Health bodies urge MoJ to change NHS compensation rules

2 Feb 18

Clinical negligence claims are on the increase and the cost of settling future claims is expected to cost £65bn, NHS bodies have warned the Ministry of Justice.

With £1.7bn paid out for medical negligence in 2017 alone, NHS providers and commissioners are calling for a reform in the way compensation claims are calculated to make the system more sustainable.

A National Audit Office report, published last year, revealed that from 2006–07 to 2016–17, the number of clinical negligence claims lodged with NHS Resolution doubled from 5,300 to 10,600. This has quadrupled annual cash spending.

The NHS Confederation, which represents 85% of NHS providers and commissioners, has written to justice secretary David Gauke urging him to replace the current method of calculating compensation payments, which has had a “disastrous effect”.  

Rising costs of medical negligence are due to a discount rate change of 2.5% to minus 0.75% made by the previous justice secretary in March 2017.

In personal injury claims, where there is an expectation of future care costs and earnings, this discount rate change has had a significant financial impact.

NHS Confederation chief executive Niall Dickson said: “The rising cost of clinical negligence is unsustainable and means that cash resources that could be used by the NHS are being diverted elsewhere.

“As a start we desperately need the government to implement reforms to how compensation payments are calculated.”

In his spring budget, chancellor Philip Hammond agreed to set aside £5.9bn to cover medical negligence claims until 2020 to “protect the NHS from the effects of the changed personal injury discount rate”.

In response to the letter, an MoJ spokesperson said: “All personal injury victims should of course be fully compensated, but the costs involved should also be proportionate. 

“To help ensure this happens, we have set out proposals for a fairer way of setting the personal injury discount rate, as well as asking the Civil Justice Council to look at measures to control costs in clinical negligence cases.”

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