England: Government will need extra £2.5bn for NHS legal claims

Increasing levels of compensation and bigger legal bills have caused the spike, the NHS Litigation authority, which deals with claims against medical staff and hospitals, has said.

Over the past year the amount paid out has risen sharply from £774 million to just shy of £1 billion. The NHS legal team has put aside money for as yet unresolved claims, leading the Medical Defence Union to warn of a “time bomb” of payouts.

More than 15,000 news claims were lodged against the NHS in the past year – mainly for medical compensation. Their total value jumped to £56.4bn from £30.9bn – an 82.5 per cent increase.

And The Brief reports that NHS’ defence costs have meanwhile risen by £17m to £120.1m.

Christine Tomkins, chief executive of the Medical Defence Union said: “There is a compensation crisis and it affects every English taxpayer.” She added that the “NHS is sitting on a time bomb of future claims and legal reform is the only way to address it and to keep money within the NHS for treatment of patients.”

Lawyers’ fees have also gone up. In 2013-14, lawyers’ costs accounted for four per cent on a payout of £1m – the following year they accounted for 18 per cent of a comparable claim.

Ian Dilks, chairman of the NHS Litigation Authority, said the body was working with ministers to resolve the problem.

The figures will bolster the case for introducing a cap on the legal fees that can be charged on smaller clinical negligence claims. Ministers will likely consult on the proposal soon, with a fixed-fee regime to be mooted for legal costs in clinical negligence cases worth up to £250,000.

But claimant lawyers are against any such move. Neil Sugarman, president of the Association of Personal Injury Lawyers (APIL), said that “the main focus should be on the fact that people have been injured”.