Reeves criticised over lack of action on ballooning clinical negligence costs in Budget
A leading medical defence organisation has criticised the Chancellor for missing the opportunity to tackle the ‘eye-watering’ NHS clinical negligence bill.
In a statement following the Budget, Tom Reynolds, director of policy and communications at Medical Defence Union (MDU), explained that the “current system has led to legal fees ballooning to nearly four times the damages awarded for low-value claims.”
In a previous statment, before the Budget, the union revealed that the NHS spent more than £800m on legal fees relating to clinical negligence claims last year, of which £620m was paid to claimant lawyers.
The body that provides legal indemnity for the NHS, the NHS Resolution, received 14,428 new clinical negligence claims and reported incidents in 2024/25. It noted that £3.1bn was paid out in 2024/25 for compensation and associated costs on all of NHS Resolution’s clinical schemes, compared to £2.8bn in 2023/24.
The biggest risk department was maternity, with £1.3bn of the £3.1bn paid out for clinical negligence claims relating to this department.
The union, in its letter to the government, agreed to implement fixed recoverable costs (FRCs) for clinical negligence cases. Reynolds stated that this move “could save at least £50m a year for the NHS – funds that should be spent supporting doctors, nurses and other frontline staff.”
Despite the government initially agreeing, implementation has been delayed and is currently under review due to ‘outstanding issues’.
Review into rising clinical negligence costs
“We are disappointed that the Chancellor has missed an open goal to address this issue and we urge the government to implement a fixed recoverable costs system without further delay,” he added.
This comes as the department of health and social care appointed a senior barrister, David Lock KC, in the summer to review the rising costs of clinical negligence claims.
The union called on the government “to provide clarity on this issue now that the Lock Review is completed”, adding that “this review must be made public, to offer MPs and the public a clear understanding about the path forward.
Dr Matthew Lee, CEO of the MDU, previously said, “Those harmed by negligence must receive appropriate compensation; however, it cannot be right for legal costs to far outweigh these awards.”
The NHS did not play a huge role in Rachel Reeves’ Budget speech on Wednesday, compared to her Spending Review. However, there is £300m of new capital investment for NHS tech, with new digital tools intended to help NHS staff and improve productivity.