The rising cost of clinical negligence claims against the NHS has become a persistent feature of policy debate. The NHS Resolution’s annual figures are frequently cited as evidence of an unsustainable compensation system, with damages and legal costs framed as diverting resources from frontline care.
In the financial year 2024/25, NHS Resolution paid out approximately £3.1 billion in clinical negligence compensation and associated legal costs, up from about £2.8 billion in 2023/24, representing a near 10% annual increase. Of that total, damages paid to Claimants were over £2.28 billion, with Claimant legal costs around £620.9 million.
This interpretation, however, risks mistaking effect for cause. Rising costs do not necessarily reflect an expansion of frivolous claims, but rather the scale of harm caused when care fails, the true cost of lifelong support, and a system that too often resolves claims slowly and defensively.
Any meaningful reforms must engage with those realities and not dilute the rights of injured patients.
Severity, not volume, drives cost
Clinical negligence litigation remains a high-threshold jurisdiction. Claims are complex and evidence-heavy. The financial weight of the system is driven overwhelmingly by a relatively small number of catastrophic cases; perinatal injuries, acquired brain damage, spinal injuries and fatal errors with dependency claims.
These cases are expensive because the consequences are permanent. Damages reflect the need for decades of professional care, specialist accommodation, therapies, loss of earnings and medical support. As medicine advances, more patients survive severe injury with complex needs. Compensation has risen because harm has become more survivable, not less profound.
Delay as a structural cost driver
Delay is not incidental; it is systemic. Late admissions of liability, prolonged investigations and a risk-averse approach to resolution inflates costs while compounding hardship for Claimants.
From a Claimant perspective, delay often means years without adequate support, rehabilitation or financial security. From a public finance perspective, it generates escalating legal costs, interest and expert fees.
Earlier engagement would reduce expenditure while delivering fairer outcomes, yet this remains inconsistently achieved.
Currently, the stance remains that even if both Breach of Duty and Causation are admitted, Claimants are then put to strict proof on Quantum. Years down the line, once Quantum evidence is disclosed, this often results in the NHS Resolution wanting to obtain their own evidence to challenge Claimants further. This adds to an already lengthy approach to settlement, adding to the reported “cost crisis”.
The economics of care and the discount rate
The truth is, rising awards reflect economic reality. Professional care costs, accommodation, equipment and therapies have increased significantly, driven by inflation and workforce pressures. Adjustments to the discount rate have sought to prevent systematic under compensation by recognising the limited investment risk Claimants can reasonably bear.
To characterise these changes as inflationary is to overlook their purpose; to ensure that compensation actually meets need.
Policy reform and the risk of misdiagnosis
Current policy discussions including proposals for fixed recoverable costs and alternative compensation models are often presented as pragmatic solutions to rising expenditure. Efficiency and proportionality are legitimate objectives. However, reform framed primarily around cost containment risks addressing the wrong problem.
Compensation is not discretionary spending. Where avoidable harm has occurred, damages are the mechanism by which the state meets its legal and ethical obligations. Restricting access to full compensation does not reduce negligence, it externalises its cost onto injured patients and their families.
The perceived tension between patient compensation and NHS sustainability is therefore misleading. Accountability and patient safety are not in conflict with sustainability, they are essential to it.
A more coherent approach to sustainability
If the objective is to reduce cost while preserving fairness, reform must be preventative rather than restrictive. A Claimant focused approach would prioritise reducing avoidable harm through learning from claims, earlier admissions of liability where negligence is clear, robust pre-action disclosure and engagement, timely interim payments and access to rehabilitation, with a cultural shift from defensiveness to resolution. This, however, is a non-exhaustive list.
These measures would reduce both human and financial cost, without eroding Claimant rights.
It is interesting that in April 2017, NHS Litigation changed its name to NHS Resolution to better reflect its work in handling and resolving negligence claim. It is somewhat ironic, as there has been little change and rising legal costs.
What does the future hold?
Rising clinical negligence costs are not evidence of excess, but a reflection of serious, avoidable harm and its lifelong consequences. Any policy response that fails to centre the injured patient risks undermining public confidence and fundamental principles of justice.
Sustainability must not be achieved by narrowing entitlement. A healthcare system that causes harm must remain accountable for repairing it, not least because doing so is essential to learning and preventing it.
It may be that the NHS Resolution need to look at taking a more pragmatic and proactive approach opposed to their current methods. Then, perhaps, the “cost crisis” that is reported may be greater addressed and reduced.
At Ramsdens Solicitors, we act for individuals and families who have suffered serious injury as a result of clinical negligence. Therefore, we understand that every claim is a patient whose life has been fundamentally altered, often facing complex medical, financial and emotional challenges.
Our clinical negligence team is experienced in handling high-value and complex claims. If you believe you have suffered from clinical negligence, contact us today on 0800 804 7450 or email [email protected].
The above article is for illustrative purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any part of the information given.
Furthermore, the information contained is accurate and up to date as of the date of publication. Readers should be aware that legislative frameworks may have been amended since the original date of publication.