Healthcare delivery
The cost of settling clinical negligence claims soars
Now at £60 billion, the government’s liability for clinical negligence claims has increased in real terms from £14.4 billion since 2006-07 and is the second largest liability on the government balance sheet.
The annual cost of settling clinical negligence claims has soared over the past two decades, from £1.1 billion in 2006-07 to £3.6 billion in 2024-25 due to increased claim numbers and the rising costs of settlements, according to figures from the National Audit Office (NAO).1,2 NHS Resolution (NHSR) is responsible for handling clinical negligence claims against the NHS in England. The Department of Health and Social Care (DHSC) oversees NHSR and develops policy to manage the costs of clinical negligence cases. A report from NAO reveals that between 2006- 07 and 2016-17, the number of settled clinical negligence cases more than doubled, from 5,625 to 11,397. Most claims related to hospital activity, but volumes have been relatively stable since they peaked in 2016-17.3 Since 2016-17, increases in costs are due
to rising amounts of compensation paid out on claims. This is primarily due to a small number of very high-value claims.4
Reasons for
increased compensation include advancements in medicine and treatments, and people needing more care as they live for longer. In 2024-25, damages for very-high-value
claims accounted for 68% of total costs, but these claims represented only 2% of all claims by volume. The highest-value claims are typically those associated with brain injuries suffered in maternity care, which are often settled with a periodic payment schedule rather than a single lump sum. Between 2006-07 and 2024-25, the total cost
for obstetrics claims involving cerebral palsy or brain damage increased by over £1 billion in real terms. Furthermore, in 2024-25, the average compensation for obstetrics claims involving cerebral palsy or brain damage was £11.2 million (for claims settled with damages). Claimant legal costs on successful claims are
paid by the NHS. These have risen far more than the legal costs incurred by the NHS, increasing from £148 million in 2006-07 to £538 million in 2024-25. In contrast, NHS legal costs rose from £76 million in 2006-07 to £159 million in 2024-25.
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www.clinicalservicesjournal.com I February 2026 The legal costs for low-value claims (for
awards of £25,000 or less) were 3.7 times higher than the damages awarded to claimants in 2024-25. Low-value claims currently make up three quarters of all claims. Plans were made by the previous government to cap the legal costs in low-value cases, but these have not been implemented following the change of government in 2024. The NAO report says there is a risk that the government may be paying twice in some cases: first by settling a claim, and then again by paying for further treatment as patients could go on to use publicly funded health or social care services, despite the settlement being paid with the assumption that they’ll use the private sector.5 The overall number of settled claims has
reduced for the majority of medical specialties reviewed by the NAO.6
However, the cost of
clinical negligence in England appears much higher than in many other countries, as the UK offers universal healthcare, does not cap compensation, and has a more comprehensive understanding of the true cost compared to other nations.
NHS Resolution and the Government Actuary’s Department estimate that the cost of clinical negligence cases will continue to increase each year, with annual payments potentially reaching £4.1 billion by 2029-30. Since the NAO last reported in 2016-17,
NHS Resolution has worked hard to reduce the financial and emotional cost of clinical negligence by resolving claims faster and without litigation wherever possible.7
Improving the initial response to harm The NAO points out that, within existing legal structures, the DHSC, NHS England (NHSE) and NHSR each have opportunities to influence the direction of future clinical negligence costs. These include how the NHS initially responds to harm, cost control measures and working to prevent future incidents. Stakeholders told NAO that, in many cases, patients are compelled to consider legal proceedings for the answers and reassurances they seek. The 2025 Dash review also found that the current system for complaints and concerns
Vitalii Vodolazskyi -
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