NHS clinical negligence bill rises to £4.4bn

The National Health Service faces a £4.4bn bill for clinical negligence - more that half the entire cash increase that the service is due to enjoy next year - according to the National Audit Office.

In presenting the service's audited accounts for last year, Sir John Bourn, the NAO's head, said the likely cost for clinical negligence claims arose by another £400m last year. The total is close to double the £2.3bn bill that the NHS faced four years ago.

Although the rate of increase in the likely liability is slowing, claims shot up to 4,115 for 2000-01 against 2,411 the previous year.

On top of the £4.4bn "likely" liabilities, there is a further tranche of "possible but unlikely" claims which if they crystallised, would add another £4bn - or £1.1bn more that last year - to the bill. Although the settlements will take place over many years - last year the NHS paid out about £450 m - the figures were described as "a staggering sum, of immense significance to the NHS," by Edward Leigh, chairman of the Commons Public Accounts Committee.

"Efforts to reform the current system for compensating patients who have been negligently harmed must continue apace," he said.

Two key recent judgments have increased the value of awards, particularly for continuing care and loss of earnings, according to Sir John. The health department is due "shortly" to publish a white paper on reform of the system following work by an advisory committee chaired by Liam Donaldson, the chief medical officer.

Ideas it has examined include a fixed tariff for settling claims outside court, similar to that for criminal injuries. Big lump sums could be replaced by periodic payments that can be reassessed as patients' circumstances change.

There could be an end to the assumption that future treatment will be paid for privately when, in practice, much of it is provided by the NHS. The study has also examined the idea of a no-fault compensation scheme.

The health department said reform is "long overdue", with legal and other costs accounting for more than half the damages in 45 per cent of cases and in many awards under £50,000.

In addition, new forms of clinical governance, a National Patient Safety Agency and a Clinical Assessment Authority are intended to introduce a new "no-blame" culture into the NHS. By spotting poor clinical practice early, the system hopes to cut the number of cases.

Sir John's report said the NHS improved its financial control last year and, in the areas it has concentrated on, has begun to cut fraud.

Current fraud on a £40bn budget is estimated at £112m a year, with another £81m considered to be at risk.

"Financial Times" 24th April 2002