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NHSTotal Medical Liabilities Negligence has reached £60 billion National Audit Office (NAO) has said.
This amount is attributed to the increasing number of claims, higher payouts per claim and rising legal fees, and the healthcare’s liabilities having quadrupled since 2006–07.
The estimated fee is the total amount that will be required to settle all NHS clinical negligence claims by the end of March this year, including claims not yet received for the period before that.
According to the NAO, clinical negligence is the second largest liability on the government balance sheet after nuclear decommissioning.
The NAO said that legal costs for claimants on successful claims have increased “significantly more” than those incurred by the NHS when defending itself.
Claimant legal costs are set to rise (in real terms) from £148 million in 2006–07 to £538 million in 2024–25 – that is 15 per cent of the total cost of claims settled.
Meanwhile, NHS defense costs have also increased, rising from £76 million (in real terms) in 2006–07 to £159 million in 2024–25, but falling from 7 per cent to 4 per cent of settled claims costs over the same period.
The NAO report states that legal costs for low value claims now far exceed the damages awarded to claimants.
Almost three-quarters of clinical negligence claims are settled for £25,000 or less, but these cost almost four times more than the total damages awarded.
In 2024–25, of the £183 million cost of settling low-value claims, £143 million was for legal costs, while £39 million (21 per cent) was for damages.
Looking at settled claims, the report said mental health and radiology have seen the highest percentage growth.
Meanwhile, maternity cases involving cerebral palsy or brain damage (£599 million) and pediatrics (£137 million) saw the largest increases in annual settlement costs.
Overall, damages on very high value cases (with awards of £1 million or more) account for 68 per cent of all costs, despite accounting for only 2 per cent of claims by volume.
The highest priced claims are usually for brain injury caused by poor maternal care.
Between 2006–07 and 2024–25, the total cost of maternity claims related to cerebral palsy or brain injury increased by more than £1 billion in real terms.
The report also said that, although forecasts are uncertain, it is likely that the cost to the government of clinical negligence “will continue to increase substantially”.
And when looking at annual figures, the annual cost of settling clinical negligence claims has more than tripled over the past two decades, from £1.1 billion in 2006-07 to £3.6 billion in 2024-25.
The report says improving the NHS’s response to harm complaints could reduce the number of claims and the cost of clinical negligence.
It said: “Stakeholders raised concerns about how well individual health providers enforce the duty of candor, which is a legal obligation for honesty and transparency when care goes wrong.”
The NAO also said that plans put in place by the previous government to limit legal costs in low-value cases have not been implemented.
It also explains how the government can pay twice in some cases: first by settling the claim, and then again when patients choose NHS or social care, despite the assumption that their settlement will be used for private care.
The NAO acknowledged that NHS Resolution has worked hard to resolve claims quickly and without litigation wherever possible, but said more needed to be done.
According to NAO chief Gareth Davies, reducing harm to patients is clearly the best way to control rising costs.
“Alongside this, the DHSC should consider whether the current approach to legal costs is proportionate to all claims, including whether alternative ways of compensating for negligent treatment could provide better outcomes with lower costs for patients,” he said.
A Department of Health and Social Care spokesperson said: “There has been an unacceptable increase in the costs of clinical negligence claims – billions of dollars that should have been spent on frontline services.
“From fixing our broken safety net, to recognizing the serious problems in maternity care – this government is waking up to the problem and taking decisive action for the sake of patients and taxpayers.
“Our 10-year health plan makes it clear that patient safety is the foundation of a healthy NHS and we are working to ensure we reduce the incidents that lead to claims.
“However, a large proportion of these costs are through the legal system and we have appointed legal expert David Locke Casey to advise on how to address rising legal costs and how we can improve the claims process for patients.”