Its chief executive hailed a “sustained collaborative approach” with the legal profession.

Overall, the amount spent on claims rose from £2.5bn to £2.64bn in the year to 31 March 2023, and the total number of claims resolved from 16,484 to 17,116.

Claimant legal costs increased by 4.2% to £491m, a similar rise to last year, and NHS defence costs by 1.4% to £159m, much lower than last year’s 3.5% jump.

NHS Resolution said the increased settlement rate, which follows the pattern of several years now – in 2016/17, 66% of claims settled without proceedings being issued – was “due to a collaborative approach seen across the legal market with some processes started during the pandemic continuing to be embraced”.

Just over half of clinical claims that settled pre-proceedings resulted in the payment of damages.

In addition to resolution meetings and mediation, NHS Resolution has recently been piloting early neutral evaluation and stock takes as other methods of dispute resolution.

The total number of new clinical negligence claims and reported incidents across primary and secondary care reached 13,511, the highest in a decade if 2021/22 is ignored, when there was a bulk migration of cases from the Medical Protection Society.

Putting that aside, NHS Resolution said there was an 8.6% increase in claims.

NHS Resolution said the the overall cost of clinical negligence “continues to rise and remains of concern”, with costs “driven primarily by damages for those who are, tragically, severely harmed” and needed provision for specialist care.

“Obstetric claims account for 13% of clinical claims reported in 2022/23 but for 64% of those claims by value, each incident leading to heartbreaking consequences for a family.

“This is why we have focused so much of our resource on addressing the causes and management of incidences of brain injury sustained at birth, which have a life-long and devastating impact.”

For lower-value clinical negligence cases, worth from £25,000 to £100,000, the average claimant legal costs awarded were £52,315, a 1.2% decrease on the previous year.

However, for clinical negligence cases worth less than £25,000, average claimant legal costs increased by 5.2% to £24,458. The government has still not announced whether it is pressing ahead with a fixed recoverable costs regime for such cases.

There were no damages paid in two-thirds of the clinical negligence claims relating to Covid that settled in 2022/23.

“Due to the fact that claims are time-lagged, we only have an early picture of the claims profile for Covid-19, and we can’t draw any conclusions at this stage as to future trends and patterns this may lead to,” the report said.

NHS Resolution’s provision for future claims as at 31 March 2023 fell “significantly” to £70bn, compared to £129bn the year before. This was “primarily due to the change in HM Treasury long-term discount rates”.

Helen Vernon, chief executive of NHS Resolution, commented: “Our collaboration with partners in the healthcare and justice sectors has helped to share knowledge and improve patient safety.

“A sustained collaborative approach within the legal market has meant a notable shift towards a more co-operative and compassionate mindset in delivering compensation.

“We will continue to explore and implement an increasing range of dispute resolution options to ensure that litigation isn’t the only choice, whilst ensuring that that claims are thoroughly investigated and settled fairly at the earliest opportunity.”