Illuminating analysis in NAO report

The National Audit Office (NAO) study published today, Managing the costs of clinical negligence in trusts, puts forward a clear evidence-based analysis of the challenge facing the NHS and the public purse in dealing with clinical negligence claims.

Certainly, there is much to take stock of, with the cost of claims quadrupling over the last ten years to stand at £1.6bn in 2016 – and predicted to double from that to £3.2bn by 2020-21.

But the report was very clear that this proliferation of claims is not because standards of patient care have been declining.  Rather, the problem is largely due to factors outside the control of Trusts or NHS Resolution.  A significant factor has been the broadening of access to justice and legal service reforms.

As a result, claimant damages and costs have spiralled dramatically – although the proportion of claims where damages are paid remains relatively stable.  Costs as well as numbers of claims have increased.  Over ten years, high value claims damages awards have increased whilst in lower value claims the legal costs exceed the damages awarded in 61% of successful claims and have increased by 533% overall.

On the other side of the equation, legal defence costs have broadly only risen in line with inflation and NHS Resolution’s own costs in dealing with claims has fallen significantly, from £721 per claim in 2006-07 to £414 in 2016-17.

The NAO study shows that NHS Resolution is controlling its own costs effectively and achieves savings for the public purse by contesting unmeritorious or excessive claims.  It has saved an estimated £144m by challenging claimant costs and successfully defended claims where an estimated £1.2bn had been sought in damages.  This excludes reductions in damages claimed in cases where liability has been conceded.

As a law firm that works for NHS Resolution defending it from claims, we are studying the NAO’s report very carefully.  We also welcome the announcement today of new legislation aimed at changing the way in which the personal injury discount rate is set.

What is clear is that there will be no quick solution to stop the rising numbers and costs of claims.  The report notes that limited research has been done to date on the reasons people make claims, as it remains a small proportion of those who have an adverse outcome and this is an area for investigation.  Some policy decisions may need to be taken to ease the problem with a cross-government approach being advocated which balances access to justice and access to health services. 

In the meantime, it will remain a case of defending claims effectively and we will continue to work with NHS Resolution and NHS Trusts to support initiatives aimed at ensuring fair outcomes for all parties.