The NHS is now staring down a staggering £60 billion liability for clinical negligence claims, with fresh figures from the National Audit Office (NAO) exposing the scale of the crisis – and what’s really fuelling the cost explosion.
“There has been an unacceptable rise in the cost of clinical negligence claims – billions that should have been spent on frontline services,” said a Department of Health and Social Care spokesperson.
Total NHS liabilities for medical negligence hit £60 billion
According to the NAO, this massive sum represents the amount needed to settle all clinical negligence cases up to the end of March 2025, even including those not yet submitted.
But what’s behind this ballooning figure?
- More claims are being made
- Higher payouts per case
- Soaring legal expenses – particularly on the claimant side
A significant insight? Legal costs for low-value claims often outweigh the damages themselves.
In 2024-25, £143 million out of the £183 million spent on low-value claims went directly to legal fees. Damages? Just £39 million.
And while these claims make up the majority, with three-quarters settling for £25,000 or less, they still consume a disproportionate share of the NHS budget due to legal wrangling.
The cost of clinical negligence to the NHS is now second only to nuclear decommissioning on the government’s balance sheet. That’s how serious things have become.
Defence Costs Up, But Not Like This
While the NHS has seen its own legal defence costs rise from £76 million in 2006-07 to £159 million in 2024-25, it’s still not climbing at the rate of claimant costs.
In fact, claimant legal expenses have quadrupled, now making up 15% of the total cost of settled cases.
High-Value Cases: The Real Drain?
Though they only make up around 2% of the total claim volume, cases where the payout exceeds £1 million account for a whopping 68% of total costs.
Most of these are tragic, long-term cases, including severe brain injuries in childbirth.
- £599 million went on obstetrics cases involving cerebral palsy or brain injury
- £137 million was spent on paediatric claims alone
The financial burden of these complex cases is immense, but they also highlight deep systemic issues in NHS maternity and paediatric care.
Between 2006-07 and 2024-25, obstetrics claims alone rose by over £1 billion in real terms.
Complaints, Transparency and the ‘Duty of Candour’
One of the NAO’s key suggestions? Improve how complaints are handled before they spiral into legal disputes.
There’s concern that not all NHS providers are properly adhering to the duty of candour, the legal obligation to be honest when things go wrong.
“Stakeholders raised concerns about how well individual health providers apply the duty of candour,” the report states.
Better transparency, they argue, could help reduce claim numbers and build patient trust.
Government Action: Still Too Slow?
Although a previous government had proposed capping legal fees for low-value claims, the NAO confirms that these plans have never been implemented.
And there’s another twist: the government may, in some cases, be paying twice, once to settle a claim, and then again when the patient uses NHS or social care services, even though their settlement was supposed to cover private care.
A Call for Reform
Gareth Davies, head of the NAO, said the most effective way to rein in the spiralling costs is to prevent patient harm in the first place.
“Alongside this, DHSC should consider whether the existing approach to legal costs remains proportionate for all claims…”
He also floated alternative compensation models that could improve outcomes for patients without the bloated legal price tag.
Meanwhile, NHS Resolution, the body that handles claims, has made efforts to settle disputes faster and without court cases. But according to the NAO, more radical change is needed.
The Department of Health and Social Care insists it is taking action, with legal expert David Lock KC brought in to advise on how to tackle the rising legal costs.
“Our 10-year health plan makes clear that patient safety is the bedrock of a healthy NHS,” said a department spokesperson.
But with the cost of clinical negligence claims now tripling over two decades from £1.1 billion in 2006-07 to £3.6 billion in 2024-25 the question is no longer if something must be done… but how soon?
