Claims epidemic forces £185m cash injection into NHS compensation pot

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Nearly £200 million has been pumped into a pot for NHS compensation payouts, the Department of Health said.

Claims have increased in recent years due to no-win, no-fee lawyers, and the NHS Litigation Authority has been left short of cash.

Andrew Lansley, the Health Secretary, was forced to inject £185 million into the fund until April after fears money would run out.

Government figures show the maximum possible negligence payouts faced by the NHS if all cases were lost, rose from £5.31 billion in 2001 to £16.85 billion last March, The Times reported.

Annual payouts grew from £277 million in 2000-01 to nearly £1 billion in 2010-11. In the past five years, clinical negligence claims have risen from 5,697 to 8,655 per year, according to the newspaper.

The Department for Health joined the Ministry of Justice (MoJ) in support of “ambitious proposals” to clamp down on “claimant farmers”, who encourage patients to sue for negligence.

Health Minister Lord Howe said: “Following a review of claims, we have made additional funds available to the NHS Litigation Authority to make sure those claimants who are entitled to compensation receive it in a timely way.

“The Government’s ambitious proposals for reforming the civil litigation system will support the NHS in dealing with costly litigation cases. We want to strike the right balance between access to compensation claims and ensuring that costs are proportionate, sustainable and affordable.”

Tom Fothergill, financial director of the NHS Litigation Authority, told The Times no-win, no-fee lawyers had added a hefty premium to costs, as well as a legal ruling five years ago that linked the wages of claimants’ carers to earnings rather than inflation.

The Government is pressing ahead with plans to reform the civil litigation funding and costs system in England and Wales after vowing to restore common sense to the system.

The Legal Aid, Sentencing and Punishment of Offenders Bill, is currently before the Lords.