Civil Liability Bill [HL]

Lord Ribeiro Excerpts

2nd reading (Hansard): House of Lords
Tuesday 24th April 2018 Lords Chamber

[Lord Ribeiro (Con)]

My Lords, I find myself not only at the end of the list of speakers but surrounded by lawyers and other more knowledgeable people than I on this subject. The Bill affects patients—those who have been injured and those who seek compensation. As a clinician, I have witnessed some of these injuries, which range from merely a stiff neck to a quadriplegic patient, as was mentioned by the noble and learned Lord, Lord Hope of Craighead.

I have also despaired of the length of time it takes before cases are settled and compensation made. Sadly, in some instances the patients involved receive substantially less than their lawyers and claims companies. Unlike car or house insurance, in which the insurer knows the accident falls within the terms of their policy, clinical negligence poses a unique problem. The doctor often does not know that there has been an incident that might result in a claim for negligence. Clinical negligence cases have a long tail. The doctor is often notified three to five years after the incident.

The Medical Defence Union, to which I am grateful for providing some of the data I will be using today, noted 1,000 claims since 1995 with more than ten years between the incident and the notification. The limitation period on claims is three years from the date of the incident or three years from when the patient was aware that the alleged negligence had occurred. The long tail means that indemnifiers need sufficient funds to pay claims years into the future.

As we have heard from many speakers, the drastic change in the discount rate from 2.5% to 0.75% from 20 March last year has had the practical effect of inflating substantially awards to patients and litigants. I shall give one example from a surgical context. Before the discount rate, the MDU’s highest payment on behalf of a consultant member was £9.2 million to a patient with a spinal injury, who would be expected to live for many years. After March 2017, a similar claim would cost £17.45 million. With children, it is even worse, because they have a much longer future ahead of them. In one case involving a GP, a child aged 14 with a 50-year life expectancy would have expected to receive £8.4 million at the 2.5% discount rate. That same patient would now receive £17.5 million at the 0.75% rate.

The financial crisis related to this policy is huge. When inflation is added to a claim—let us say at 10%; I know that the rate is lower at the moment—claims double every seven years. The National Audit Office produced a good report on this matter in September 2017, Managing the Costs of Clinical Negligence in Trusts, where it recognised the problem and noted that the drivers of the cost of clinical negligence claims are related to the legal and economic environment and are not linked to patient safety—I shall return to patient safety later and how the health service safety investigations body legislated for last year can help reduce litigation through a learning culture.

The spiralling cost of claims is beyond the control of doctors and other healthcare professionals. Paragraph 16 of the NAO’s report states:

“There is no evidence yet that the rise in clinical negligence claims is related to poorer patient safety, but declining performance against waiting time standards is one factor which increases the risk of future claims from delayed diagnosis or treatment”.


The NHS Resolution annual report for the financial year ending 31 March 2017 focused on the impact of the discount rate and the financial crisis that it had caused for the NHS. It stated:

“The liabilities arising from incidents up to 31 March 2017 for all types of claims have increased significantly, with the provision reported in our accounts increasing from £56.4 billion in 2015/16 to £65.1 billion in 2017/18. In addition to the changes in discount rate factors, these increases are due to continued inflation for damages awards and legal costs, and the growing number of cases where we provide for the cost of care for life”.


In a letter to the Lord Chancellor in January 2018, the NHS Confederation raised the issue of rising costs and the impact of the discount rate. It noted that the Chancellor of the Exchequer’s Budget speech of March 2017 had indicated that the Government had put aside £5.9 billion for three years to 2020 to protect the NHS from the effects of the change in the personal injury discount rate. My question for my noble and learned friend the Minister is: what happens after 2020? If the problem is not resolved by then, costs will surely rise. Perhaps the Minister can say where we are with the consultation on the discount rate being carried out by the Ministry of Justice and when we can expect to learn the results. What progress are the Ministry of Justice and the Department of Health and Social Care making on the recommendation of the National Audit Office that a co-ordinated strategy is required to manage the growth in clinical negligence costs by September 2018?

One major block to reducing clinical negligence costs to the NHS, as was mentioned earlier by the noble and learned Lord, Lord Mackay, the noble Lord, Lord Faulks, and other noble Lords, is Section 2(4) of the Law Reform (Personal Injuries) Act 1948. I look forward to hearing more about this, and I hope that the Minister will be in a position to provide an amendment in Committee so that we can explore it a bit further.

There is no doubt that Section 2(4) was enacted in good faith at the birth of the National Health Service—70 years ago in 1948. It completely ignored care that could be provided in the NHS. One wonders whether this might have been—it is just my thought—because few lawyers in those days would have considered seeking treatment in the new health service, preferring to stay with what they knew best. Currently, however, bodies such as the Medical Defence Union, the Medical Protection Society and NHS Resolution are prevented by Section 2(4) from compensating patients on the basis of care provided by the NHS—even if that care is of a high standard and has been provided before the award. Thus, billions of pounds of taxpayers’ money earmarked for the NHS finds its way instead into the independent care sector.

Currently, a claimant awarded damages on the presumption that he or she will pay for care and treatment privately is not precluded from using NHS care. Some claimants, having been awarded compensation, have admitted that they have gone on to use the NHS. That seems like a double whammy if ever there was one.

Surely it is time to stop robbing Peter to pay Paul. It is time that Section 2(4) of the 1948 Act was repealed. Unless we do that, I have great concerns about the long-term sustainability of the NHS and social care, a subject that we shall debate on Thursday. I have grave concerns that we will not be able to fund the NHS if it continues to incur the liabilities so graphically described by many speakers today. The NAO report shows that in 2016-17 10,600 new clinical negligence claims were registered with NHS Resolution under the Clinical Negligence Scheme for Trusts—CNST. Furthermore, NHS Resolution spent £1.6 billion on claims in 2016-17 and there is a £60 billion provision to pay for the future cost of claims arising in 2016-17.

This is unsustainable. As in the film “We Need to Talk About Kevin”, we need to talk about repealing Section 2(4). Although the scope of this Bill is tight, I am sure that there are enough noble and noble and learned Lords here to make it possible to include this.

Finally, the proposed health service safety investigation body will provide an opportunity to address the rising cost of litigation and a safe space for healthcare professionals to meet and discuss healthcare issues—and near misses—that could lead to litigation. The NAO proposes a safety and learning team to engage with trusts on patient safety issues, but I believe that in the HSSB we will have a force for good that could do much to reduce the cost of litigation and at the same time improve patient safety.

More medical input has been suggested, and I agree with my noble friend the Minister of State that no settlement should be possible without a medical report. I agree, too, with the views of the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Faulks, that a committee—advisory or otherwise—supporting the Lord Chancellor should include a medical expert, for the reasons the noble and learned Lord, Lord Thomas, gave. Medical knowledge and diagnostic assessments and skills are improving continuously and we may reach a point when we can set a timeframe for how long an injury may last.