Collaboration continues to cut costs and resolve cases without need for litigation

Date published:

NHS Resolution’s Annual report and accounts for 2022/23, published today, demonstrates the organisation’s ongoing commitment to an innovative dispute resolution strategy that has effectively reduced litigation rates and costs.

In line with NHS Resolution’s strategy to keep patients and healthcare staff out of court, a record 80% of claims were resolved in 2022/23 without resorting to legal action, continuing this positive trend observed over the past six years.

An estimated £4.6 billion has been saved for the taxpayer as more cases are resolved without payment of damages, coupled with a robust approach to fraud.

These achievements are due to a collaborative approach seen across the legal market with some processes started during the pandemic continuing to be embraced. This positive, less adversarial approach, involves diverse and more empathetic methods of resolving compensation claims. Mediation, resolution meetings, and stock takes have all become integral components in effectively addressing claimants’ concerns and achieving satisfactory resolutions.

There has been significant progress in enhancing safety through upstream initiatives and expediting liability investigations on obstetric brain injury, specifically via the Early Notification Scheme. The report also highlights products that have been developed to share insights. These include, for example, the national maternity conference, Being fair 2 report, and a duty of candour animation.

As well as these, NHS Resolution has produced six insights papers and hosted a range of webinars and events for member trusts and scheme beneficiaries. All of this work has complemented the focus on dispute resolution and patient safety.

Our latest annual report showcases a significant advancement in early intervention and resolution, which has resulted in 80% of cases being resolved without resorting to litigation.

Our collaboration with partners in the healthcare and justice sectors has helped to share knowledge and improve patient safety. A sustained collaborative approach within the legal market, has meant a notable shift towards a more cooperative and compassionate mindset in delivering compensation.

We will continue to explore and implement an increasing range of dispute resolution options to ensure that litigation isn’t the only choice, whilst ensuring that that claims are thoroughly investigated and settled fairly at the earliest opportunity.

Helen Vernon, Chief Executive of NHS Resolution

The number of cases resolved continued to increase. 17,116 clinical and non-clinical claims were resolved in 2022/23 compared with 16,484 in 2021/22. The amount spent on claims in 2022/23 was £2.64 billion, compared to £2.5 billion from 2021/22.

NHS Resolution’s provision as at 31 March 2023 reduced significantly to £69.6 billion, compared to £128.6 billion in 2021/22. This is primarily due to the change in 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.

The total number of new clinical negligence claims and reported incidents across primary and secondary care reached 13,511, which was 1,567 less than the previous year. This is mainly due to the one-off take on of 2005 historic claims from the Medical Protection Society, which now come under the Existing Liabilities Scheme for General Practice (ELSGP).

Clinical claims received (CNST and CNSGP) increased by 1,019 claims, or 8.6%. The volume of non-clinical claims reported in 2022/23 is comparable to 2021/22 although remains lower than pre-pandemic levels.

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. In the Clinical Negligence Scheme for General Practice (CNSGP) there has been an expected increase in reported claims of 45.1% compared with 2021/22, which is primarily due to the time-lag between incidents occurring and claims being received for this relatively new scheme and does not reflect lower safety standards in general practice.

NHS Resolution’s Annual report and accounts 2022/23 is now available.

Notes to editors:

  1. Payments against all our clinical schemes for 2022/23 were £2.73 billion (£2.4 billion in 2020/21) in total – which comprised damages paid to claimants of £1,992 million (£1,775.3 million in 2021/23), claimant legal costs of £490.9 million (£470.9 million in 2021/22) and NHS legal costs of £158.8 million (£156.6 million in 2021/22). 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).
  2. Payments on CNST claims and scheme administration increased year-on-year by £172 million (8%), following on from a £158 million (8%) increase in 2021/22. Expenditure was within 1% of income collected from members.  The year-on-year increase in CNST spending has been driven by a £146 million (17%) increase in spending on claims valued at over £3.5 million, primarily in damages payments. A further additional £42 million (16%) was incurred in relation to the structured settlement element of PPOs.
  3. Income from members (for clinical and non-clinical schemes) for 2022/23 was £2,400.1m.
  4. 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.[1] 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.
  5. 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.
  6. 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, 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 individual claimant concerned.
  7. In 2022/23 the ‘annual cost of harm’ for CNST was £6,278 million. This is a decrease of £7,007 million compared to the previous year (in 2021/22 the cost of harm for CNST was £13,285 million). The decrease is primarily due to the change in His Majesty’s Treasury (HMT) discount rates which has had the effect of significantly reducing the value of claims. If HMT discount rate changes for 2022/23 were not applied, the equivalent cost of harm for CNST for 2022/23 would have been £12,631 million. This figure is slightly lower than the corresponding 2021/22 cost of harm figure of £13,285 million. The decrease is mainly due to a reduction in projected claims numbers for PPO claims, as well as a lower long-term claims inflation assumption for these claims.
  8. The total provision in respect of Covid-19 of £1.5 billion is estimated across all NHS Resolution schemes, which is an overall increase of £0.2 billion from last year. The provision continues to allow for clinical negligence claims resulting from the treatment of Covid-19 and vaccine administration. Broadly speaking, claim numbers received to date are towards the lower end of ranges previously considered. However, this is offset by risks and potential sources of claims from a further year of clinical activity, as well as additional potential claims arising from misdiagnosis and delay.
  9. Of the Covid-19 related clinical claims settled in 2022/23, 67% were settled without damages. Due to the fact that claims are time-lagged, we only have an early picture of the claims profile for Covid-19, and we can’t draw any conclusions at this stage as to future trends and patterns this may lead to. Under the non-clinical schemes, 64 claims were reported in 2022/23 compared with 80 in 2021/22. Of the non-clinical claims settled in 2022/23, 78% were settled without damages.
  10. Resolution (global settlement) meetings involve parties gathering to discuss, share and agree solutions to progress a claim. These meetings are convened to discuss a number of claims simultaneously, to save time and resources. ‘Stock-take’ meetings involve formal meetings with claimant lawyers at fixed stages during a claim in a collaborative approach, and have proved successful in reaching early resolution and reducing costs. Mediation is an independent, voluntary and confidential process in which a trained neutral, the mediator, helps the parties to resolve their dispute.