MPs urge radical reforms to negligence compensation system that costs NHS billions each year

The Government should remove the need to prove clinical negligence from NHS compensation claims when things go wrong in a radical overhaul of a system which last year paid out £2.17 billion, say MPs.

In a wide-ranging Report on NHS litigation reform, the Health and Social Care Committee finds the current system for compensating injured patients in England ‘not fit for purpose’ and urges a radicallydifferent system to be adopted.

Reforms would introduce an administrative scheme which would establish entitlement to compensation on the basis that correct procedures were not followed and the system failed to perform rather than clinical negligence which relies on proving individual fault. The new system would prioritise learning from mistakes and would reduce costs.

Currently, litigation offers the only route by which those harmed can access compensation. MPs say in addition to being grossly expensive and adversarial, the existing system encourages individual blame instead of collective learning.

MPs also call for the scrapping of the expected future earnings link in claims for those under 18, a system that leads to ‘manifest unfairness’ with the child of a cleaner receiving less compensation than the child of a banker.

Jeremy Hunt, Chair of the Health and Social Care Committee, said:

“The system of compensating patients for negligence in the NHS is long overdue for reform. We’re urging the Government to adopt our recommendations to reduce both the number of tragedies and the soaring costs to the NHS.  

“It is unsustainable for the NHS in England to pay out more than £2 billion in negligence payments every year – a sum equal to the cost of running four hospitals – a figure that will double in 10 years if left unchecked.

“Under the current system, patients have to fight for compensation, often a bitter, slow and stressful experience with a quarter of the enormous taxpayer-funded sums ending up in the pockets of lawyers.

“We need a better system that learns from mistakes, following the lead of countries like New Zealand and Sweden. We must move away from a culture of blame to one that puts the prevention of future harms at its core.”

ENDS

Key recommendations: (Full list of recommendations is provided in the attached Report)

• An injured patient or their family should be able to approach an independent administrative body to investigate their case, decide if in the ordinary course of events the harm was avoidable, and determine eligibility for compensation.
• The new independent administrative body should initially be focused on cases related to birth injury which, typically, are the most expensive, have high levels of patient need and take years to resolve.
• Once it has become embedded, the new patient compensation system should be expanded to cover all claims made against the NHS by injured patients.
• Assessment of future earnings based on parental income should be scrapped for all NHS-related clinical negligence claims involving children under 18 years of age.
• Compensation should be based on the additional costs necessary to top up care available through the NHS and social care system rather than the current assumption that all care will be provided privately.

Aside from the radical reform they propose, the Committee also considered reforms that could be made to the existing system of clinical negligence litigation in advance of the administrative compensation system being introduced: 

• Before any court proceedings there should be compulsory use of alternative dispute resolution mechanisms.
• After any tragedy involving medical error a standardised process of investigation should be introduced which has the overriding priority to learn from mistakes and prevent tragedies being repeated.

International best practice promotes patient safety

The Report finds the current system of clinical negligence is in stark contrast to international best practice in terms of patient safety. Administrative compensation systems adopted by Scandinavian countries and others such as New Zealand are cheaper to run with more compensation going to patients and data gathering to promote learning and patient safety.

Focus on blame preventing learning

Witnesses told the inquiry that litigation was not set up to deliver learning outcomes and the clinical negligence process cannot generate learning to solve problems because it was too adversarial and “always takes far too long”. A study found that in 2017 the average time period from a birth-related brain injury in a baby occurring to full quantification of a settlement was 11.5 years.

The Report pays tribute to parents who gave moving and powerful evidence about the serious injuries suffered by their children because of medical error which in three cases involved the tragic loss of a child. All described failures in care and the abject failure of the system to properly investigate and understand what went wrong. One parent described feeling devastated despite having ‘won’ compensation. She said that key aspects of her daughter’s death were never investigated, she saw “no evidence of learning” and there was never an opportunity to learn from the tragedy because the circumstances had “not been properly understood, recognised and acknowledged” by the NHS.

Financial case for reform:

• NHS pays more than £2 billion (in England) each year in compensation for harm done to patients during their treatment.
• Compensation bill set to double over next ten years to £4.6 billion.
• Cost last year was equivalent to the annual running costs of four average sized hospitals.
• Legal bills account for more than a quarter of all costs paid.
• Clinical negligence costs in England are the equivalent of double those paid in New Zealand or Sweden. 
• The total provision for clinical negligence costs is the equivalent of £3,600 for every household in England compared to £700 per household in 2010.
• Future liabilities for clinical negligence “increased from £9 billion at 31 March 2007” to £82.4 billion by March 2021.