Clinical Negligence Payouts Triple in Two Decades

The cost of settling clinical negligence claims has more than tripled over the past two decades, according to a new report from the National Audit Office (NAO). 

Annual costs rose from £1.1 billion in 2006-2007 to £3.6 billion in 2024-2025. The government’s estimated liability for future claims has quadrupled over the same period, reaching £60 billion.

The NAO said that it had repeatedly warned about the rising costs of clinical negligence, but “so far, no government has succeeded in controlling the cost.”

Few High-Value Claims Drive Most Costs

While most patient safety incidents do not result in negligence claims, the report found that costs continued to climb despite claim numbers plateauing in recent years.

This increase was largely due to a small number of high-value cases. Around 5% of settled claims exceeded £250,000 in 2024-2025, and the number of settlements over £1 million has risen sharply over the past decade. These high-value cases made up just 2% of claims by volume but accounted for 68% of total costs.

Claim volumes varied by specialty. Obstetrics cases involving cerebral palsy or brain injury (£599 million in 2024-2025) and paediatrics (£137 million) saw the largest rises in annual settled costs. Mental health (up 73%) and radiology (up 30%) had the highest percentage increases in settled claims among the six specialties for which costs increased.

In contrast, claim volumes fell across 11 specialties since 2016-2017, with notable declines in orthopaedics and general surgery.

Rising Legal Fees Add to the Burden 

The NAO said medical advances and longer life expectancy were contributing to higher compensation sums, as patients require care for longer periods.

Legal costs have also climbed sharply, particularly for claimants, whose fees the NHS must cover when claims succeed.

Claimant legal costs rose 3.6-fold, from £148 million in 2006-2007 to £538 million in 2024-2025. By comparison, NHS legal costs roughly doubled, from £76 million to £159 million.

For low-value claims, where damages were £25,000 or less, claimant legal costs were 3.7 times higher than the compensation awarded.

Steven Davies, head of legal services at the Medical Protection Society, said: “It is vital that quick steps can now be taken to introduce fixed recoverable costs in relation to legal fees, combined with the development of a comprehensive strategy that balances fair compensation for patients and affordability for the NHS and society.”

He added that with NHS finances in “such a parlous state,” it was “right to question whether the sums paid out on NHS clinical negligence claims are sustainable.” NHS Resolution’s estimate that over £60 billion is needed for future clinical negligence costs makes this one of the government’s largest liabilities, he said.

Costs Could Exceed £4 Billion a Year by 2030

NHS Resolution and the Government Actuary’s Department project that clinical negligence payments will continue to rise, and could reach £4.1 billion a year by 2029-2030.

The NAO noted that settlements were based on the assumption that claimants’ continuing care needs would be met by the private sector, but patients may continue to use publicly funded health or social care services. “There is a risk that government may be paying twice in some cases,” it said.

Gareth Davies, head of the NAO, said: “Despite progress in containing the number of clinical negligence claims in some specialties, the increasing cost of the small number of very high value claims is driving higher costs for taxpayers.”

He added that while reducing patient harm was the best way to control costs, the Department of Health and Social Care should review whether the current approach to legal fees remains proportionate.

Alternative compensation models, he said, might provide better outcomes for patients at lower overall cost.