Budget Misses 'Open Goal' to Tackle Soaring NHS Negligence Costs
A leading medical defence organisation has heavily criticised Chancellor Rachel Reeves for what it calls a missed opportunity to address the NHS's escalating clinical negligence costs in her recent Budget. The Medical Defence Union (MDU) expressed deep disappointment that no action was taken to reform a system where legal fees are spiralling out of control.
The Staggering Financial Burden on the NHS
The NHS spent more than £800m on legal fees for clinical negligence claims last year alone, with a staggering £620m of that sum going directly to claimant lawyers. Tom Reynolds, the MDU's Director of Policy and Communications, highlighted that the current system is fundamentally flawed, leading to legal costs ballooning to nearly four times the damages awarded in low-value claims.
The body responsible for NHS legal indemnity, NHS Resolution, received 14,428 new clinical negligence claims and incident reports in the 2024/25 period. The total payout for compensation and associated costs across all its clinical schemes rose to £3.1bn in 2024/25, up from £2.8bn the previous year.
Maternity services were identified as the area of highest financial risk, accounting for £1.3bn of the total £3.1bn paid out for clinical negligence.
Call for Immediate Action on Fixed Costs
The government had previously agreed to implement Fixed Recoverable Costs (FRCs) for clinical negligence cases, a move the MDU states could save the NHS at least £50 million annually. Reynolds emphasised that these are funds that should be reinvested into supporting doctors, nurses, and other frontline staff.
However, the implementation has been delayed and is now under review due to 'outstanding issues'. "We are disappointed that the Chancellor has missed an open goal to address this issue," Reynolds said, urging the government to enact the FRC system without further delay.
This criticism comes as the Department of Health and Social Care appointed senior barrister David Lock KC in the summer to conduct a review into the rising costs of clinical negligence claims. The MDU is now calling for this completed Lock Review to be made public, providing MPs and the public with a clear path forward.
Compensation Fairness vs. Legal Costs
Dr Matthew Lee, CEO of the MDU, reinforced the organisation's position, stating, "Those harmed by negligence must receive appropriate compensation; however, it cannot be right for legal costs to far outweigh these awards."
While the NHS did not feature prominently in Reeves' Budget speech, it did include £300m of new capital investment for NHS technology, intended to provide staff with new digital tools and improve overall productivity.
