£60 Billion Set Aside as NHS Faces Rising Negligence Costs

NHS negligence costs have risen sharply, with payouts reaching £3.1 billion in 2024-2025 – up 10.7% on the £2.8 billion in the previous financial year. 

The latest annual report from NHS Resolution (NHS-R) showed that more than £60 billion has been set aside to settle future potential claims in England.

Medical defence societies described the situation as unsustainable. 

Maternity Claims Drive Overall Costs

Maternity care accounted for £1.3 billion (42%) of total claims last year – the largest single contributor. This comes as maternity and neonatal services in England face a national investigation aimed at driving safety improvements.

NHS-R said improving maternity safety was a top priority, with initiatives such as its Maternity Incentive Scheme, which rewards NHS trusts demonstrating safer practices.

Most Cases Settled Without Litigation

Of the 14,428 new claims and incidents reported last year, 83% were resolved without formal legal proceedings – the highest proportion recorded to date. Dispute resolution methods included mediation, resolution meetings, and early neutral evaluation. This marked a significant increase from 66% in 2016-2017.

Because many claims are reported late and some involve multi-year payments stretching into the future, NHS-R estimated the “annual cost of harm” at up to £4.9 billion. 

“Almost £5 billion in compensation costs is currently incurred by the NHS in England each year for incidents that could be avoided”, the report noted.

A report by the House of Commons Public Accounts Committee in May this year described the £58.2 billion set aside to cover potential costs of clinical negligence events that occurred before April 2024 as “astounding” and “jaw-dropping”. 

That provision for future liabilities has since topped £60.3 billion, reflecting data from the most recent financial year.

Defence Bodies Warn of Urgent Need for Reform

Steven Davies, head of legal services at the Medical Protection Society (MPS), said the sums should be questioned, given the “parlous state” of NHS finances and the need to improve patient care and services. The figure of more than £60 billion estimated for future negligence claims represented “one of the government’s largest liabilities”, he pointed out.

Davies added: “The high cost of clinical negligence also impacts on healthcare professionals not protected through a state-backed indemnity scheme — such as private practitioners and dentists — who bear the cost of protecting themselves against claims.”

The MPS welcomed the appointment of barrister David Lock KC to advise on the cost of clinical negligence and patients’ experience of the claims process. His input will inform a government review set for this autumn. 

“A comprehensive strategy, which balances fair compensation for patients and affordability for the NHS and society, is long-overdue,” Davies said.

Legal Reform Cannot Be Delayed

Thomas Reynolds, director of policy and communications at the Medical Defence Union, described the rising costs as “extremely concerning”.

“Action must be taken to reverse this trend and ensure we are keeping as much money in the NHS as possible, where it can be used to improve patient care, support recruitment and retention, and provide better facilities for our NHS workforce,” he said.

Reynolds also said that current clinical negligence laws are “woefully out of date” and contribute to financial pressure on both the service and its workforce.

He called for urgent legal reform, adding that the government’s planned review “cannot be put off any longer”.

Dr Sheena Meredith is an established medical writer, editor, and consultant in healthcare communications, with extensive experience writing for medical professionals and the general public. She is qualified in medicine and in law and medical ethics.