The Medico-Legal Crisis and How to Solve It

The NHS’ liabilities for medico-legal claims now total £65bn, draining the NHS of much-needed funds and putting patients at risk by driving GPs out of practice concludes Dr Paul Goldsmith, Consultant Neurologist and policy strategist, in his report “The Medico-Legal Crisis and How to Solve It”published Friday 6 October by the Centre for Policy Studies.

The UK’s medico-legal bill is £24 per person, more than twice the US’ £9 per person despite the US’s reputation as a more litigious culture. The cost of claims in the UK is also likely to increase substantially following the drop in the discount rate from 2.5% to -0.75%, announced in February of this year. Many in the insurance industry believe that the reduction in the discount rate will result in over-compensation.

Causes for the soaring costs in the UK include:

  • The Law Reform (Personal Injuries) Act 1948 – The law covering this area is now 70 years old and does not reflect current realities.  Section 2(4)  requires the body or individual paying compensation to disregard the availability of NHS care. This means the financial award reflects the assumption it will only be used for private health care. If the claimant uses NHS care – at no cost to them – they still retain the financial award.
  • Future salaries – Financial awards take into account lost future salaries, meaning two individuals with identical deficits could receive dramatically different pay-outs.
  • No reappraisal – If a patient improves, or dies, future costs are not incurred but the pay-out stays with the patient or their family.

Dr Goldsmith puts forward 9 recommendations to bring down costs for the NHS and provide better outcomes for patients:

  1. Section 2(4) of the 1948 Act should be repealed
  2. If a patient accepts treatment on the NHS, they should also accept they will be put right in the same way as someone else with an identical injury sustained from sheer bad luck, not negligence
  3. The system should work on a No Fault compensation basis. NICE should define the appropriate, evidence-based level of care required and apply this to everyone
  4. If an individual believes NHS provision to be insufficient, they have the right to take out insurance for example, to cover loss of earnings
  5. The financial award should be paid directly from the negligent party to the responsible body purchasing future care
  6. Loss of earnings should be fixed at the National Living Wage or a multiple of salary (e.g. Australia cap at 3x)
  7. It should be made easier for patients and families to complain and make “non-complaint” observations which might contribute to improvements without triggering a bureaucratic process
  8. Savings from reform should be used to fund patient safety systems and the learning element of investigations should be improved
  9. The situation for criminal clinical and personal injuries should remain the same


  1. Dr Paul Goldsmith is a life sciences entrepreneur, policy strategist and a Consultant Neurologist. He graduated with a triple 1st from Cambridge and then a clinical scholarship from Oxford. Following general medical training, he completed a PhD in Cambridge using developmental biology systems to understand adult human disease. He has helped found and build both drug discovery and digital health companies. He is a Non-Executive Director of the Medical Defence Union which provides medico-legal cover for doctors.Dr Goldsmith is speaking in London on Friday 6 October at the PIIA International Conference 2017, the leading international event for the medical professional liability (MPL) community from around the world.
  2. “The Medico-Legal Crisis and How to Solve It” is available to download here.
  3. Dr Paul Goldsmith is available to comment and/or interview. Please contact Emma Revell at the Centre for Policy Studies on 0207 222 4488 or [email protected].
  4. The Centre for Policy Studies was founded in 1974 by Margaret Thatcher and Keith Joseph and develops and promotes policies to limit the role of the state, to encourage enterprise, and to enable the institutions of society to flourish.

Date Added: Wednesday 4th October 2017