More NHS claims settling pre-issue but legal costs continue to rise

Vernon: More cooperative approach across the legal market

NHS Resolution concluded a record 77% of claims without court proceedings in the last year but both claimant and defendant legal costs rose, its annual report has revealed.

The total of new clinical negligence claims and reported incidents reached 15,078 in the year to 31 March 2022, up 13% on the previous year.

However, this was mainly due to the bulk take-on of general practice indemnity claims for pre-1 April 2019 incidents from medical defence organisations; the number of new claims from NHS trusts actually fell for the third year running, to 10,226 – compared to 10,760 in 2020/21 and 11,145 in 2019/20.

Claims inflation “has slightly abated”, the report said, “with increasing evidence that the long-term trend is below levels previously assumed. While this is positive news, the overall trajectory remains upwards and of concern”.

The proportion of claims resolved without proceedings has risen from 68% five years earlier.

“This is evidence of our success in keeping claims out of court by using the widest range of approaches to dispute resolution available to us,” the report said.

“For example, our Covid-19 clinical negligence protocol, launched in collaboration with claimant lawyers in August 2020, continues to provide impetus to consider alternative means of resolution and avoid litigation.”

Even where clinical claims have entered litigation, the percentage resolved without an award of damages increased from 19% to 25%.

NHS Resolution still paid out £2.4bn on clinical claims in the year, the 9% rise attributed primarily to damages and claimant legal costs payments in high-value (more than £3.5m) claims.

It comprised damages of nearly £1.8bn, claimant legal costs of £471m (up 5%) and NHS legal costs of £157m (up 3.5%).

However, the average claimant costs paid out on smaller claims – those up to £100,000 – also went up after three years when the figure had been decline; at £52,953, it increased by more than 9%. Average defence costs rose 7.6% to £23,250.

Nonetheless, the report was less strident about rising claimant legal costs than it has been in previous years.

Of the 16,484 settled clinical and non-clinical claims, 49% settled without damages, compared to 44% the year before.

NHS Resolution’s overall claims provision at 31 March 2022 increased dramatically from £85bn to £129bn, but almost all of this was due to a change to the HM Treasury long-term discount rates, an accounting estimate which places a value in today’s prices on liabilities that are expected to fall due for settlement in the future.

The costs of claims arising from incidents occurring in 2021/22 was estimated to be £13.3bn for NHS trusts, an increase from the £7.9bn reported in 2020/21, again mainly due to the accounting change. Without this, NHS Resolution estimated that the annual cost of harm would have been £8.7bn.

The report said it was too early to determine the impact from Covid-19 on future claims volumes and values – it takes an average of 3.1 years from an incident taking place to a claim being lodged. In the year, NHS Resolution received just 22 claims related to Covid-19.

Its chief executive, Helen Vernon, said: “Court proceedings can be distressing for patients and the NHS staff who care for them, as well as costly. The continued fall in litigation driven by innovation in dispute resolution and a more cooperative approach across the legal market is to be welcomed.”

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