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A coalition of organisations which represent the NHS and health professionals is calling for urgent action to reduce the £1.7 billion paid last year alone on clinical negligence in England. The value of claims in the pipeline is estimated to be a staggering £65 billion.

Today, (24 April) the House of Lords will debate proposals to change the way compensation is calculated, as part of the Civil Liability Bill. The NHS Confederation, which represents organisations across the healthcare system, has coordinated a statement ahead of the debate, calling on parliamentarians to support the Bill.

As well as the Confederation, the statement has been signed by the Academy of Medical Royal Colleges, British Medical Association, Family Doctor Association, Medical Protection Society, Medical Defence Union and Medical and Dental Defence Union of Scotland.

Statement: Healthcare organisations support for reforming how the discount rate is set.

As organisations which represent the National Health Service and the health professionals who provide care and treatment to patients in England and Wales, we urge MPs and Peers to support the clauses within the Civil Liability Bill that reform how the discount rate is set. 

The rising cost of clinical negligence is unsustainable and means vast amounts of resource which could be used more effectively have to be diverted elsewhere. Last year the NHS in England spent £1.7bn on clinical negligence claims. That represents 1.5% of spending on front line health services. This annual cost has almost doubled since 2010/11, with an average 11.5% increase every year. The estimated total liabilities of the scheme in England were £65bn for the financial year 2016/7 and this is expected to rise again this year. This staggering sum is to pay for clinical negligence costs both this year and in future, which relate to claims arising from incidents that have already happened.

The financial impact on the NHS was greatly exacerbated by the change to the discount rate from plus 2.5% to minus 0.75% made in March 2017 by the then Lord Chancellor. This has had a significant impact on compensation payments in personal injury cases where there is an element of future care costs and earnings. In his Budget speech on 8 March 2017, the Chancellor said the Government had set aside £5.9 billion, just for the three years up to 2020, to ‘protect the NHS from the effects of the changed personal injury discount rate.’ 

We fully accept there must be reasonable compensation for patients harmed through clinical negligence, but this needs to be balanced against society’s ability to pay. This is money that could be spent on frontline care. Given the wider pressures on the healthcare system, the rising cost of clinical negligence is already having an impact on what the NHS can provide. 

The reforms to how the discount rate is set included within this Bill would help to ensure the rate more accurately reflects the way in which most claimants choose to invest their compensation payments. It would help to create a fairer system for all concerned. 

Reforming the discount rate in this way is an important step. It would however only moderate the impact of the recent change to the discount rate and it would not address the ongoing trend in the rising cost of clinical negligence. A wider programme of reforms is needed and we urge the Government to be bold in introducing a strategic approach that would control legal costs, ensure fair compensation payments are based more closely on the needs of claimants as well as help to reduce incidents of harm from happening in the first place.

Signed by Niall Dickson, Chief Executive NHS Confederation, Simon Kayll, Chief Executive Medical Protection Society, Dr Peter Swinyard, National Chairman Family Doctor Association, Dr Christine Tomkins, Chief Executive Medical Defence Union, Chris Kenny, Chief Executive and Secretary Medical and Dental Defence Union of Scotland, Professor Carrie MacEwen, Chair Academy of Medical Royal Colleges, and Dr Chaand Nagpaul, Chair British Medical Association.

Niall Dickson, chief executive of the NHS Confederation, said:

“The rising cost of clinical negligence is unsustainable and means vast resources that could be used by the NHS are being diverted elsewhere.

“We fully accept there must be reasonable compensation for patients harmed through clinical negligence, but this needs to be balanced against society’s ability to pay. Money used for this purpose cannot be spent on frontline care.

“The time for action is now. That is why the NHS Confederation has joined forces with a range of interested organisations to urge MPs and peers to act.

“While we welcome changes to the way the discount rate is set, a wider programme of reforms is needed and we urge the Government to be bold in introducing a strategic approach to control legal costs, ensure fair compensation payments are based more closely on the needs of claimants and to reduce incidents of harm from happening in the first place.”