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<p>NHS Resolution handles clinical negligence claims on behalf of National Health
Service organisations and independent sector providers of NHS care in England.</p><p>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.</p><p>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.</p><p>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:</p><p>- 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</p><p>- 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.</p><p> </p><p>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.</p><p>Notes:</p><p>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 <em>Managing the costs of clinical negligence in trusts</em>,
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.</p><p>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.</p>
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