News Roundup [abridged Versions Appear In The Paper Journal]

NHS faces increase of £500m in clinical negligence liability

BMJ 2002; 324 doi: (Published 27 April 2002) Cite this as: BMJ 2002;324:997
  1. Susan Mayor
  1. London

    The total liability for clinical negligence for the NHS increased to a total of £4.4bn ($6.4; €7.2bn)—an increase of £500m on the previous year—the summarised accounts for 2000-1 reported this week.

    The National Audit Office's report—NHS Summarised Accounts 2000-2001—warned that the reported total liability for clinical negligence was continuing to increase, although at a reduced rate compared with previous years.

    It suggested that a key cause of the increase was increased legal awards to fund the costs of future care for patients winning clinical negligence cases, which required a reassessment of the level of provision needed.

    The report noted: “Meeting the liabilities for clinical negligence continues to be a major challenge facing the NHS and represents a significant drain on resources away from patient care.” Each NHS trust is currently considered a separate legal entity and is therefore legally responsible for claims brought against it.

    However, the Department of Health is working to streamline the claims process and to provide central coordination for clinical negligence claim handling. The NHS Litigation Authority was set up in April 2000 and assumed responsibility for the administration of all negligence cases.

    The authority operates a risk pool—the Clinical Negligence Scheme for Trusts, in which members pay annual contributions to settle any arising claims made against them. In 2000-1, the first year of significant payments under the scheme, about £157m was paid to claimants.

    On a more positive note, the accounts showed that all primary care trusts and health authorities had met their statutory duty for net payments not to exceed their cash limits.

    All but one health authority had attained financial balance. The one exception, Bexley and Greenwich, recorded an overspend of £0.9m (0.3% of its expenditure limit) in the period leading to its merger with a neighbouring authority.

    Overall, NHS trusts were £9m within their external financing limit of £224m; seven trusts breached their individual limits by more than £10 000. The figures were based on annual accounts prepared by individual health organisations, which were then audited by auditors appointed by the Audit Commission for Local Government and the National Health Service in England and Wales.

    The summarised accounts for 2000-1 included 99 health authorities, which spent a total of around £41bn purchasing health care and related services from NHS trusts and other contractors; 40 primary care trusts, working for their first year, spending £2bn; and 356 NHS trusts, which spent £31bn.

    Analysis of financial performance judged 33 NHS trusts to be having significant financial difficulties at 31 March 2001—lower than any of the three preceding years. These trusts were required to agree recovery plans.

    The report also showed progress in countering fraud in the NHS. The NHS Counter Fraud Service reported recovering over £4m and achieved 30 successful prosecutions and 33 successful civil and disciplinary cases during 2000-1.

    By March 2001, a total of 484 cases of suspected fraud with an estimated value of £18m had been reported.

    Recent cases included a senior partner of a dispensing medical practice submitting false invoices and fabricating drugs invoices from fictitious pharmaceutical companies; a nurse submitting falsified time sheets purporting to have worked as a bank nurse for five years, and an NHS trust manager authorising timesheets in respect of four relatives who did not work for the trust.


    • NHS Summarised Accounts 2000-2001 is available at (hard copies can be obtained from the Stationery Office (tel 0845 702 3474).

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