MPs Expose £500m NHS Legal Fee Scandal as Negligence Claims Soar
A shocking parliamentary investigation has revealed that ambulance-chasing lawyers were paid a staggering half a billion pounds from NHS budgets last year, as clinical negligence claims spiralled dramatically out of control. The damning report from the Commons Public Accounts Committee paints a troubling picture of a system where legal teams typically pocket almost four times more in fees than harmed patients receive in compensation.
Spiralling Costs Diverting Funds from Frontline Care
Costs in clinical negligence claims have risen sharply in recent years, with claimant legal fees more than tripling in real terms from £148 million in 2006/07 to £538 million in 2024/25. Alarmingly, legal fees now account for a fifth (19 per cent) of the total settled claims bill, with MPs stressing it is unacceptable that so much taxpayers' money continues to be diverted from frontline care.
The government's liability for clinical negligence has quadrupled over the past two decades to reach £60 billion in 2024/25. The PAC noted with concern that the Department of Health and Social Care has been unable to demonstrate any meaningful action to address this escalating financial burden.
Low-Value Claims Create Disproportionate Costs
Particularly concerning is the situation with lower-value claims. Cases with damages of £25,000 or less - representing around three in every four clinical negligence cases - now cost far more in legal fees than victims receive, with a cost-to-damages ratio of 3.7 to 1. New rules aimed at limiting the amount paid to lawyers in these low value claims were due to be implemented two years ago but remain frustratingly delayed.
The cross-party committee of MPs says ministers should urgently develop an alternative mechanism to speed up decisions and reduce costs in such cases. They highlight that patients often pursue costly legal action due to the lack of an effective complaints system, creating unnecessary adversarial proceedings.
Systemic Failures and Delayed Resolution
The NHS spent £3.6 billion last year settling negligence claims, with this figure likely to rise significantly to over £4 billion annually by the end of the decade. The findings paint a picture of a system overwhelmed by safety recommendations it cannot action and reveal the NHS lacks adequate systems to identify and address danger areas and repeated failings.
Disturbingly, the inquiry heard that 120 to 130 brain injury cases involving children are settled every year, but it can take an average of 11 to 12 years to resolve each claim, with legal bills accumulating substantially over this extended period.
Industry Responses and Calls for Reform
Sir Geoffrey Clifton-Brown, chair of the PAC, described the situation as a swelling accounting of profound suffering, noting that each case can represent unspeakable devastation for the victims involved. He emphasised that the rising costs of such claims are diverting resources away from frontline care badly in need of them.
Suzanne Trask from the Association of Personal Injury Lawyers highlighted that the NHS's statutory duty of candour is not adhered to across the board, leaving vulnerable injured patients in the dark about what has happened to them. She argued that greater transparency would reduce delays in patients receiving redress, thereby cutting legal costs.
Lynda Reynolds from the Society of Clinical Injury Lawyers cautioned that while rising costs are concerning, it's critical that patients - and their access to justice - remain at the heart of any policy changes. She reminded policymakers that we're talking about people's lives, from a life-changing injury or in the most tragic cases, death.
Thomas Reynolds from the Medical Defence Union stated plainly that Parliament has run out of patience with the failure of successive governments to take control of soaring clinical negligence costs. He called for concrete action to end this huge financial drain on the NHS and the public purse, adding that capping legal fees for lower value clinical negligence cases can't come soon enough.
Government Response and Ongoing Review
A spokesperson for the Department of Health and Social Care responded that in the Ten Year Health Plan, to tackle the rising costs of clinical negligence and to improve the system, we asked David Lock KC to carry out a review, so every penny can be spent on patient care. They acknowledged that there is much more to do but expressed determination to make sure the NHS is the safest in the world.
An NHS England spokesperson said its staff work incredibly hard to keep patients safe but admitted there is more to do to tackle safety issues and improve care for many families. The DHSC announced a review of clinical negligence last year and told the PAC it would not commit to making improvements until that is completed, though it cannot say when that review will conclude.
The PAC report concludes that the NHS has failed to do enough to tackle the underlying causes of patient harm, creating a vicious cycle where inadequate safety measures lead to more claims, which in turn drain resources that could improve safety. The committee has called for urgent, comprehensive reform to break this damaging pattern and ensure NHS funds are directed toward patient care rather than legal fees.
