New cap on legal costs to save NHS £500 million

The Department of Health and Social Care has said that the government is launching a consultation to tackle disproportionate legal fees for lower value clinical negligence claims.

The proposals would bring legal costs more in line with the amount of compensation being awarded for lower value claims, typically worth between £1,001 and £25,000. The plans would only affect the legal costs that people making claims and their lawyers can recover following a successful claim, not the amount of compensation that patients would receive.

The National Audit Office has identified the legal fees of people making claims as a significant factor to the overall cost of clinical negligence claims having significantly risen. These claimant legal costs are currently more than four times higher on average than defendant legal costs for lower value claims.

The overall cost of clinical negligence in England rose from £582 million in 2006/7 to £2.2 billion in 2020/21. For all claims, legal costs have increased more than fourfold to £433 million since 2006/7.

There is currently no limit on the legal costs that can be claimed by lawyers. Claimant legal costs are currently more than four times higher on average than defendant legal costs for lower value claims.

This takes vital funding from the NHS frontline as it continues to tackle the backlogs that have built up during the pandemic. It is estimated these proposals could save nearly half a billion pounds over the next ten years.

The government is also consulting on a new streamlined process to ensure claims are processed more quickly, ensuring faster resolution and reducing the need to go to court.

Maria Caulfield, Minister for Patient Safety, said: “I’m committed to making the NHS the safest healthcare system in the world. When harm does occur, it’s essential the NHS learns from what went wrong, and people who have been negligently harmed are entitled to claim compensation.

“Unfortunately, we are seeing some law firms profiting at the NHS’ expense through legal costs that far outweigh the actual compensation awarded to patients. This diverts resources from the NHS frontline as staff work hard to tackle the Covid-19 backlogs. Our proposals will cap legal costs for lower value claims to ensure they are fair and proportionate, and ensure patients’ claims are resolved as swiftly as possible without reducing the compensation they deserve.”