes to the legal system that could reduce the cost of clinical negligence to the NHS.

“When considering the financial challenges facing the NHS and the change to the personal injury discount rate - which has increased the cost of compensation for clinical negligence, exacerbating an already challenging situation - there has never been a more pertinent time to tackle the root of the problem.

 “Of course controlling the cost of clinical negligence once a claim is made, is just one component of a more sustainable system. Our report also explores the causes of adverse incidents, acknowledges the need for continued improvements in patient safety, and looks at the complex drivers of claims – from changing patient expectations, through to greater awareness about how to bring a claim.”

END

Notes to editors:

For further information contact: E: kate.tullett@medicalprotection.org T: 0207 640 5290

View MPS’ The Rising Costs of Clinical Negligence: Who pays the Price report, and find out more about the campaign at https://www.medicalprotection.org/balance 

*Full list of MPS reform recommendations:

  • A limit on future care costs based on the realities of providing home based care – a tariff would be agreed by an expert working party. This would ensure claimants receive an award which provides them with the care they need, while avoiding the enormous differentials between costings proposed by care experts working for the claimant and the defendant.
  • The use of national average weekly earnings to calculate damages awarded, instead of a patient’s weekly earnings - to avoid higher earners receiving more from the NHS in compensation than lower earners, for a similar claim.
  • The introduction of an ultimate 10 year limit between the date of an adverse incident and when a claim can be made (with judicial discretion in certain cases) – to reduce the number of claims that are delayed and inflate due to loss of records, medical staff retiring/dying or having little recollection of the facts.
  • A minimum threshold for cash compensation relating to claims for minor injuries – to reduce the cumulative cost of damage pay-outs where only very minor injuries are sustained.
  • Changes to provisions meaning the patient would need to seek the courts approval to withdraw from a claim less than 28 days before a trial – to save on the considerable costs that are incurred when a claimant discontinues a case at the last minute at the expense of the defendant, the NHS for example.
  • A fixed recoverable costs scheme for clinical negligence claims up to a value of £250,000 - to stop lawyers charging disproportionate legal fees.
  • Changes to the rules relating to claimant expert reports covered by After the Event insurance such as a limit on the number of expert reports covered, or a cap on costs – so when the claimant is successful, and the defendant (the NHS for example) has to pay the cost of their insurance premium, they aren’t faced with a large bill for an unlimited amount with no transparency on what it covers.
  • Consideration of ways to reduce expert fees such as capping fees or the number of experts that can be instructed - to help save costs and ensure costs are in proportion to the damages.
  • An increase in the small claims track threshold for clinical negligence claims  up £5,000– so more low level, straightforward claims are routinely managed within the small claims track and the cost of these claims are reduced – this would be especially beneficial for dental claims.

References:

  • The NHS’ spend on clinical negligence claims last year (£1.5bn) equates to the cost of training over 6,500 new doctors. This is calculated based on cost of £230,000 to train a doctor according to https://fullfact.org/health/cost-training-doctor (£1.5billion/£230,000 = 6,521.7 doctors)
  • Current NHS clinical negligence costs references are from the NHS Resolution 2015/16 annual report: http://www.nhsla.com/AboutUs/Pages/AnnualReport.aspx
  • Public survey statistics referenced are from a YouGov survey of 2034 adults in Britain, undertaken on behalf of MPS in February 2017.
  • On 20 March 2017 the Lord Chancellor changed the personal injury discount rate from 2.5% to minus 0.75%. This significantly increased compensation awards on all claims settled where there are future costs such as care costs or loss of earnings. The impact of the decision is already being felt – soon after the rate change an NHS trust nearly tripled an injury pay out from £3.8mn to £9.3million as a result.

About MPS:

The Medical Protection Society (“MPS”) is the world’s leading protection organisation for doctors, dentists and healthcare professionals. We protect and support the professional interests of more than 300,000 members around the world. Membership provides access to expert advice and support together with the right to request indemnity for complaints or claims arising from professional practice.   

Our philosophy is to support safe practice in medicine and dentistry by helping to avert problems in the first place. We do this by promoting risk management through our workshops, E-learning, clinical risk assessments, publications, conferences, lectures and presentations. MPS is not an insurance company. All the benefits of membership of MPS are discretionary as set out in the Memorandum and Articles of Association.