NHS Resolution: number of clinical negligence claims falls again, but legal costs and damages continue to rise

Clinical negligence claims made against the NHS have fallen in number for the third year in a row but legal costs and damages paid out by NHS Resolution have risen once more.

In its annual report, NHS Resolution said that the number of claims it received during its 2016/2017 financial year dropped by 2.5% to 10,686. It received 10.965 claims the previous year. The report also revealed that NHS Resolution closed 17,202 clinical and nonclinical claims brought against the NHS in England compared to 16,459 in 2015/16.

As in previous years, the greatest number of claims received across all clinical negligence schemes related to orthopaedic surgery, while the greatest value of claims related to obstetrics.

There was a 14% rise in damages paid out to claimants, which cost the body £1.1billion. Legal costs for claimant and defendant lawyers also rose by 19% and 5% respectively. £498 million was spent on claimant lawyer fees and £126 million went to defendant lawyers.

The body, formerly known as the NHS Litigation Authority, said that the rise in costs was partly due to nature of its risk pools, which mean that payments reflect claims that were notified in previous years.

Claims volumes reached a peak in 2013/14 and have steadily reduced since then. In its report NHS Resolution said that there was a surge in claims prior to a change in funding arrangements following the Legal Aid Sentencing and Punishment of Offenders Act 2012, which attributed to the decrease.

NHS Resolution said that it had developed a five-year strategy to play its part in addressing the escalating cost of claims.

“We are taking forward work to improve the resolution of claims, striking the balance of avoiding unnecessary court costs whilst continuing to defend claims where there was no negligence and challenging inappropriate legal costs where we encounter them,” it said.

“Our strategy also sets out the action we will take to use what we know about the causes of incidents to prevent the same thing happening again.

The report highlighted maternity claims, which it said had a devastating effect on families and represented one of the highest costs for NHS Resolution.

“Despite obstetric claims representing only 10% of clinical claims by number in 2016/17, they accounted for 50% of the total value of new claims reported,” said the report.

“In order to help organisations handling these tragic cases and the families involved, we developed our early notification scheme which launched on 1 April 2017. The scheme’s objective is to improve the handling of these incidents and identify and share learning.”

Writing in the report, Helen Vernon, the chief executive NHS Resolution, also pointed out that the organisation had received encouraging signs over its new mediation service.

“Getting the lawyers on both sides engaged in mediation has been challenging but the panel has already been active in building interest,” she wrote.

On the impact of the new Discount Rate, NHS Resolution said that the lower rate could encourage claimants to opt for lump sum awards rather than periodical payment orders.

As the Government had announced additional funding of around £1.2 billion a year for the Discount Rate change in the Spring Budget, NHS Resolution explained that it would not be collecting further funds from members of our indemnity schemes. Instead, it will be dependent upon securing direct funding from the Department of Health to meet any further impact on its finances.

The number of non-clinical claims, typically employers’ and public liability claims, also fell from 4,172 to 4,082, a decrease of 2%. Damages increased by 15% from £27 million to £31 million, but total payments decreased by £1.9 million (3%), from £59.4 million to £57.5 million due to a steep fall in legal costs: 21% for claimant legal costs and 8% for defence costs.

The report attributed this to the continuing impact of fixed recoverable costs in this area and efficiencies in the claims process.

Mark Dugdale