The NHS Litigation Authority is experimenting with handling cases in-house as it seeks to make further savings in its budget.
The organisation spent £120.1m on external legal costs in 2015/16 and is understood to be keen on reducing that figure.
The new in-house litigation team was established earlier this year and is running as a 12-month pilot to enable analysis of the costs savings and effectiveness of the service.
A spokesman for the authority said: ‘The litigation team has been established to enable some of the NHS Litigation Authority’s legally qualified staff to act in cases where court proceedings are served. Currently, these cases need to be outsourced to our legal panel.’
It is understood there are no immediate plans to reduce the 11-strong panel of law firms that are contracted to work on behalf of the NHSLA.
Defence costs were just 8% of the total NHSLA claims outlay in 2015/16 but have increased by 17% compared with the previous year, when they were £103.2m.
Attempts to reduce defence costs come at a time when claimants wait to see what the government plans to do about fixed recoverable fees, with a consultation expected later this year.
Defendant firms are believed to have reduced their costs significantly in recent years and already work to fixed costs.
But the NHSLA reported earlier this year clinical negligence claims had fallen by almost 5% in a year, leading some within the organisation to ask whether work can be done more cost-effectively in-house.
The authority received 10,965 new clinical negligence claims last year, compared with 11,497 in 2014/15.