Soaring Compensation Payouts Create Fears of NHS Bankruptcy

The chief executive of the primary body responsible for insuring the NHS has appealed for new legislation to prevent further increases in the value of medical negligence compensation claims. Christine Tomkins of the Medical Defence Union has claimed that the soaring cost of NHS Compensation Claim settlements is crippling the health financially and without changes in the law, could lead to NHS bankruptcy.

The size of medical negligence settlements is thought to increasing by as much as 10% every year due to higher care standards and life expectancy improvements. Ms Tomkins argues that the billions paid out by the NHS to settle legal matters could fund a dozen hospitals and the NHS cannot continue paying out such huge sums. She therefore proposes a dramatic cut in the value of compensation claims. Her main gripe lies with the fact that the current system is based on the 1948 Personal Injuries Act which required that the cost of future care is built in to compensation payouts based on private care costs rather than free NHS care.

However, her proposals have been criticised by personal injury lawyers who argue that it is the victims of NHS professionals’ medical negligence who will suffer as a result by losing out on the full compensation they deserve.

Medical negligence litigation relating to maternity services have been the most costly over the last 10 years, with just over £3 billion paid out by the NHSLA which insures NHS hospital trusts. Medical professionals have suggested that one way of preventing so many claims in this area is to hire more consultants in order to prevent the number of medical mistakes made. Indeed, over 5000 medical negligence claims made against the NHS included junior doctors or midwives with insufficient supervision. Whilst this may add to the hospital wage bill, it could lead to considerably less money paid out in compensation.

Alternatively, the NHS could simply look to improve standards. If you look at the statistics published by independent medical think tank, Dr Foster, it’s perfectly clear that while some hospitals have consistently high standards, others fail to achieve specially high standards regularly – often by simply failing to adopt recommended procedures – and it’s those hospitals whose management fails to keep standards high enough that are consistently the target of many more claims for medical negligence compensation.

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