The
Medical Defence Union(MDU), the UK’s largest medico-legal provider for doctors, believes personal injury awards are rising in an unsustainable way. Clinical negligence claims inflation is rising in excess of 10% per year and has outstripped other forms of inflation over the past 125 years. Awards in England are now among the highest in the world and last year the NHS Litigation Authority, which handles negligence claims on behalf of National Health Service (NHS) hospitals in England, paid £1.2 billion in compensation, a rise from the previous year’s figure of £863m. Its estimate of its total liabilities in 2011 was a staggering £16.7bn.
These are liabilities funded directly or indirectly by taxpayers. The NHS pays damages directly to patients, and organisations like the MDU pay compensation on behalf of their NHS GP and dentist members, who are paid from NHS funds. Doctors in independent practice fund their own indemnity, but the cost is reflected in charges made to patients.
There needs to be a national debate about the cost of settling claims because society cannot afford the current rate of increase in the costs of compensating patients.
The inexorable rise in compensation
Over the last ten years, the rate of increase in damages in clinical negligence claims in England has far outstripped other forms of inflation such as house, wage or retail price inflation, as the graph below illustrates. Of course patients who are negligently damaged should be compensated, but that compensation must be fair and affordable.
Public interest
The inexorable rise in payments of costs and damages by clinical negligence defendants raises a more obvious public interest question because NHS money is being used that would otherwise be spent on providing healthcare services throughout the UK. This may not be the case in independent practice, but there is still a potential knock-on effect. If indemnity costs become unsustainable in key medical specialties so that, for example, neurosurgery or spinal surgery cannot be provided privately, the responsibility for providing that care will be pushed back into the already overstretched NHS.
Legal reforms
When we paid the first £1m plus damages claim in 1988, it was met with astonishment; now it is common for settlements to exceed £5m. Much of this is down to the rapidly increasing cost of paying for long term care for severely damaged patients. Another factor is the cost of compensating previously high earning patients for loss of earnings.
So what can be done? Under the current law, the cost of future care in such cases must be calculated on the basis that it will be provided privately, rather than through the public sector NHS. We are calling for repeal of this anachronistic law – a section of the Law Reform (Personal Injury) Act 1948. Calculating compensation on the basis that future care would be provided by the NHS and not the private sector could save billions and would allow money to be retained in the NHS for the benefit of all patients, including those who cannot prove negligence.
If a person negligently harmed was a high-earner, very large sums can be paid to compensate them for future projected earnings if they are not able to work as a result of the injury. In Australia, the maximum amount a person can claim is three times the national average salary, which we believe most people would consider fair.
You might argue that none of the damages would be needed if doctors didn’t make mistakes. We have actively advised members during our 127 year history, on how to avoid the common pitfalls we see which can lead to patients being harmed. But because the practice of medicine is complex and can never be totally risk-free we must ensure arrangements to compensate patients who are negligently damaged are fair and sustainable.
Compensation must be affordable for the NHS and defendant organisations like the MDU. With reform of the claims procedure, money could be prevented from pouring out of the NHS at a time when it is under increased financial pressure. There must be change and it must take into account the cost to society of paying for claims. We will all suffer for it if we fail to act now.