The annual cost of settling clinical negligence claims in the NHS has tripled over the past 20 years, reaching £3.6bn in 2024/25, according to a new report from the National Audit Office (NAO).
In 2006/7, the annual cost for settling claims was £1.1bn, when inflated to 2024/25 values. Costs are also expected to continue rising, reaching an estimated £4.1bn by 2029/30, according to NHS Resolution and the Government’s Actuary Department.
The Government’s total accumulated clinical negligence liabilities in England are now estimated to be £60bn up until 31 March 2025, compared to £14.4bn in 2006/7.
This change is due to an increase in the number of claims and the rising cost of settlements, according to the NAO.
The number of settled cases more than doubled between 2006/7 and 2016/17, from 5,625 to 11,397. Most of these claims related to hospital activity, which has remained ‘relatively stable’ since, the report added.
However, there has been an increase in claims since 2016/17, with 13,329 in 2024/25. The NAO said this was ‘largely’ due to two new indemnity schemes for general practice being introduced in 2019.
The report said: ‘Since their launch, the number of GP claims settled by NHS Resolution (NHSR) increased from 273 in 2019-20 to 2,914 in 2024-25. It will take some time for GP claims to stabilise following the schemes’ creation, and NHSR expects numbers to continue increasing.
‘An initial review of the GP scheme found that, similar to CNST [Clinical Negligence Scheme for Trusts], most new claims were triggered by delays or failures relating to diagnosis or referrals. Excluding the new general practice schemes, settled claims have reduced from the peak of 11,396 in 2016-17 to 10,415 in 2024-25.’
Increasing compensation
Alongside a higher volume of claims, the amount of compensation paid out has increased. The report said this was primarily due to a small number of high-value claims, but it also reflects the advancement of medicines and treatments and people needing more care as they live longer.
In 2024/25, high value cases with awards of £1m or more accounted for 68% of all costs, despite being only 2% of claims.
Claimants’ legal costs are also paid by the NHS in successful claims, which increased from £148m in 2006/7 to £538m in 2024/25.
The report added that around three quarters of claims settle for £25,000 or less, and the legal costs of these are almost four times the total damages awarded.
‘In 2024‑25, £143 million of the £183 million cost to settle low-value claims was for legal costs. Of this, £98 million was claimant legal costs and £45 million was NHS defence costs. Only £39 million (21%) was for damages,’ the report said.
It also suggested that the government may be paying for some claims twice, as it pays for compensation with the presumption that care will be provided by the private sector, but in some cases, this is later provided by the NHS. However, it added there was ‘no estimate’ of the extent to which claimants go on to use publicly funded health and social care.
The NAO recommended several steps for the Department of Health and Social Care (DHSC) and NHSR to help manage future risk, including:
- Build on NHSR’s existing use of analytics and AI to help provide a more comprehensive analysis of damages awarded.
- Consider whether the current approach to legal costs remains proportional given the high relative costs of low-value claims.
- Explore possibilities for greater transparency on the fees agreed between claimants and their lawyers.
- Assess whether the requirement to calculate damages based on privately funded care packages remains aligned with DHSC’s vision of a modern NHS.
- Consider incorporating performance against complaints standards into future inspection and oversight regimes as patients report finding the current processes confusing and frustrating.
Gareth Davies, head of the NAO, said: ‘Despite progress in containing the number of clinical negligence claims in some specialties, the increasing cost of the small number of very high value claims is driving higher costs for taxpayers.
‘Reducing harm to patients is clearly the best way of containing this cost. Alongside this, DHSC should consider whether the existing approach to legal costs remains proportionate for all claims, including whether alternative methods to compensate for negligent treatment could provide better outcomes for patients, with less cost overall.’
Dr Rosie Benneyworth, interim chief executive of the Health Services Safety Investigations Body (HSSIB), said the report shone an ‘important light’ on the cost of clinical negligence.
‘However, clinical negligence costs are only part of the picture,’ she added. ‘When combined with other data on patient harms it is a stark reflection on the true cost of safety incidents and failures – causing human suffering and carrying a huge financial burden. The OECD suggest this could be 13% of healthcare spend – a potential cost of £25 billion each year in England on safety failure.
‘It is vital that we look beyond the technical solutions to legal liability and focus on prioritising patient safety in a proactive way – this will reduce the costs associated with unsafe care, but first and foremost will reduce the number of recurring safety incidents, and the resulting harm to people and their families.’
