The NHS cannot afford another missed warning on clinical negligence
Rachel Kneale, partner at law firm Weightmans, reflects on the PAC’s findings and what must happen next in order to combat the NHS’s mounting clinical negligence bill.
The Public Accounts Committee’s report on the cost of clinical negligence highlights the scale of the growing challenge for the NHS. The figures have found that the service now carries £60 billion in liabilities, with annual payouts already at £3.6 billion and forecast to exceed £4 billion by the end of the decade.
At a time when the health service is under pressure to protect frontline care, clinical negligence costs cannot simply be viewed as a legal overhead. They represent a significant financial pressure that competes directly with investment in patient services.
Managing these costs sustainably will require continued focus on prevention, alongside a clear and coordinated framework for handling claims and resolving disputes earlier.
What’s causing the cost increase?
It’s tempting to assume the rising bill reflects a surge in litigation – but this isn’t the case.
In 2006/07, NHS Resolution received 10,420 claims against England’s NHS trusts. In 2024/25, it received 11,396 – an increase of just 9% over 18 years.
But while volumes remain relatively steady, settlement size is mounting. According to the National Audit Office (NAO), the cost of settling claims has tripled in real terms since 2007, rising from £1.1 billion to £3.6 billion. Most of that increase is attributable to damages rather than defence costs.
A small number of catastrophic injury cases now shape the overall financial picture. For example, maternity claims involving severe brain injury to babies only accounting for 10% of total claims but represent around 35% of the total value of liabilities. The average settlement in such cases is £11.2 million, reflecting the cost of lifelong care.
Of course, we can’t ignore the profound human consequences of these tragic cases, but they are also financially challenging for the NHS.
Safety and stalled reform
The NHS struggles to ensure effective coordination between its various bodies and across the national system. While targeted interventions can make a difference, they often operate in isolation without a broader policy framework to support them.
NHS Resolution’s Early Notification Scheme provides one example. By requiring trusts to report certain maternity incidents earlier, it has improved the speed of investigations and provided an alternative to litigation for eligible families. Initiatives like this will be most impactful combined with wider efforts to improve maternal and neonatal safety, with the Amos Investigation and Taskforce providing an important opportunity to prioritise and focus national efforts in this area.
Without that structure, the NHS risks responding to claims after harm has occurred rather than preventing incidents in the first place.
Managing disputes earlier
Alongside prevention, there is also a strong case for strengthening how complaints and concerns are handled before they escalate into legal disputes.
Many clinical negligence claims originate in complaints processes where patients or families feel their concerns have not been addressed transparently or promptly. Improving these systems offers a practical way to reduce the number of disputes that ultimately progress to litigation.
Legal expertise has an important role to play here. Specialist healthcare law firms increasingly support NHS organisations not only in defending claims but also in improving complaints handling, investigation processes and organisational learning. At Weightmans, for example, our Remedy complaints handling service is designed to help healthcare organisations manage complaints more effectively, identify safety and learning issues earlier and reduce the risk of concerns escalating into formal claims.
The proportionality challenge
While catastrophic injury cases drive overall costs, lower-value claims expose a different inefficiency. When disputes escalate unnecessarily, legal costs can quickly outweigh the compensation awarded.
Proposals to introduce fixed recoverable costs for lower-value clinical negligence claims were intended to address this imbalance but have stalled. Revisiting these reforms, alongside stronger complaints handling and earlier dispute resolution, could help prevent smaller claims progressing into lengthy and expensive litigation.
The “double payment” dilemma
Perhaps the most politically sensitive issue concerns how damages for future care are calculated.
Under legislation dating back to 1948, compensation for future care is assessed on the assumption it will be provided privately, even where claimants may already receive NHS or publicly funded care. The courts have repeatedly upheld this principle.
The challenge is transparency. Neither DHSC nor NHS Resolution has visibility over whether claimants subsequently rely on publicly funded care, creating the potential for the state to pay twice. Any reform would likely require legislation and must protect severely injured patients, but greater clarity and safeguards against duplication are increasingly difficult to ignore.
Turning attention to action
The PAC’s report has brought renewed attention to the scale and complexity of clinical negligence costs.
The forthcoming review by David Lock KC provides an important opportunity to consider how the system can evolve, from managing legal costs in lower-value claims to reviewing the framework for future care damages. Alongside this, continued progress on patient safety, early investigation and faster dispute resolution will be essential.
Clinical negligence is more than a legal liability. With £60 billion in potential liabilities on the books, finding effective ways to prevent harm, resolve disputes earlier and manage costs sustainably will remain a key priority for the NHS.