Radical reform needed to stop soaring clinical negligence legal costs, says new report

A new report published by the Centre for Policy Studies has concluded that radical reform is needed to stem the growing cost of clinical negligence claims against the NHS.

The report’s author, Dr Paul Goldsmith, a consultant neurologist and policy strategist, has put forward nine recommendations to bring down costs for the NHS including: repealing Section 2(4) of the Law Reform (Personal Injuries) 1948 Act, paying a financial awards directly from the negligent party to the responsible body purchasing future care, and fixing loss of earnings at the national living wage or a low multiple of salary.

Urgent changes are needed, argues Goldsmith, who is also a non-executive director of the Medical Defence Union, as medical negligence claims are draining the NHS of much-needed funds and putting patients at risk by driving GPs out of practice.

He points out in the report that the NHS’ liabilities for medico-legal claims now total £65 billion, meaning that the UK’s medico-legal bill is £24 per person, more than twice that of the US, at £9 per person, despite the US’ reputation as a more litigious culture.

He has warned that medical negligence claims are draining the NHS of much-needed funds and putting patients at risk by driving GPs out of practice.

Goldsmith says that the cost of claims in the UK is also likely to increase substantially following the drop in the discount rate from 2.5% to –0.75%, announced in February of this year.

The rising costs are due to three main reasons, according to Goldsmith. The first is Section 2(4) of the Law Reform (Personal Injuries) Act 1948, which requires the body or individual paying compensation to disregard the availability of NHS care. This means the financial award reflects the assumption it will only be used for private health care. If the claimant uses NHS care they still retain the financial award, which, he says, is unreasonable.

“There was a logic to this back in 1948 as the NHS had only just been formed and more chronic disease management and rehabilitation was not well developed,” writes Goldsmith in his report.

“The medical injury cases which are inevitably foremost in people’s minds are the most severe ones and it was considered unsafe to rely on the newly formed NHS to provide an appropriately high level of care. Indeed, ironically, this element of the Act was introduced to overcome opposition from doctors to the 1946 National Health Service Act who had feared the loss of their private income.

“Nowadays, we have a level of care which is unrecognisable from 1948. Furthermore, the Act did not foresee that some recipients of financial awards would continue to use state-funded care, or find that their disability improved after the conclusion of the case.”

The second is the fact that financial awards take into account lost future salaries, meaning two individuals with identical deficits could receive dramatically different pay-outs.

And the third is that there is no reappraisal of compensation. So if a patient improves, or dies, future costs are not incurred, but the payout stays with the patient or their family.

Among his recommendations, Goldsmith also suggests that the system should work on a No Fault compensation basis, with NICE defining the appropriate, evidence-based level of care required and applying this to everyone. In addition, Goldsmith says that it should be made easier for patients and families to complain and make “non-complaint” observations, which might contribute to improvements without triggering a bureaucratic process.

Goldsmith predicts that if such reforms were put in place, then that the savings made by the NHS could be used to fund patient safety systems and improve how the NHS learns from clinical negligence investigations.

Responding to the report, Bill Braithwaite QC, a claimant barrister, said that it was “enormously ignorant and one-sided”.

He said that the £65 billion figure used by Goldsmith was a “ridiculous” projection over many future year and that he had used “scaremongering assumptions” to make his calculation. He also reminded Goldsmith that the foundation of every successful claim was negligence by doctors and medical staff.

“And that seems to be getting worse,” said Braithwaite.

On the point of relying on the NHS for lifelong care, the barrister from Exchange Chambers said that the concept was “madness” as the chasm in quality of life between those with, and those without, compensation is vast.

“The report goes on to say that loss of earnings claims should be limited – but that would attack the very basic principle of compensation, acknowledged by the Government, that the object is to put right the wrong that has been done,” he said.

Braithwaite also takes exception to the report’s claim that “the current system is expensive, unsustainable and can cause more harm than good”.

“I wonder where he has found the evidence that it causes harm?” he asks. “Is it so wrong that negligent – ie careless – doctors and clinical staff should be confronted with the damage they’ve done, and that their employers should be made to pay?”

Mark Dugdale