Professional Medical Indemnity Insurance

Paul Beresford Excerpts

Thursday 16th June 2022 Commons Chamber

[Sir Paul Beresford (Mole Valley) (Con)]

I am delighted to see my hon. Friend the Minister on the Front Bench. She and I have vied in the Chamber a few times, but we are on the side. I hope that we will be on the same side on this issue.

I apologise for the topic being niche, and I obviously have a declared interest. As a very part-time practising healthcare professional and a very full-time MP, I have been under considerable pressure on two issues relating to professional medical indemnity. The whole of the medical and dental professions seem to be on my back at various times. All registered healthcare professionals in this country are required to have indemnity insurance to be allowed to practise. As my hon. Friend the Minister will be aware, her Department has a couple of consultation documents relating to indemnity and it is, I understand, currently considering responses. Bearing in mind the time available—that has lengthened, but I assure her I am not going to fill the time, much to the relief, I suspect, of Madam Deputy Speaker as well—I will raise two key issues. They are from my own personal experience, and particularly from the experience of other medical and dental professionals who have been pressing for action.

I have a closer link than most with the first subject, having been a board member of Dental Protection, which is a subsidiary of the Medical Protection Society. I obtained my own personal indemnity cover through Dental Protection for many years, from when I first started practising in the United Kingdom. Later, I moved from discretionary to contractual insurance indemnity through MIA insurance and, more recently, through Densura, which is part of Lockton.

As I am sure the Minister will be aware, there is a distinct difference between the two types of organisations offering indemnity. Dental Protection is one of the three discretionary mutual membership organisations. They are not insurance companies. There are now several contractual insurance companies, such as the British Dental Association and Densura. They are insurance-based companies and they source their indemnity through huge multinational insurance companies, such as the Royal and Sun Alliance.

I understand that Dental Protection and the Medical Protection Society still maintain their cover as discretionary. That allows them to apply discretion to accept or reject any particular case that is brought to them. I realise that that is not commonly used, but it is a major and important contractual difference, in that that does not apply to the insurance companies, which are bound by contract. I believe that that discretionary section should not be allowed. In effect, discretion means that, if a self-indemnified professional is challenged and sued, and seeks assistance from their indemnity provider, it is possible for Dental Protection, MPS or either of the other mutual societies to use their discretion for whatever reason and decline the indemnity for the professional.

I reiterate that that is uncommon, but I can recall a number of cases in discussion with the professional media over past years. I also reiterate that, although it is uncommon, it is damaging. One particular case sticks in my mind. A dentist was abandoned—that is exactly what he was, abandoned—by his indemnifier. Despite considerable financial difficulties, he funded his challenge to the claim through the courts. He won the case. Despite that victory and despite being awarded costs, I very much doubt that he recovered 100% of his costs. It should also be remembered that, if a claimant has a genuine claim and indemnity is withdrawn, there is a reasonable possibility that the claimant, particularly if the claim is large, will not receive the appropriate reimbursement if the clinician has insufficient funds to meet it. That has happened.

I understand that the Secretary of State for Health and Social Care has announced, following the Paterson breast surgery inquiry, that professional medical indemnity will be reformed and that discretionary indemnity will, as I hope, come to an end. I reiterate yet again that, although it is uncommon, the cases I know of or have been told about would have been covered by the insurance indemnity providers by contract. Those have been rejected by mutual indemnity societies exercising their discretion, resulting in both patients and professionals being distinctly disadvantaged. I therefore anticipate, as indicated by the Government in 2018, that discretionary indemnity will be ruled out of order and abolished. I certainly hope so.

The second area on which I wish to touch is the subject of a consultation document, published at the end of January, entitled “Fixed Recoverable Costs in Lower Value Clinical Negligence Claims”—a mouthful if ever there was one. I understand that the consultation concluded on 24 April. This is particularly relevant to dentists, who remain the principal group who purchase their own indemnity cover, through subscription or premium, as the case may be. Increasingly inflated claimant legal costs will, I believe, seriously increase the cost of that indemnity.

It has been brought to my attention that a number of claimant solicitors have been grossly inflating their costs because it is seen, to put it bluntly, as an easy cash cow. Some of those cases have been challenged by costs draftsmen, and when that happens it is not uncommon for the claimant solicitor to reduce their bills by 20% to 30%. To my mind, that suggests that the bills are being inflated, to put it simply and bluntly, as a try-on.

I have obtained a large number of examples, but will draw the Minister’s attention to only two, which I consider to be classic examples of opportunistic abuse of the system. One case, which concluded in 2019, resulted in a claimant award of £9,250 and a clinician solicitor cost of £10,042.80. The claim submitted by the claimant solicitor, however, was nowhere near that £10,000. Instead, it was for £87,297.89. The second claim, which also goes back to 2019, resulted in damages of £5,000 for the claimant, and the indemnity legal costs were similar to those for the first case, at £8,225.40. The claim for the claimant solicitor costs, however, was £72,886.23. That is quite outrageous.

Not all claimant solicitors are grossly inflating their costs—I must rush to point that out—but they are sufficient now to drastically affect indemnity subscriptions or premiums. Annual indemnity cover for the average full-time NHS dentist now costs in the region of £4,000. Many pay more. It is a substantial sum, especially to an NHS dentist at a time when the profession is under huge pressure, with a shortage of dentists and a considerable number of vacancies. The prospect of rapidly increasing costs to a beleaguered profession calls for prompt ministerial action. I await.

[The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)]

I thank my hon. Friend the Member for Mole Valley (Sir Paul Beresford) for securing this important debate. It is a niche area, but it is also a very important one relating to patient safety. Indemnity cover supports professionals in carrying out their practice. Even in the safest healthcare system in the world, mistakes will happen and it is important that patients are covered. Like my hon. Friend, I declare an interest: as a practising nurse, I have to have indemnity cover in order to maintain my registration.

Patient safety is the priority. Our focus is on making the NHS the safest healthcare system in the world. We are redoubling our efforts to deliver that, including in underpinning quality and safety. The national patient safety strategy, which was published in 2019, sets out exactly how we aim to do that. It is also important to learn the lessons when things go wrong. We want to make, and are making, changes to the culture of the NHS, to learn from mistakes and to be honest and open when mistakes happen.

There are legal requirements in place. All regulated healthcare professionals in the UK must hold adequate and appropriate indemnity to be able to practise. Healthcare professionals both in the NHS and in the independent sector need to have that in place. As my hon. Friend has said, the type of indemnity varies: it could be discretionary or it could cover all eventualities. Sometimes, when a claim is made where discretionary indemnity is in place, it is not paid out.

Most staff in the NHS benefit from state indemnity for clinical negligence. Decisions about state indemnity arrangements are a devolved matter, and they vary across the four nations. Broadly speaking, however, where state indemnity is in place in primary and secondary care, it provides cover for NHS professionals carrying out NHS work. Patients can be assured that, if something goes wrong, it will cover them, and cover is available to provide compensation where needed.

For work that is not covered under a state indemnity—many professionals, including dentists and GPs, provide NHS services under an NHS contract rather than being direct employees—discretionary indemnity is available. There have been problems with that, which the Paterson review very much highlighted. Although the Government did not accept all the recommendations in the Paterson review, we accepted a number of them partially. I am concerned about some of the issues that my hon. Friend raised in his speech, so we will be reviewing the Paterson recommendations shortly. I am keen that, where we have introduced measures in the NHS to improve an indemnity, the independent sector takes them up. We want to give the independent sector a chance to make those changes, but if it does not, we will have no hesitation about taking action.

[Sir Paul Beresford]

The Minister is absolutely right that every medical practitioner has to have indemnity. If a case arises in which there is a challenge to the clinician, if the indemnity is covered by a society that has discretion, and if that discretion is exercised, the cover that is insisted on by law is annulled.

[Maria Caulfield]

My hon. Friend is absolutely right. We have looked into reform: between 2018 and 2019, we consulted on whether to change the legislation to require all healthcare professionals to hold regulators’ insurance, rather than the discretionary indemnity. Unfortunately, covid came along and disrupted much of that work, and the response to the consultation was not published, but I am very happy to look at it again.

My hon. Friend is right that there is a gap in the system, not only for patients who may need compensation to deal with whatever outcome has happened as part of their care, but for healthcare professionals who need cover for a specific reason. Publication of the consultation that we ran in 2018 and 2019 was delayed, initially because of Paterson and then because of covid, but we hope to publish it fully this year. I will take the response very seriously; I hope to work with my hon. Friend on it so that, if changes to legislation are needed in relation to discretionary indemnity, we can make them.

The gap in the market that means that discretionary payments may not pay out will sometimes affect healthcare professionals admitting when mistakes have been made and learning from them. It does not help patients either. I very much take on board my hon. Friend’s points and am happy to work with him, because we remain committed to supporting healthcare workers across England in the clinical negligence sphere.



In 2019, in our response to concern about the rising costs of clinical negligence we touched on fixed recoverable costs—the second point my hon. Friend talked about. We recognise that costs are a significant part, albeit not the largest part, of lower level compensation payment to patients. Very often, legal fees make up a large percentage of the cost, and although we are improving patient safety we are not seeing clinical negligence costs fall in parallel. There is no correlation. To manage the rising costs of clinical negligence, we have consulted on fixed recoverable costs and capping them for the lower level of compensation payments. Such measures would not cap the compensation paid to patients, but they would cap the cost of the lawyers. We would do this in part to reduce costs, so the money could be spent on frontline services for patients instead, and in part because we recognise that legal costs can increase the cost of insurance for healthcare professionals who need indemnity cover.

The consultation on fixed recoverable costs finished recently and we are working our way through the responses. We hope to introduce measures fairly soon, and I will set out the detail as soon as I can. The Health and Social Care Committee carried out a review of patient safety and the cost of clinical negligence, and this is one area where, when I was before the Committee a few months ago, we promised reform. I am very committed to doing that.

We are also committed to acting on the recommendations of the Paterson inquiry, which looked at discretionary indemnity and highlighted the points my hon. Friend made about potential gaps in clinical negligence indemnity, in particular in the independent sector. I am committed to ensuring that lessons are learned from the inquiry, that the report is taken up and that we address those gaps. We have to look across healthcare, both the national health service and the independent sector, and consider a range of options. We will build on the work that we were doing before the inquiry and the consultation we started then, but also take forward the inquiry findings.

I hope that I have reassured my hon. Friend that by introducing the changes to fixed recoverable costs for clinical negligence with a value up to £25,000, we will not affect the payments to patients when claims are made, but instead tackle rising legal costs. I am happy to look into the indemnity issue he raises, because there is a gap and I recognise the points he made.

Question put and agreed to.