Health leaders have written to Justice Secretary David Gauke to say that the costs of medical negligence claims are “spiralling” out of control and have asked for urgent reform.

The British Medical Association, medical lawyers and the NHS Confederation have collectively written to the Justice Secretary to ask that the compensation paid out in medical negligence claims is reduced; as such pay outs are taking money away from frontline healthcare.

According to the letter, the NHS in England spent £1.7bn on medical negligence claims in 2017 and this is almost double the amount that was spent in 2010.

In the letter, they say: “We fully accept that there must be reasonable compensation for patients harmed through clinical negligence, but this needs to be balanced against society’s ability to pay.”
They also say that government reforms made to the claims system have caused compensation to increase. This change that they are referring to is known as the ‘discount rate’, which applies when clients are paid out a large lump sum at the conclusion of their case in order to pay for things such as a lifetime of care. The purpose of the discount rate is that when someone is paid a large lump sum they are expected to invest it and earn interest and so there should be a discount applied to the lump sum.

The issue for Claimants however, has been that the previous discount rate of 2.5% was much higher than the returns you could expect from investments, which meant that the money received in compensation didn’t go as far as was expected. Claimant’s were getting a very poor deal. The discount rate was set at 2.5% in 2001 and, despite falling interest rates, was not revisited until recently, early 2017 when the discount rate was reduced massively to -0.75%. This reflects the very low interest rates currently offered to investors and the government believe reflects the amount that lump sums would need to be adjusted by to ensure that they compensate Claimant’s adequately for the costs they will bear due to the injuries suffered due to negligence.

This seems to be just another in a series of moves made by the NHS to try and reduce the amount that they have to pay out in medical negligence claims. There are already plans in place to limit the costs that solicitors receive for dealing with these types of cases, but now they also want to restrict the amount of money that victims of medical negligence are rightfully entitled to.
We here at Jordans appreciates that the NHS is a public body and that it is stretched, but feel strongly that despite this, they should be held to account when serious mistakes are made and people’s lives are significantly changed for the worse.

Whether the proposals within the NHS’ letter will have any impact is yet to be seen.
Here at Jordans we are passionate about seeking the rightful compensation owed to our clients when they have suffered medical negligence, to help them get their lives’ back on track. If you think you have suffered from medical negligence then call 01924457171 to speak to one of our specialists today.


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