Clinical negligence litigation fell to its lowest level ever in 2017/18 as NHS Resolution mediated more claims in 12 months than in its entire previous history. But both the agency and the medical defence lobby are calling for urgent reform, after the change to the personal injury discount rate saw damages payouts soar 50% to £1.63bn.

The figures are published in NHS Resolution’s annual report and accounts. The number of new clin neg claims plateaud in 2017/18 at 10,673 (10,686), while claimant legal costs fell for the first time in years (by 6.4% to £467m). Defence legal costs rose 2.5% to £128m.

The change in the discount rate from 2.5% to -0.75% in March 2017 accounted for £404m of the £549m rise in damages payouts to patients. The Civil Liability Bill currently going through parliament will introduce a new method for working out the rate, with regular reviews by the lord chancellor.

Helen Vernon, NHS Resolution chief executive, welcomed growing engagement in mediation by those who act for injured patients, adding that the agency hopes to build on this so mediation is longer seen as novel in healthcare. But she cautioned that the cost of clinical negligence remains at an all-time high: 'Total provisions for all our indemnity schemes continue to rise, from £65bn to £77bn, which brings a renewed urgency to efforts across government to tackle the drivers of that cost.’ 

Dr Christine Tomkins, chief executive of the Medical Defence Union (MDU) noted that the £77bn figure represents a trebling in NHS Resolution’s balance sheet provisions in three years. She blamed the rise in claims payouts on a 'hostile legal climate’, warning that individual awards that can now amount to over £20m are unsustainable. 

Tomkins added:  'The government is listening. Following criticism from both the National Audit Office and the House of Commons Public Accounts Committee, the Department of Health and Social Care convened a working group to look at how to manage the cost of clinical negligence to the NHS. But what we now need, in the interest of all users of the NHS, is urgent legal reform.

'One of the topics on the table is repeal of S2(4) of the Law Reform (Personal Injuries) Act 1948, which still requires all clinical negligence defendants to fund compensation on the basis it will be used for private, not NHS care, even though there is no guarantee that is how the money will be spent. The MDU has been campaigning for this legal change and others such as fixing claimant’s legal fees and reforming the personal injury discount rate.’