NHS Resolution continues to drive down litigation – Annual report and accounts published for 2021/22

Date published:

NHS Resolution has today published its annual report and accounts for 2021/22 which sets out how its innovative dispute resolution strategy has continued to drive down litigation against the NHS in England.

A record 77% of claims were resolved in 2021/22 without court proceedings, continuing the year-on-year reduction for the last five years, and in line with NHS Resolution’s strategy to keep patients and healthcare staff out of court. This was achieved by the delivery of a range of dispute resolution approaches described in the report and continued cooperation across the legal market, which continued to gain momentum during the pandemic. The reduction in litigation has not, however, been at the expense of a less rigorous approach to investigation.

NHS Resolution’s flagship Early Notification Scheme for maternity incidents is reported in detail as it entered its fifth year of accelerating the investigation of brain injury sustained at birth, supported by a new patient advisory group.

With an expanded remit into general practice, the report also describes how NHS Resolution has responded to its increased workload and responsibilities as well as wider changes in health and justice.

Helen Vernon, Chief Executive of NHS Resolution said: “Court proceedings can be distressing for patients and the NHS staff who care for them, as well as costly. The continued fall in litigation driven by innovation in dispute resolution and a more cooperative approach across the legal market is to be welcomed.”

The number of cases resolved continued to increase. 16,484 clinical and non-clinical claims were resolved in 2021/22 compared with 15,712 in 2020/21. The amount spent on claims in 2021/22 was £2.5 billion, compared to £2.3 billion from 2020/21.

NHS Resolution’s provision at 31 March 2022 increased from £85.2 billion to £128.6 billion. £42.6 billion of the increase arises from a change to the HM Treasury long-term discount rates, an accounting estimate which places a value in today’s prices on liabilities that are expected to fall due for settlement in the future.

NHS Resolution’s Annual report and accounts 2021/22 is now available.

Notes to editors:
• Payments against all our clinical schemes for 2021/22 were £2,402.8 million (£2,209.3 million in 2020/21) in total – which comprised damages paid to claimants of £1,775.3 million (£1,609.8 million in 2020/21), claimant legal costs of £470.9 million (£448.1 million in 2020/21) and NHS legal costs of £156.6 million (£151.4 million in 2020/21). The increase in NHS legal costs can be in part attributed to increased spending on the general practice indemnity schemes, mainly the Existing Liabilities Scheme for General Practice (ELSGP).
• Payments on Clinical Negligence Scheme for Trusts (CNST) claims increased by £152.8 million (7%) to £2,213.9 million from 2020/21. This increase was primarily in damages and claimant legal costs payments against high value (more than £3.5 million) claims.
• Negligence claims form a very small proportion of both the number of incidents and complaints reported in the NHS, and the many millions of individual episodes of care that are delivered by the NHS each year. There are many factors influencing the reasons why individuals bring a claim against the NHS, including factors in the legal market. There is also a significant time lag between an incident occurring and a claim being received – on average 3.1 years. It may also take several years to settle a claim, particularly those high-value claims where brain damage has occurred at birth, and payments may be made on those claims many years into the future. Taken together, this means that what NHS Resolution receives in terms of claims currently is only a very partial indicator of patient safety in the NHS in past years, and also what we can expect to pay out in settlement of those claims in the future.
• All schemes are run on a pay-as-you-go basis and so we only collect from members, or receive funding from the Department of Health and Social Care for what we calculate we will be paying out on claims on a year-on-year basis. We do not ‘collect’ nor ‘set-aside’ billions of pounds in anticipation of the future outgoings of our schemes. This is to ensure that money is not diverted from delivering the services and helps spread the burden of costs into the future, as and when they need to be paid out.
• The ‘provision’ is the best estimate of the expenditure required to settle the present obligation at the balance sheet date or transfer to a third party (for claims made and predicated to be made, so called ‘incurred but not reported claims’). The figure is updated annually and is an informed estimate that depends on assumptions about future developments and therefore lies within a range of possible results. When considering the provision, it is important to note that if there is a value allocated to a future periodical payment order this will change in response to changing needs and the lifespan of the claimant concerned.
• This year the ‘annual cost of harm’ is £13.3 billion of claims arising under the CNST scheme. The increase would have been £8.7 billion, which is comparable to previous years, if the HM Treasury discount rate change had not been applied. This is the value of the increase in the provision across all our indemnity schemes for liabilities for claims from activity that took place in the reporting year, including any payments made on those claims.