Lock: Advising health secretary
NHS Resolution (NHSR) should investigate the level of fees claimant clinical negligence lawyers deduct from clients’ damages as part of efforts to control the cost of claims, the public spending watchdog has recommended.
The National Audit Office (NAO) said the Department for Health & Social Care (DHSC) has accepted the recommendation from Parliament’s Public Accounts Committee that it needs to manage the costs of clinical negligence more effectively, “including a mechanism to control legal fees”.
“It will advise ministers on the drivers of costs, how to manage spending on clinical negligence and the potential merits of reform options.
“DHSC has asked David Lock KC to advise on how to improve patients’ experience of clinical negligence claims and manage rising legal costs.”
Mr Lock was a justice minister at the turn of the century in the first Labour government but lost his seat in the 2001 election, after which he returned to the Bar, specialising in NHS, social care and public law.
Since the summer, he has been working as an expert advisor to health secretary Wes Streeting.
The NAO reported today that the annual cost of settling clinical negligence claims has more than tripled in last two decades to £3.6bn in 2024-25, mainly due to an increase in the number of claims but also rising amounts of compensation.
While very-high value cases (with awards of £1m or more) accounted for 68% of all costs in 2024-25, they only constituted 2% of claims by volume.
Claimant legal costs paid out by the NHS have increased 3.6 times between 2006-07 and 2024-25, from £148m to £538m – 15% of the total cost of settled claims. The NHS’s legal costs have doubled in that time from £76m to £159m, now just 4% of overall costs.
Legal costs for low-value claims (for awards of £25,000 or less, which currently make up three-quarters of all claims) were 3.7 times higher than the damages awarded to claimants in 2024-25. Legal costs are also growing for medium-value claims (settlements between £25,001 and £250,000) and accounted for more than half of the total cost to settle these claims in 2024-25.
“Stakeholders from the legal sector noted some of the increased cost could be attributed to justice reforms,” the NAO noted.
“For example, historic changes to cap legal costs in other sectors of personal injury have reportedly increased the relative commercial appeal to firms of pursuing clinical negligence claims.
“They also said more recent efforts to improve the accountability of independent experts has led to a significant increase in expert fees.”
NHSR and industry stakeholders also told the NAO of “increasing financial interest in clinical negligence claims by venture capitalists who are actively using AI to triage casework”.
The NAO said that, since it last reported on clinical negligence in 2016-17, NHSR “has worked hard to reduce the financial and emotional cost of clinical negligence by resolving claims faster and without litigation wherever possible” – from 66% not being litigated then to a record 83% this year [1].
But claimant legal costs were still going up and “the full cost of claimants’ legal expenses is unknown because the figures do not include claimants’ legal costs for unsuccessful claims and legal firms may charge additional amounts from compensation awards where claims are successful.
“Such arrangements have the potential to further inflate the damages claimants seek.”
It recommended that NHSR should “explore with the legal market whether there is the potential for greater voluntary transparency on fee arrangements agreed between claimants and their lawyers”.
If not, NHSR should work with government “to consider alternative mechanisms for understanding the proportion of claimant damages legal firms recoup in fees, and the reasonableness of this to inform future policy development, for example: reviewing firms’ published fee arrangements; or seeking anonymised or population level data on the scale and distribution of claimant legal costs settled through damages”.
Other recommendations included building on NHSR’s existing use of analytics and AI to help provide a more comprehensive analysis of damages awarded.
Gareth Davies, head of the NAO, said: “Reducing harm to patients is clearly the best way of containing this cost. Alongside this, DHSC should consider whether the existing approach to legal costs remains proportionate for all claims, including whether alternative methods to compensate for negligent treatment could provide better outcomes for patients, with less cost overall.”
The report noted that the previous government’s proposal for fixed recoverable costs for low-value claims has stalled under Labour.
Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, said “eye-watering legal bills often vastly exceed the damages payable to those affected by low-value cases”.
He added: “It must not be forgotten that behind the amounts reported today lie many tragic incidents of patient harm.
“DHSC’s planned review of the clinical negligence system must provide greater transparency, improve patients’ experience of claims and manage these rising costs, whilst work continues to reduce future harm caused to patients.”
A DHSC spokeswoman said: “There has been an unacceptable rise in the cost of clinical negligence claims – billions that should have been spent on frontline services.
“From overhauling our broken safety landscape, to grasping the serious problems in maternity care – this government is grabbing hold of this problem and taking the decisive action patients and taxpayers deserve.
“Our 10-year health plan makes clear that patient safety is the bedrock of a healthy NHS and we are working to ensure we reduce the incidents that lead to claims.
“However, a large portion of these costs occur through the legal system and we have appointed legal expert David Lock KC to advise us on how to address rising legal costs and how we can improve the claims process for patients.”
Suzanne Trask, an executive committee member of the Association of Personal Injury Lawyers (APIL), said the report glossed over the fact that increases in claimant legal costs have been “propelled by a significant increase in delays to claims”.
APIL’s analysis of NHSR data showed the average time between claim notification and settlement increased by 51% in the decade to 2024.
“NHSR itself admits that the longer the cases run for, the higher the costs. Most delays are clearly within its own control,” Ms Trask said.
The cost of providing care to victims “has risen exponentially due to broader economic factors”, she added.
“It cannot be overlooked that the rate of avoidable harm in the NHS has also increased. The bigger picture here is the human cost. Negligence and suffering are at the root of every penny spent on trying to put it right.”