MDU Urges Chancellor to Reform Clinical Negligence Costs Ahead of Budget

The Medical Defence Union (MDU) has called on the Chancellor of the Exchequer to take urgent action regarding the escalating legal costs associated with clinical negligence claims. In an open letter issued ahead of the upcoming Budget on March 15, 2024, the MDU highlighted that the National Health Service (NHS) incurred over £800 million in legal fees in the past year, with £620 million directly paid to claimant lawyers. These costs have drawn attention as they significantly exceed the compensation awarded to claimants, particularly for lower-value claims.

The MDU emphasizes the need for introducing Fixed Recoverable Costs (FRC) for these lower-value claims, a policy that has been promised for some time and could potentially save the NHS more than £50 million annually. Although this scheme was initially set to be implemented in April 2024, progress has stalled due to “outstanding issues,” leaving the healthcare system in a precarious position.

In a recent appearance before the Public Accounts Committee, representatives from the Department of Health and Social Care indicated that any future plans to address clinical negligence costs hinge on the findings of a review conducted by David Lock KC. This review was completed over the summer and is currently awaiting consideration by Ministers. The MDU has urged the government to make the recommendations from this review public.

Dr. Matthew Lee, CEO of the MDU, expressed concern over the rising costs, stating, “The MDU has been sounding the alarm bell on the cost of clinical negligence for years, particularly around rising legal costs. We’ve written to the Chancellor because the Budget offers a real opportunity for this Government to take decisive action and halt the eye-watering sums the NHS is paying out in legal fees.”

Dr. Lee further emphasized the importance of ensuring that those harmed by negligence receive appropriate compensation. Yet, he argued that it is unreasonable for legal costs to far exceed the compensation awarded. He noted, “Action needs to be taken to keep this money within the NHS to support patient care and frontline services, which is what the UK taxpayer expects.”

The MDU is also advocating for changes to the Law Reform (Personal Injuries) Act 1948. Currently, this legislation mandates that courts calculate compensation based on private healthcare costs rather than those of the NHS. This can lead to a situation where the NHS effectively pays double if claimants opt for restorative treatment through NHS services after receiving compensation.

Dr. Lee articulated the MDU’s stance on this issue: “Our view is simple – this is a historic anomaly that must be addressed. As it stands, the NHS risks paying twice in some cases: once to settle claims, and again if the claimant seeks remedial treatment via the NHS.”

As the Budget approaches, the MDU’s call for reform underscores the pressing need to reassess the existing clinical negligence framework to ensure a more sustainable and fair system for all parties involved.