All healthcare professionals, whether in the NHS or private sector, owe a duty of care to act in the best interest of their patients. However, no individual and no system is infallible and there will be circumstances where patients and families are harmed due to negligence. In recognition of this, all regulated healthcare professionals wishing to practice in the UK are required to hold appropriate clinical negligence indemnity cover. This cover pays compensation costs and legal fees to patients in cases of proven clinical negligence. NHS hospital staff in England hold appropriate cover through their trust’s membership of the Clinical Negligence Scheme for Trusts (CNST), a state indemnity scheme administered by NHS Resolution. Since April 2019, a similar scheme operates for General Practitioners providing care within the NHS (CNSGP). Outside the scope of CNST and now CNSGP, historically cover has been provided by other indemnity providers – including medical defence organisations and insurance companies.
The government sought views on appropriate clinical cover in 2018/19, but this took on a new focus following the Paterson Inquiry report published in 2020. The inquiry highlighted two issues with clinical negligence cover in the independent sector; many indemnity providers have discretion on whether or not to cover claims made against their indemnified members, and the exclusion of criminal acts from both discretionary indemnity and insurance cover. The inquiry heard that some private patients of Mr Paterson struggled to access compensation and so were disadvantaged in comparison to NHS patients who received redress through CNST. The inquiry recommended that the current regulation of indemnity products should be reformed and that the government should introduce a nationwide safety net to ensure patients are not disadvantaged.
The government’s consultation sought views on two options:
- To leave arrangements as they currently are (thereby permitting discretionary indemnity cover to remain in the market without regulatory oversight).
- To change legislation to ensure that all healthcare professionals not covered by a state-backed indemnity scheme hold appropriate clinical cover that is subject to appropriate supervision – in the case of UK insurers by the Financial Conduct Authority and Prudential Regulation Authority.
A summary of the responses received was published in December 2022. Option two was the government’s preferred option, and the majority of the 101 respondents agreed with this, although the feedback was not unanimous.
Those who support option one cited the flexibility of discretionary schemes and that they often offer additional member benefits such as medico-legal advice which may not be offered by regulated insurance products. Some respondents, including medical defence organisations, felt that there was no need to change the current system.
Those in support of option two, highlight benefits including increased transparency for professionals and patients, a more stable market, and greater security and certainty of cover. Many respondents felt that this approach would be more costly, but that the benefits outweighed this. It is acknowledged that if the government is to proceed with option two, “appropriate” will need to be defined.
The consultation also sought views on alternative options, and responses included expanding the scope of existing state schemes, introducing a safety net support scheme for uninsured claims (similar to the Motor Insurers’ Bureau for insured driver claims), and addressing the rising costs of clinical negligence claims, including the possibility of capped legal fees.
As part of its ongoing commitments following the Paterson inquiry, the government also carried out a survey in Autumn 2022 aimed at regulated healthcare professionals whose work is not covered by state indemnity schemes. Publication of the results is expected early this year. We are also anticipating a further update on clinical negligence cover later in 2023 as the government continues to gather evidence and discuss with stakeholders. It is likely that there will be further opportunities for healthcare professionals and insurance providers to share their views and help to shape the future of indemnity coverage. Bevan Brittan is ready to assist with any advice or support you require.
If you would like to discuss this topic in more detail please contact Hannah Dell, Associate, or Tim Hodgetts, Partner.