Question to the Department of Health and Social Care:

To ask Her Majesty's Government whether they have undertaken forward planning or modelling to estimate the cost of clinical negligence claims in the period to 2020–21.

NHS Resolution handles clinical negligence claims on behalf of National Health Service organisations and independent sector providers of NHS care in England.

NHS Resolution annually reviews and updates five-year forecasts for the cost of clinical negligence following an actuarial review of activity and key assumptions that underpin those costs, e.g. claims inflation, claims volumes. These key assumptions are published in the organisation’s Annual Report and Accounts. Clinical negligence costs relate to four indemnity schemes operated by NHS Resolution: Clinical Negligence Scheme for Trusts (CNST), which covers NHS providers of secondary health care, and the Existing Liabilities, Ex-Regional Health Authorities, and the Department of Health and Social Care’s Clinical schemes, all of which relate to legacy organisations.

The cost of clinical negligence claims covered by the figures in this response are damages, claimant legal costs, defence legal costs, and NHS Resolution’s administration costs. The costs reported here do not include costs incurred locally by NHS providers in dealing with claims, such as their own administration costs.

NHS Resolution’s Statement of Net Expenditure estimates costs of clinical negligence at £11.7 billion in its 2020-21 accounts. This the total of the two dimensions in relation to “costs” in the context of Government budgeting:

- Department Expenditure Limit costs – these are the costs of settling claims during the financial year and the administration of those claims. This is estimated to be £2.6 billion for 2020-21; and

- Annually Managed Expenditure costs – this is the change in the value of the liability arising from clinical negligence claims, both from those that have been received, and those that are expected to be received in relation to incidents up to 31 March 2021. This is estimated to be £9.1 billion for 2020-21.

The costs for 2020-21 have been estimated on the basis of the current personal injury discount rate of minus 0.75%. However, once the Civil Liability Bill becomes law, the Lord Chancellor is expected to review the rate promptly. The figures provided here may therefore, change as a result. NHS Resolution will also review its five-year forecasts again following the production of its 2018-19 Annual Report and Accounts, and any changes in the underpinning actuarial assumptions are likely to result in revised projections. The figures quoted should therefore be considered as broad estimates based on the latest available information and subject to change in the future.

Notes:

The Department Expenditure Limit costs are lower than the £3.2 billion costs for CNST only reported by the National Audit Office in their report Managing the costs of clinical negligence in trusts, published in September 2017. The £3.2 billion represents the 2016 forecast for CNST based on a personal injury discount rate of 2.5%. Actuarial reviews of assumptions undertaken by NHS Resolution in 2017 and 2018 have resulted in favourable movements in key assumptions.

The figures provided do not include claims brought against general practitioners, who are covered by separate indemnity arrangements through medical defence organisations and for which data is not centrally available.