The Department of Health and Social Care has promised to set out early proposals to rein in the spiralling cost of National Health Service clinical negligence cases by the end of this year.
A recent National Audit Office report on the topic found that settling clinical negligence claims rose from £1.1bn in 2006-7 to £3.6bn in 2024-25 because of increased claim numbers and the rising costs of individual settlements. The watchdog said clinical liability is now the government’s second-largest liability, eclipsed only by the cost of nuclear decommissioning.
A follow-up inquiry by parliament’s Public Accounts Committee resulted in a series of recommendations being made to DHSC.
In its Treasury Minutes response to the committee, DHSC said the cost of clinical negligence and the experience of patients navigating the system were “of great concern” to government.
It gave a slightly lower cost estimate than the NAO – a five-fold increase from approximately £600m in 2006-7 to £3.1bn 2024-25 – but said ministers are committed to addressing the issue and to improving the experience of NHS patients who have been injured by negligent NHS care.
“The government does not accept that ever increasing levels of compensation is in the wider public interest and agrees that this issue should be tackled,” the department said.
“The government will write to the committee by this autumn to set out the case for change, and its workplan including to describe key milestones, and the likely areas of focus for reform. There is no one ‘quick fix’ but instead a series of complex issues which together bring an upward cost pressure on clinical negligence budgets. The department is urgently examining how to best act swiftly to address some of the problems.”
In July, the department appointed David Lock KC to advise it on how to counter rising legal costs and improve the claims process for patients.
In its Treasury Minutes response, DHSC said part of its work with Lock is considering “alternative dispute resolution mechanisms and ways to reduce costs for less complex cases and speed up resolution”.
DHSC said disproportionate legal costs for low-value claims was a key concern in this area of work. It said that for the lowest-value claims, payments to lawyers for processing claims could be more than 10 times the compensation for the patient. For claims with a damages value under £50,000, a total of £184m is spent on lawyers’ fees each year and only £70m goes to patients as compensation.
The department said it is “taking account of international examples to see what lessons can be learned about resolving claims outside litigation”. However it noted that other countries’ healthcare and legal systems are not directly analogous to the NHS in England and the English legal system.
Part of Lock’s work includes looking at the use of fixed recoverable costs – pre-determined levels of fees that a winning party can recover from a losing party in civil litigation.
DHSC also confirmed that Lock is looking at the phenomenon of “double recovery”, where a compensation package includes the cost of private medical treatment but the claimant gets that treatment from the NHS. The result is that the state effectively pays twice for the treatment.
The department said “double recovery” was a “significant concern”, although the current system required judges to disregard the availability of NHS services when assessing damages.
It said the select committee’s request for proper estimates of the impact of assuming health and social care for clinical negligence victims will be provided exclusively by the private sector would be hard to deliver in line with MPs’ original six-month timeframe.
“DHSC has sought to identify potential data sources in order to make an informed calculation and continues to do so,” it said. “However, data in this area is limited, partly because there is no legal obligation for a claimant to notify the relevant service providers of their past compensation payments. DHSC is, therefore, unable to commit to the timeframe specified in this recommendation to provide estimates of the scale of double recovery.”
PAC members had requested the department publish Lock’s review into clinical negligence in full within six months of it being completed. But DHSC rejected the recommendation and said it had no plans to publish a separate report on Lock’s work.
“The department’s view is that ongoing expert advice to support its policymaking remains the right approach to achieving the best possible policy outcomes,” it said.
The department also rejected a recommendation that it should estimate and track the costs to the NHS of treating avoidable harm.
“The department does not believe a system to track the costs to the NHS of treating avoidable harm would be financially or logistically feasible,” it said. “Calculating costs of treating ‘avoidable’ harm would be very complex. There is no single, cost-effective mechanism for identifying ‘avoidable’ harm in healthcare.”