The Commons public accounts committee turned up the heat on clinical negligence costs last month. Its report slammed the Department of Health and Social Care (DHSC) for failing to tackle rising costs despite ‘repeated warnings’; noting that the liability bill for clinical negligence reached £60bn in 2024/25.
The committee said the NHS has not done enough to tackle the underlying causes of harm to patients, with the service ‘drowning’ in safety recommendations that have yet to be actioned.
It also turned its fire on legal costs. These have risen sharply, with claimant legal fees increasing in real terms from £148m in 2006/07 (at 2024/25 prices) to £538m in 2024/25. The PAC said this level of legal costs – amounting to 19% of total settled claim costs – was ‘unacceptable’. It added that it was ‘extremely concerned’ that low-value clinical negligence claims with damages of £25,000 or less cost ‘far more’ in legal fees than victims receive in damages, with a cost-to-damages ratio of 3.7:1.
The PAC made several recommendations, including calling on the DHSC to clarify what it is doing about introducing fixed recoverable costs for lower-value clinical negligence cases. It also said the department should develop ‘alternative dispute mechanisms’ to speed up decisions and reduce costs for less complex cases. The committee cited international examples, such as the non-adversarial model used in New Zealand.
The New Zealand system is forever being held up as a better way of resolving clinical negligence claims. The taxpayer-funded scheme compensates for medical injury based on outcome, irrespective of fault or negligence. Lump-sum awards are capped at a level regarded as significantly lower than the sums successful claimants receive in England and Wales.
So is this system really an improvement? A practising doctor in New Zealand contacted me recently with some insights into the scheme. She pointed out that while it is technically a ‘no-fault’ scheme, in practice it is far from lawyer-free. Most claimants will not get very far without a lawyer. While lump-sum payments are capped, claimants who can no longer work may get an ongoing payment worth 20% of their wage. They will be seen privately for follow-up surgery and for rehabilitation, rather than languishing on New Zealand’s public hospital waiting lists. So from a government perspective, the scheme is not as cheap as it first appears, though it falls far short of putting the claimant back in the position they were in before the incident.
My medic also observed that their scheme does not compensate for pain and suffering. Exemplary or punitive damages are extremely rare, and can only be obtained through the tort system. This takes away an important threat to dissuade hospitals from withholding notes and other important evidence – something that apparently happens a lot. The doctor added that the New Zealand system ‘definitely does not speed things up, or add to safety. My observation as a working doctor is that things are no safer than they were 20 years ago’.
This does not sound to me like a system that the UK should be in any hurry to emulate.
The PAC also made much noise about the fact that – based on a law passed in 1948 – clinical negligence claimants can claim for the costs of private care, even though they might end up using the NHS instead. The committee said this runs the risk of the taxpayer ‘paying twice’ for clinical negligence – once through compensation for injury, then again by providing subsequent health and social care.
There are currently no clear figures to show how much this is happening, and what it costs. But NHS Resolution identified it as a major contributory factor to the increasing cost of very high-value cases worth £1m or more, where about 60% of the damages relate to future care.
On the face of it, it may sound reasonable to expect people to use any free healthcare available, and avoid claiming for private care. But let us not forget, this is a category of people found to have been harmed by the NHS. The law seeks to put them back into the position they were in before the negligence occurred, as far as possible. Expecting them to wait months or travel miles for physio or rehab, or wait years for corrective surgery, while they endure whatever pain and discomfort has been caused to them, is clearly wrong.
If we had a perfect health system – or even a satisfactory one – then taking away the costly option of using private healthcare would be a reasonable thing to do. But the NHS is very, very far from perfect. And that is why victims of its own negligence must not be forced into using it again.
Rachel Rothwell is editor of Gazette sister magazine Litigation Funding and a former Gazette news editor
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