NHS litigation reform – Report Executive Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Health and Social Care Committee

Related inquiry: NHS litigation reform

Date Published: 28 April 2022

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Executive summary

1. Every year in England the NHS spends over £2 billion compensating patients who suffered harm during their treatment. A process that is supposed to deliver justice and incentivise improvements fails to do either: lessons are rarely learned and for families accessing compensation is slow, adversarial, stressful, and often bitter. Those who are most in need usually wait the longest and the system often appears arbitrary - based not on need but on whether clinical negligence can be proved.

2. At the same time, the costs of the system have continued to grow at an eye-watering rate. Ten years ago the NHS paid £900 million in damages; last year it was £2.17 billion - equivalent to the annual running costs of the biggest hospital Trust in England or four average sized hospitals. This sum is set to double over the next decade to £4.6 billion, and around a quarter of such costs go not to families but to lawyers. The English NHS spends 2% of its total income on clinical negligence compared to half that level in New Zealand or Sweden.

3. On top of the amount actually paid out, the NHS is incurring around four times that amount in future liabilities - £8.3 billion in 2021/22 alone. The rate at which such liabilities are being incurred adds urgency to the need for reform.

4. Advocates of the current system said that the best way to diminish costs is for the NHS to reduce harm and improve patient safety. There is, of course, a basic logic to this, but snowballing costs are not related to a decline in patient safety, rather they are the result of a growth in claims and steep increases in the value of awards and claimant legal fees. Indeed, adversarial litigation makes learning from mistakes harder not easier. Rather than reviewing cases in a way which accounts for context and system failure, a system focused on clinical negligence by definition seeks out individual failings. The lawyers who succeed in clinical negligence cases are not, ultimately, experts in medical practice, patient safety or systems failure but highly skilled legal professionals adept at demonstrating negligence.

5. We heard powerful testimony from people who have been through the labyrinthine process of litigation. We heard how much they relied upon solicitors who become their advocates and guides. But whilst we do not doubt that there are many excellent solicitors who act in the best interests of people who have suffered terrible trauma, the fact that their guidance, advocacy and compassion is so valued only underlines the necessity for change. Legal professionals will only take commercially viable cases with a prospect of success, meaning many people who have suffered harm never benefit from such expert advocacy.

6. Maintaining a costly and adversarial litigation system is evermore at odds with our understanding of how the NHS should respond to failures in care. England’s system of clinical negligence stands in stark contrast to international best practice in terms of patient safety. In other countries, gains are made by careful system-wide analysis rather than an insistent search for individual error. The creation of the Health Service Safety Investigations Body (HSSIB) as a statutory body to undertake no-blame safe-space investigations maps out the direction of travel for reducing harm and improving patient safety. Shortly, however, HSSIB will lose responsibility for 1,000 of the most serious maternity incidents which will not, therefore, benefit from no blame investigations.

7. We urgently need a system where the biggest priority is the prevention of future harm. This system should review the facts and circumstances of a case and compensate patients not on the basis of whether there was clinical negligence, but when there has been medical error or best practice was not followed. Any investigation should prioritise the identification of system changes that can be disseminated across the NHS to prevent mistakes from being repeated. Even if the threshold for compensation is not met, the patient or family should receive an explanation of what happened and data related to patient safety should be harvested and fed back into the system. We have taken evidence from various successful international schemes that each use a different threshold and we do not seek to be prescriptive over which threshold should be used, but it should be based around a system performance test and not individual fault. We recommend that the Government should consult widely at home - and evaluate best practice from abroad - to ensure that the bar is set appropriately.

8. Our central recommendation is therefore that the NHS adopt a radically different system for compensating injured patients which moves away from a system based on apportioning blame and prioritises learning from mistakes. An independent administrative body should be made responsible for investigating cases and determining eligibility for compensation in the most serious cases. Reconstituting the new Special Health Authority, which will take over maternity investigations from HSSIB, would be an efficient way for the Government to implement our recommendation. This would be the most effective long-term way to reduce both the number of tragedies and the cost to the NHS. Changing from a blame culture to a learning culture is not easy but can be accelerated by some simple but important changes to current NHS processes which we encourage the Government to adopt.

9. Firstly, there needs to be a change in the law so that access to compensation is based on agreement that correct procedures were not followed and the system failed to perform, rather than the higher threshold of clinical negligence by a hospital or clinician. Whilst this widens the pool of people entitled to compensation, the evidence from countries that have adopted such an approach is that overall costs will be lower not higher.

10. Then, in all cases, compensation should be based on the additional costs necessary to top up care available through the NHS and social care system rather than the current outdated assumption that all care will be provided privately.

11. When deciding compensation, the link to supposed future earnings leads to the manifest unfairness that the child of a cleaner receives less compensation than the child of a banker. This contradicts the basic principle of equality that sits at the heart of our health system and should be scrapped for all NHS-related clinical negligence claims involving children under 18 years of age.

12. Before any court case there should be compulsory use of alternative dispute resolution mechanisms (ADRs). This often happens before the start of a trial but should happen before the issuing of any court proceedings. The Government should consult on the format of ADR and whether ADR should include mediation or be an inquisitorial, ombudsman-style process.

13. Every hospital should have adequate numbers of staff trained in “just culture” practices to reduce confrontation and relationship breakdown between injured patients, their relatives, and bereaved families.

14. Learning lessons fast is essential but not possible with the current system. Whenever a potential litigation case arises there should be a standardised process across the NHS which focuses on the overriding priority to learn from mistakes and prevent tragedies being repeated. This process should last a maximum of six months and, at a minimum, should include the following elements: an independently led investigation involving both families and the Trust; implementation of any safety recommendations made; and communication of such lessons to the wider NHS.

15. In parallel, an investigation by an independent administrative Alternative Dispute Resolution body should have been completed and a determination on liability for compensation released to the family, the Trust and NHS Resolution. It is then a decision for the Trust and NHS Resolution as to whether to accept liability for a mistake or negligence and to commence payments. If at the end of the six-month window liability for cases relating to maternity care has not been accepted these would fall within the remit of the Early Notification scheme and NHS Resolution.

16. Implementing a new administrative system would be a significant task and one which may be best achieved in stages. The most complex and expensive cases are those related to birth injuries which leave children seriously disabled so it may be appropriate to pilot new changes in this area as has happened in Japan. Once established, and having proven its value, the administrative system should then be expanded to accommodate all claims for compensation made against the NHS.

17. Once established, the new administrative body should also agree a memorandum of understanding with the Office of the Chief Coroner to ensure consistency of investigation and provide transparency as to the process for the disclosure of information for inquests.

18. The reforms we recommend may appear daunting, but we concluded they can be achieved because, in various guises, administrative compensation systems have been adopted with great benefits in New Zealand, Japan, Florida, Virginia and across Scandinavia, where both cost savings and safety improvements have proved possible. In fact, a similar system is already in place for low-value cases in Wales and in 2006 Parliament passed legislation for low-value cases to be taken out of the clinical negligence system in England but the legislation sits on the statute book unimplemented.

19. Although the system would be no less generous in its awards than the courts, patients would always retain the option of pursuing clinical negligence cases and seeking redress via litigation. Evidence from abroad, however, indicates that, when given the choice, patients and families prefer the simpler administrative process and, in the system we recommend, the new body would be the mandatory first port of call for anyone who thinks they are entitled to compensation.

20. We also believe that the administrative body we propose should be empowered to change the way compensation is awarded. At present compensation is awarded on a ‘once and for all’ basis, but we recommend that awards be made with periodical review built in so that they can become responsive to the changing needs of patients. The requirements of a child with birth injuries, for example, can evolve over time and the most effective system would be one that can provide initial compensation within weeks of a claim and then be adapted to meet the individual child’s requirements as they grow and develop.