National Health Service: Liability Costs

Lord Lansley Excerpts

Thursday 2nd December 2021 Grand Committee

[Lord Lansley (Con)]

My Lords, I am pleased to follow my noble friend, who has made an interesting and helpful contribution, not only from the legal point of view but from that of policy. We are all grateful to my noble and learned friend for initiating this debate, which gives us an opportunity to refer to some things that would help the NHS. In the process, we might also provide some additional emotional, physical and practical help to those who suffer harm as a consequence of failings in NHS treatment.

I do not come at this as a lawyer at all. I had responsibility for the health service for a while, but I probably devoted more time and energy to thinking about this issue during the passage of the NHS Redress Act 2006, when I was the shadow Secretary of State, than at any other time. Noble Lords will be aware that we in Parliament often devote our time to such Bills in the fond expectation that someone will do something with them afterwards. That did not happen with the redress Act; it was not commenced. There was a Labour Government at the time and we had a pretty full debate on it. I do not entirely agree with the Act, but I would say two things about it.

First, I think that at the end of the day we all subscribe to the proposition that we should not go down the route of a no-fault compensation system. My view has always been that it is incredibly difficult to distinguish between harm resulting from the fact of a disease and harm resulting from the treatment for that disease. In my case, I have had radiotherapy, surgery and so on; I have consequences, but I do not think that the NHS did anything other than look after me splendidly. Radiotherapy causes damage, but I do not expect that I should be compensated for that damage.

That leaves us with a third category, where I think that we have a taxpayer responsibility: harm that results from treatment that is not up to the standard that patients have a right to expect and, as my noble friend said, that the duty of care would require. If that duty of care is breached and harm results, a liability is established. I think that we were quite clear at the time and have continued to take the view that we should focus on trying to ensure that, where harm results from a poorer standard of treatment, compensation should arise.

The second thing that came out of all this was that it is absolutely clear that what patients and their families are looking for is openness and transparency— an understanding that something went wrong, an acknowledgment of fault and a desire and willingness to learn from it and to do better in future. Very often, what you hear from patients and families is that they do not want this to happen to somebody else again. In that respect my noble and learned friend is absolutely right.

How do we learn from this? The Health and Care Bill starts here next week and there are patient safety aspects to it, but a lot of this rests on the way in which the NHS manages itself. Of course, those who are responsible for NHS services are incentivised directly by the Care Quality Commission and the way in which it conducts its reports and looks at the services provided, and by NHS Resolution itself. The way in which the NHS funds this is through the payment of what are in effect premiums to NHS Resolution, which is effectively an insurance system for the NHS and indeed for private providers of NHS services and now for general practitioners as well. It does so on the basis that the premium charged is related to an extent not only to the risks that are run but to the standard of service that is being offered. There are direct incentives from NHS Resolution to trusts to get it right and we want to sustain that.

If I may, I will make passing reference to the report from our noble friend Lady Cumberlege. I think that she might wonder, as I do, whether we cannot use NHS Resolution more, to be an agency through which categories of patients who have sustained harm can be in a scheme for compensation, rather than simply operating on the basis of claims that are brought directly before the courts.

I turn to the courts and in a sense respond to the question asked by my noble and learned friend in this debate. Out of the NHS Redress Act and subsequent thought come three things. One is that we argued in 2006 for a fact-finding phase. A lot of the costs entailed in cases brought before NHS Resolution are down to expert witnesses and legal representation. We can significantly reduce those costs if there is a shared fact-finding phase that then has to be accepted as the basis on which a negotiated settlement might emerge. That was not built into the Act at the time, but I still think that we should go down that path.

Secondly, there is the question of the discount rate. It was probably about the time I was Secretary of State that suddenly the cost to the NHS of negligence claims increased dramatically—I think that it nearly doubled—and this was simply because the discount rate changed. Very low interest rates equate to very large sums required to deliver a given standard of care, and the costs associated with it, over a long period. We cannot just go around manipulating the discount rate, and my noble and learned friend will say that there is a lot of history to all this, but I think that what we could do—I will finish with this—is at least address the issue that half the cost of claims relates unfortunately to maternity services and the consequences for neonates and very small children. These are lifelong costs and the NHS very often meets many of them, whether through its own services or through NHS continuing healthcare.

As I understand it, the court does not really take account of that. What it sets out to do is provide a sufficient sum by way of damages that would allow the family to be compensated to the extent that they can provide all the services that are required for the child. The fact that these services will be provided by the NHS is not sufficiently taken into account. We should go down the path of saying that, where the NHS comes in and looks after somebody following an acceptance of fault, the level of damages that should be paid as a consequence should be reduced.

I am grateful to have had the opportunity to say a few things on this. I think that it is very much unfinished business, not least because of the lack of action on the NHS Redress Act 2006. I hope that this will be a spur to action, following what my noble and learned friend has brought before us.