2017/18 - NHS Resolution · on a thematic review of NHS Resolution data on cerebral palsy claims...

Advise / Resolve / Learn

Annual report and accounts2017/18

HC 1251

NHS Litigation AuthorityAnnual report and accounts 2017/18

The NHS Litigation Authority is a special health authority created by statute, also known as NHS Resolution.

Presented to Parliament pursuant to Paragraph 6 of Schedule 15 of the National Health Service Act 2006.

Ordered by the House of Commons to be printed 12 July 2018.

HC 1251

Advise / Resolve / Learn

Contents

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Contents

5

Contents

Performance report 6Overview 8 Chair’s welcome 8 Chief Executive’s report 10Performance summary 13 What we do 13 Understanding our indemnity schemes 14 The year in numbers 15 The environment we work in 30 Key issues and risks 32 A going concern 34Performance analysis 35 Our strategic aims 35 Performance measures 36 Resolution 40 Managing claims fairly and effectively 40 Developing legal precedent 41 Group claims 48 Alternative dispute resolution and mediation 50 Practitioner Performance Advice 60 Primary Care Appeals 66 Intelligence and intervention 74 Maternity 74 Mental health 78 Research 79 Safety and Learning 80 Fitness for purpose 84 Sustainability 86 Finance report 90 Accountability report 98 Directors’ report 100 Statement of Accounting Officer’s responsibilities 101 Governance statement 102 Remuneration and staff report 122 Parliamentary accountability and audit report 140 The certificate and report of the Comptroller and Auditor General to the Houses of Parliament 141 Financial statements 146 Statement of comprehensive net expenditure for the year ended 31 March 2018 148 Statement of financial position as at 31 March 2018 149 Statement of cash flows for the year ended 31 March 2018 150 Statement of changes in taxpayers’ equity for the year ended 31 March 2018 151Notes to the accounts 152 Glossary 189

Performance report

Performance report

7

Performance report

8

NHS Resolution Annual report and accounts 2017/18

I said last year that we were becoming NHS Resolution. The process of accelerated evolution continued through 2017/18 and we have now become NHS Resolution, operating under one name. This is significant but more importantly it is emblematic of the progress made in the implementation of the new strategy we announced in early 2017.

We have achieved or exceeded most of the goals we set ourselves for year one and although we didn’t achieve everything we planned, this was generally due to circumstances beyond our control and/or a need to respond to new events. Further details of our progress are given in later pages but let me highlight two examples of how things are changing. In April 2017 we launched our Early Notification scheme for brain injury at birth which for some cases has already resulted in an ability to make earlier payments to the families affected where this is due, an improved ability to learn and reduced claimant legal expenses. In September 2017 we published a report

on a thematic review of NHS Resolution data on cerebral palsy claims which was well received and notable both because this was the first time we have used our data in this way and in the support from and collaboration with other parts of the health system.

September 2017 also saw the publication of the National Audit Office (NAO) study on managing the cost of clinical negligence in trusts, followed in November by the report of the Public Accounts Committee (PAC) following their evidence session on the same subject. We welcomed these reports. Both made clear that the major factors driving the increasing costs of claims were beyond our control, or indeed to a large degree beyond the control of the NHS. The NAO made several recommendations, which were largely aligned with our new strategy and where not already included have been quickly embraced. The key PAC recommendation was the need for a cross-government strategy to tackle the increasing costs, which we are keen to support and which will require a response to the PAC in September.

Given how much has been written about the increasing costs it is interesting to reflect on what has happened in the last four years, during which time our balance sheet provisions have almost trebled to £77 billion. In our main Clinical Negligence Scheme for Trusts (CNST), which accounts for 93% of the total provision, c£37 billion (over 75%) of the increase is due to changes in the HM Treasury discount rate we are required to use to value future claim payments at current values – this is a matter of measurement of future cash flows but does not impact what those cash flows will be. A further £4.5 billion results from the decrease in the personal injury discount rate (PIDR) that occurred in March 2017 and is a real increased cost to the NHS. Together these account for 86% of the total increase and neither can be controlled by the NHS. Approximately £23 billion is the estimated cost of new claims in those four years. At current prices the annual ‘cost of harm’ is now c£7–8 billion, roughly double the figure prior to 2016/17 as a result of the reduced discount rates referred to above. This was offset

Ian Dilks / Chair

Chair’s welcome

Overview

9

Performance report

by payments of c£6 billion and a number of favourable developments on future costs which have reduced our estimates of the value of future payments by approximately 20% over this period.

There is some good news in 2017/18. Clinical claim numbers have stabilised after many years of significant growth and non-clinical claim numbers continue to fall. Our expenditure on claims and associated legal costs (excluding the incremental costs of £406 million resulting from the PIDR change which last year was funded directly by the Department of Health and Social Care, DHSC) was less than we expected and collected from scheme members. We are currently working with DHSC to look at how the resulting cash reserve can best be utilised to support the health system. The positive trends we are seeing have enabled us to restrict the increase in CNST charges for 2018/19 to 1.8% (excluding PIDR), the lowest increase in many years. However we cannot be complacent. The nature of the schemes we operate means that what we are currently spending on claims reflects past events and including the impact of the

decreased PIDR is, on the basis of the way we are required to account, only around one third of the increased annual cost of harm referred to above. It is therefore inevitable that the cash cost to the system will continue to rise significantly unless there is reform of the legal environment we operate in.

Looking ahead to 2018/19, our priorities for our existing indemnity schemes remain unchanged as we enter the second year of implementation of our strategy. We have begun initial planning for the general practice indemnity scheme that we have been asked to establish and administer from April 2019. What shape this will take, particularly in the early years, has not yet been finally determined but it will represent a significant expansion of our activities and provide exciting opportunities for enhancing our capabilities to support all the schemes we operate for the benefit of scheme members. We also look forward to the government’s strategy in response to the PAC recommendations.

Our senior executive team has remained stable over the year under the leadership of our Chief Executive Helen

Vernon, which has enabled the organisation to cope admirably with all of the challenges. This included retaining the ISO 27001 information security certification we were awarded last year. We did, though, have two changes at Board level. Charlotte Moar, who brings a wealth of financial and NHS experience, joined as a non-executive director in September and took over as Chair of the Audit and Risk Committee in November. She succeeded in this role Andrew Hauser whose term of office came to an end in November, and I would like to thank Andrew for the contribution his sharp intellect brought to the Board during his term of office.

This has been a landmark year in the development of NHS Resolution, made possible by the hard work and commitment of all our people and the support of our legal panel firms. On behalf of my fellow directors I would like to thank them all for their contribution. Our Board looks forward to supporting and working with the senior management team in what will be another year of continuing change and challenge.

10


2017/18 represents not just the first year of operating under our new name but in tandem the delivery of the first year of our five-year strategy, Delivering fair resolution and learning from harm. At its core, this has meant a shift upstream for the organisation in order to influence the period prior to formal legal proceedings – sharing learning and introducing incentives to reduce risk and finding other ways to resolve disputes to keep patients and NHS staff out of litigation.

In year one of our strategy we set challenging targets to: increase the use of mediation in healthcare; reduce the number of cases going into court proceedings; and transform the way in which we responded to incidents involving brain injury at birth. Despite a somewhat slow start, we have been delighted to see the interest in mediation accelerate over the course of the year – we more than trebled our target

of 50 with 189 mediations being completed in the year, of which 75% resolved on the day or within 21 days of the mediation. Our experience so far is that providing the time and the space for patients and healthcare staff to discuss what happened can mean a better outcome all round. We intend to build on the momentum and level of interest achieved so that mediation is no longer seen as novel in healthcare.

We have long resolved approximately two thirds of the claims that we see without court proceedings. However, as the NAO highlighted in their value for money study, once claims go into court legal costs accelerate and delays can set in. Our strategy has targeted claims going unnecessarily into litigation and as a result we have been able to successfully increase the percentage of claims resolving without court proceedings to the highest level since we started to record it 12 years ago.

There will be more work to do in reducing litigation but we are encouraged that this

shift was accompanied by a reduction in claimant legal costs this year – down £31.8 million (6.4%) for the clinical scheme. Litigation and legal costs are clearly connected; however, there will be other factors influencing this trend, not least that the costs reforms brought in by LASPO1 in 2013 are starting to impact a greater cohort of settled cases. In addition, our sustained efforts to challenge claimant legal costs, where we believe them to be unjustified, led to some landmark decisions this year which will generate multi-million pound savings for the NHS. The reduction in claimant legal costs is a welcome development after years of inflation in this area.

As well as a levelling off in clinical claims numbers we have seen a small shift in the relative position of claims received by specialty, with A&E claims increasing by 1% as a proportion and orthopaedic surgery reducing by 1% (thus switching places as the first and second highest specialties respectively). However, these

Helen Vernon / Chief Executive

Chief Executive’s report

1 Legal Aid Sentencing and Punishment of Offenders Act 2012 – Legal reforms that came into force on 1 April 2013. The reforms changed, among other matters, the amount that claimant solicitors can recover from the defendant under conditional fee agreements and for after the event insurance.

11

Performance report

incoming claims can relate to incidents that occurred over a number of different years. With increasing activity across the NHS overall, and claims driven by many other factors than the prevalence of incidents, it would be premature to draw conclusions from this, although it is clearly of interest and something we wish to monitor over time.

The numbers of new non-clinical claims have fallen substantially and we continue to see the benefit of the fixed legal costs that have applied in this area since 2013. The impact of employers’ liability claims in particular goes far wider than our balance sheet figures, given the personal and financial cost of a valued member of staff being kept out of the workplace, and the lessons learned from these events often have wide application. Our mental health trust members fed back to us that as many of their claims arise under the non-clinical schemes, they would welcome more attention to this area. In response we were pleased to deliver three national events last year, which provided the opportunity for national speakers, healthcare staff,

patients and families to share their experience of incidents and their aftermath in order to inform improvement.

Our approach in relation to the thankfully rare but tragic cases of brain injury at birth has been transformed as a result of our Early Notification scheme and will provide a test-bed for the government’s proposals in relation to Rapid Resolution and Redress. We now hear about these incidents from the outset (rather than five to six years later, as had been our experience). For the first time, we have been able to admit liability and provide much-needed financial support to families when it can make a difference, within months of the birth. Our team now includes clinical staff in obstetrics and midwifery. They are working closely with trusts reporting incidents to ensure that the recommendations made in our study of Five years of cerebral palsy claims, such as transparency with the family and ensuring that investigations look at systemic factors, are being implemented in practice. Significantly reducing the time-lag between the incident and our involvement puts us in

a far better position to work with trusts and our partners to learn, both to prevent future incidents but also to improve the way in which the NHS responds to and supports the families and healthcare staff who are involved.

Elsewhere in the business, the shift upstream has seen our Primary Care Appeals2 service facing an ever more complex landscape and delivering training events for pharmacy contractors to help them submit better and more relevant information in order to minimise the burden of the process.

Our Practitioner Performance Advice3 service has embedded the link adviser model, providing us with a greater level of insight into local issues, allowing earlier support, more effectively targeted in order to support the reduction and shortening of exclusions and suspensions of practitioners. Our new Assisted Mediation and Professional Support and Remediation services are helping returns to safe and effective practice with a tailored range of actions, adding value with our expertise to local efforts.

2 Formerly the Family Health Services Appeal Unit or FHSAU. 3 Formerly the National Clinical Assessment Service or NCAS.

12


The NAO value for money study and the PAC evidence hearing that followed highlighted the complex nature of the environment that we work in. It is extremely dynamic, and working with and explaining uncertainty has become a core part of our role as our financial statements demonstrate. We have been pleased to use our expertise to inform a very active policy environment and to be increasingly working both across the health system and wider government to deliver against collective objectives. The introduction of our incentive scheme in this last year was an example of this, using the financial lever of CNST pricing for 2018/19 to drive key actions on maternity safety and we are looking

forward to reviewing the experience of that scheme to inform the future approach.

With so much going on, the need to support our staff through change so that they are equipped with the skills and resources to deliver what is needed has never been greater. In addition to a challenging workload, various developments throughout the year such as the operational and financial impact of the change to the PIDR, the need to rapidly build capacity to support Early Notification and the new requirements which will be placed on our services by General Practice Indemnity has meant stretched resources at times. We have also embarked on an ambitious programme of IT and infrastructure development,

while continuing to meet the high standards of ISO 27001 and successfully fending off a serious cyber-attack on our systems.

I want to take the opportunity to thank our partners and in particular our legal panel firms who have gone above and beyond to support delivery of our strategy, in particular in learning for safety improvement. Last but definitely not least, however, I want to recognise the hard work of our staff who have responded magnificently to the many challenges over the year and to thank them for their continued commitment to delivering the best possible service to patients and the NHS.

13

Performance report

Performance summary

The Performance summary provides an overview of the work of NHS Resolution. This includes our purpose, the key risks to achieving our objectives and a summary of activities we have undertaken over the past year to meet the four strategic aims outlined in our business plan for 2017/18. For more detailed information about how we have delivered against our aims, please refer to the ‘Performance analysis’ section.

What we do

Our purpose is to provide expertise to the NHS to resolve concerns fairly, share learning for improvement and preserve resources for patient care. Following our change in operating name to NHS Resolution last year, coinciding with the launch of our five-year strategy, we have also started the process of renaming our core services to better reflect the work undertaken in these areas and to further reinforce that we deliver these services within a strategic framework.

We provide the following core services to our customers:

• Claims Management delivers expertise in handling both clinical and non-clinical claims to members of our indemnity schemes.

• Practitioner Performance Advice (formerly the National Clinical Assessment Service or NCAS) provides advice, support and interventions in relation to concerns about the individual performance of doctors, dentists and pharmacists.

• Primary Care Appeals (formerly the Family Health Services Appeal Unit or FHSAU) offers an impartial tribunal service for the fair handling of primary care contracting disputes.

These teams are supported by the following:

• The Finance and Corporate Planning directorate provides finance, human resources/ organisational development, corporate governance and business development expertise.

• The IT and Facilities team enables the organisation to deliver its services effectively through the provision of a secure infrastructure.

• The Membership and Stakeholder Engagement team works at a corporate level to improve our customer-focused approach to delivery.

• The Safety and Learning service supports members of our indemnity schemes to better understand their claims risk profiles, to target their safety activity while sharing learning across the system.

14


Understanding our indemnity schemes

The bulk of our workload is handling negligence claims on behalf of the members of our indemnity schemes: NHS organisations and independent sector providers of NHS care in England.

The four clinical negligence schemes we manage are:

• Clinical Negligence Scheme for Trusts (CNST), which covers clinical negligence claims for incidents occurring on or after 1 April 1995.

• Existing Liabilities Scheme (ELS) is centrally funded by DHSC and covers clinical negligence claims against NHS organisations for incidents occurring before 1 April 1995.

• Ex-Regional Health Authority Scheme (Ex-RHAS) is a relatively small scheme, centrally funded by DHSC, covering clinical negligence claims against former Regional Health Authorities abolished in 1996.

• DHSC clinical covers clinical negligence liabilities that have transferred to the Secretary of State for Health and Social Care following the abolition of any relevant health bodies.

We also manage two non-clinical schemes under the heading of the Risk Pooling Schemes for Trusts (RPST):

• Property Expenses Scheme (PES) which covers ‘first party’ losses such as property damage and theft, for incidents on or after 1 April 1999.

• Liabilities to Third Parties Scheme (LTPS) which covers non-clinical claims such as public and employers’ liability.

In addition we manage one other non-clinical scheme:

• DHSC non-clinical – which covers non-clinical negligence liabilities that have transferred to the Secretary of State for Health and Social Care following the abolition of any relevant health bodies.

In this document where we reference clinical negligence data, unless stated otherwise, we are referring to an amalgamation of data relating to all four of our clinical negligence schemes.

15

Performance report

The year in numbers

Table 1: A financial overview4

2016/17 (£ million)

2017/18 (£ million)

Change (£ million)

Funding for clinical schemes

Income from members 1,655.4 1,953.6 298.2

Funding from DHSC (budget) 130.0 522.5 392.5

Total funding 1,785.4 2,476.1 690.7

Payments in respect of clinical schemes

Damages payments to claimants – excluding PIDR 1,083.0 1,228.0 145.0

Damages payments to claimants – PIDR 0 404.0 404.0

Claimant legal costs 498.5 466.6 (31.8)

Defence legal costs 125.7 128.9 3.2

Total payments 1,707.2 2,227.5 520.4

Funding for non-clinical schemes

Income from members 58.8 53.2 (5.5)

Funding from DHSC (budget) 9.0 10.5 1.5

Total funding 67.8 63.7 (4.0)

Payments in respect of non-clinical schemes

Damages payments to claimants – excluding PIDR 30.7 28.9 (1.8)

Damages payments to claimants – PIDR 0 2.3 2.3

Claimant legal costs 19.7 19.6 (0.2)

Defence legal costs 7.1 6.9 (0.2)

Total payments 57.5 57.6 0.1

NHS Resolution administration of schemes

Clinical 10.4 12.1 1.7

Non-clinical 3.5 3.9 0.4

NHS Resolution other activities

Income 1.4 1.3 (0.1)

Expenditure 6.4 6.9 0.5

Sign up to Safety 0.2 0.0 (0.2)

Staff numbers 236 265 29

Cost of new claims provisions

New claims provisions 10,499 13,723 3,224

Total provisions at year end 64,998 76,988 11,990

18%

38.7%

301.9%

30.5%

16.7%

0.2%

16.5%

12%

12.3%

30.7%

18.4%

8.2%

N/A

N/A

13.4%

2.5%

6.4%

9.4%

5.9%

5.9%

0.8%

3.5%

6.4%

100%

4 Main figures may vary by up to £0.1m due to rounding.

16


Key headlines

Clinical costs

• The PIDR change from 2.5% to minus 0.75% added £404 million (33%) to the cost of damages settlements in 2017/18. This additional cost was funded directly by DHSC.

• The cost of damages excluding the effect of PIDR rose by £145 million (13.4%), which was a lower rate of increase than expected.

• Claimant legal costs also fell for the first time in recent years, by £31.8 million (6.4%).

In 2017/18 we have received 10,673 new clinical negligence claims, compared to 10,686 in 2016/17. This suggests a plateauing following a surge in the numbers prior to a change in funding arrangements following the Legal Aid Sentencing and Punishment of Offenders Act 2012.

Non-clinical costs

• Damages (excluding the PIDR effect) and legal costs all reduced by £2.2 million (3.8%) in total.

• The PIDR change added £2.3 million (8%) to damages costs in 2017/18.

The number of new non-clinical claims, typically employers’ and public liability claims, fell from 4,082 received in 2016/17 to 3,570 in 2017/18, a substantial decrease of 13%. For 2017/18 the proportion of the claims closed without the payment of damages remains at 45% for both clinical and non-clinical claims.

To better contextualise the number of claims received in-year, it is useful to broadly consider the activity undertaken by the NHS. With the caveat in mind that claims received in-year include claims relating to incidents that have

occurred in previous years, data supplied to NHS Resolution by NHS Digital show that the activity undertaken (inpatient and outpatient finished consultant episodes, A&E attendances and ambulance journeys) have steadily increased from close to 110 million to in excess of 131 million ‘episodes’ between 2013/14 and 2016/17. This is an increase in activity of c20 million or 19% over the period. Thus, whilst the numbers of new clinical claims have remained comparatively stable over recent years, it is clear to see that activity is increasing year-on-year, especially when you consider this data excludes births and activity undertaken by the independent sector.

Liabilities arising from claims have increased by £11.99 billion – a fuller explanation of the drivers underlying this change can be found in the Finance report on page 90.

Staffing levels and administration costs have increased. The average number of full-time equivalent (FTE) staff in post has grown by over 12%, up from 236 in 2016/17 to 265 in 2017/18. This is in line with the plans set out in our five-year strategy to increase capacity and capability in our Claims Management service and undertake work outlined in our strategy to address the costs of clinical negligence, such as the development of our Early Notification scheme.

The number of new referrals received in relation to the performance of doctors, dentists and pharmacists within the NHS remained broadly consistent, with 919 new requests for advice compared to 925 in the previous year. In addition, we received 170 appeals in accordance with the Pharmacy Regulations compared to 250 in the last financial year.

17

Performance report

Figure 1: The value of payments (damages, claimant and defence costs) across all indemnity schemes for 2017/18 – to demonstrate the relative size of the schemes (including adjustment for the change in PIDR)

Clinical negligence Value £m

CNST 2,058.7

ELS 56.1

Ex-RHA 2.3

DH Clinical 110.4

Total 2,227.5

Non-clinical negligence

LTPS 45.6

DH Non-clinical 5.5

PES 6.5

Total 57.6

Total value of payments £2,285.2m

Non-clinical negligence

Total value of payments £2,285.1m

18


The majority of claims we receive (69.6%, up from 67.8% the previous year) are resolved without formal court proceedings and, in these early stages, more claims are resolved without payment of damages than with payment of damages. Just under one third of claims end up in litigation with fewer than 1% going to a full trial (where most end in judgment in favour of

the NHS). Claims resolved without the need for formal court proceedings are managed by our in-house teams. The overwhelming majority were resolved by negotiation in correspondence, in meetings between the parties, or using some form of alternative dispute resolution, including formal mediation.

Settled claims

Figure 2: How 16,338 claims were settled5 in 2017/18

5 This figure refers to settled claims, not closed claims, and therefore includes claims that have been agreed with ongoing periodical payment orders. Settled claims will also include claims where damages have been agreed or successfully defended, and costs have not yet been agreed. This data is a different cohort to closed claims reported elsewhere in this document as they may fall in different years.

30.3% (4.951)

39.3% (6,417)

69.6%

No proceedings

5.8% (944)

23.9% (3,902)

29.7%

Proceedings

0.3% (44)

0.5% (80)

0.8%

Trial

Damages – 54.5% (8,897) No damages – 45.5% (7,441)

19

Performance report

Figure 3: The total number of clinical and non-clinical claims closed with and without the payment of damages from 2010/11 to 2017/18

The number of claims closed in 2017/18 was 16,701, a decrease of 501 on the previous year. This figure includes claims closed without a payment of damages.

Overall figures for closed claims, referrals and appeals

In 2017/18, we closed 16,701 clinical and non-clinical claims brought against the NHS in England compared to 17,202 in 2016/17 – these figures include claims closed both with and without the payment of damages.

Closure year

0

Nu

mb

er o

f cl

aim

s

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

20,000

15,000

10,000

5,000

12,584

14,171 14,23215,384

16,459 16,45917,202 16,701

Clinical and non-clinical claims received

The number of new clinical negligence claims reported in 2017/18 was 10,6736 compared to 10,686 received in 2016/17, a reduction of just 13 claims (0.12%). The total payments relating to our clinical schemes increased by £520.4 million (30%), from £1,707.2 million to £2,227.5 million (inclusive of the increase due to the change in the PIDR).

Despite the small decrease in the number, damages paid to patients rose significantly from £1,083.0 million to £1,632.0 million, an increase of 50%. In part, this is due to the fact that payments represent claims notified in previous years. However £404 million of this additional expenditure is as a consequence of the reduction in the PIDR on 20 March 2017, and represents 18% of the total value of payments made in 2017/18 of £2,227.5 million.

6 Excluding incidents notified under the new Early Notification scheme for obstetric brain injury.

20


Figure 4: The number of new clinical and non-clinical claims reported in each financial year from 2010/11 to 2017/18

Over the past four financial years the numbers of new clinical and non-clinical claims reported in-year has reduced from a peak in 2013/14.

In a change to previous years, in 2017/18 we received the majority of claims by number from the Casualty/A&E specialty (a historic term for Emergency medicine) rather than orthopaedic surgery. The trajectory of the number of new claims from both specialties had been trending downward over the last five years. However, in 2017/18 we received 1,395 new Casualty/A&E claims, which is an increase of 88 claims (7%) on the previous year. Over the same period we received

1,281 new orthopaedic surgery claims. These incoming claims can relate to incidents that occurred over a number of different years. The overall downward trend is very encouraging, especially in orthopaedic surgery, where the number of new clinical claims has reduced by 26% (from 1,736 to 1,281) over the past five years.

We also received 416 notifications of qualifying obstetric incidents via our Early Notification scheme in 2017/18.

Notification year

0

Nu

mb

er o

f n

ew c

laim

s

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

14,000

10,000

12,000

8,000

4,000

6,000

2,000

8,655

4,346

9,143

4,618

10,129

4,632

11,945

4,802

11,497

4,806

10,965

4,172

10,686 10,673

4,0823,570

Clinical Non-clinical

21

Performance report

Figure 5: Clinical negligence payments including interim payments 2016/17 and 2017/18 (including PIDR)

Figure 6: Payments on clinical claims by financial year from 2012/13 to 2017/18 for our CNST, ELS and Ex-RHA, and DHSC clinical schemes (including that attributable to the change in the PIDR)

Legal costs have reduced for clinical negligence claims, while damages have increased both in absolute terms and as a proportion of payments made.

Payments across all our clinical schemes have increased to varying degrees from 2016/17 to 2017/18, with percentage increases of 30.6%, 10.2% and 88.4% for our CNST, Existing Liabilities & Ex-Regional Health Authorities Scheme and DHSC clinical scheme, respectively.

Financial year

0

Paym

ents

(£m

)

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

2,500.0

1,000.0

2,000.0

1,500.0

500.0

Clinical Negligence Scheme for Trusts

DHSC clinical scheme

Existing Liabilities & Ex-Regional Health Authorities scheme

1,117.7

141.2106.2 97.5 82.5 100.2 110.4

1,051.21,044.4

1,378.2

1,575.9

2058.7

35.1 27.7 27.7 31.0 58.4

Defence legal costs

Claimant legal costs

Damages – effect of PIDR change

Damages paid to claimants

0

Clin

ical

neg

ligen

ce p

aym

ents

(£m

)

2016/17 2017/18

2,500.0

2,000.0

1,000.0

1,500.0

500.0

Total = £1,707.2m

Total = £2,227.5m

1,083.0 (64%)

498.5 (29%)

125.7 (7%)

1,228.0 (55%)

404.0 (18%)

466.6 (21%)

128.9 (6%)

22


Figure 7: The number of CNST and DHSC legacy clinical negligence cases received by damages range in each financial year from 2013/14 to 2017/18

While the majority of claims received continue to be in the £25,001–£50,000 damages tranche, the numbers reported in that tranche and in the £10,001–£25,000 tranche also increased substantially in 2017/18, back up to the levels reporting in previous years with a corresponding drop in the numbers reported in the £50,001–£100,000 tranche.

103

103

104

£2,0

00,0

01+

£1,0

00,0

01 -

£2,0

00,0

00

£250

,001

-

£1,0

00,0

00

£100

,001

-

£250

,000

£50,

001

-

£100

,000

£25,

001

-

£50,

000

£10,

001

-

£25,

000£1

-

£10,

000N

il

1,25

51,

517

1,47

51,

347

1,42

41,

245

1,53

5

1,84

2

1,26

8

895

710

148

354

2,62

0

1,74

62,

056

2,03

91,

817

1,57

3

2,29

3 2,44

62,

018

1,90

91,

344

1,66

02,

571 2

,732

2,67

81,

997

1,14

91,

180

1,10

21,

148

1,85

0

981

1,00

41,

081

938

926

619 7

4063

4

96

678

911

186 24

423

325

527

3 374

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

0

Nu

mb

er o

f cl

aim

s

3,000

2,500

2,000

1,000

1,500

500

Estimated damages

23

Performance report

The projected expenditure, excluding PIDR for CNST in 2018/19 is £1.984 billion representing a 1.8% increase in contributions from NHS providers compared to 2017/18.

Claims for seriously injured patients, such as those who suffer brain damage at birth, are usually paid as a lump sum up-front together with annual payments for the rest of that person’s life. This means both that the claimant is financially secure and that money which would otherwise be paid out in advance is retained for patient care until it is actually needed. At this time, more cases are being committed to such a payment regime than are leaving (when patients sadly reach the end of their life). Consequently the costs and charges to our members

of these claims will continue to increase for years, probably decades to come.

2017/18 was the first year of our five-year strategy, aimed in part at addressing the escalating cost of claims. We continue to work to improve the resolution of claims, striking the balance of avoiding unnecessary court costs while continuing to defend claims where there was no negligence and challenging inappropriate legal costs where we encounter them. We have also taken steps to use what we know about the causes of incidents to prevent the same thing happening again.

A key area of focus is maternity claims. In addition to the devastating effect on families, they represent one of the significant drivers of

cost. Despite obstetrics claims representing only 10% of clinical claims by number in 2017/18, they accounted for 48% of the total value of new claims reported; this is a slight drop from 50% in the previous year. In order to help organisations handling these tragic cases and the families involved our early notification scheme was launched on 1 April 2017. This has now been running for a full year and we report in more detail on this scheme later in the section of our report focusing on developments in maternity. Our staff managing the scheme are working, alongside others, to improve the handling of these incidents and identify and share learning much earlier in the process.

24


Figure 8: The number of clinical negligence claims received in 2017/18 by specialty across all clinical negligence7

Casualty/A&E

Orthopaedic surgery

Obstetrics

General surgery

Gynaecology

General medicine

Radiology

Urology

Psychiatry/Mental health

Gastroenterology

Other (aggregated specialties)

34%

13%

12%

10%

9%

5%5%4%3%

3%

3%

Total number of clinical claims 10,673

7 In this figure the percentages add up to 101% due to rounding – Casualty/A&E is a historic coding description for the Emergency medicine specialty.

In a change to previous years, the greatest number of claims received across all our clinical negligence schemes relate to the Casualty/A&E specialty rather than orthopaedic surgery.

25

Performance report

Figure 9: Value of clinical negligence claims received in 2017/18 by specialty across all clinical negligence schemes

Obstetrics

Casualty/A&E

Paediatrics

Orthopaedic surgery

Neurosurgery

General surgery

General medicine

Radiology

Gynaecology

Psychiatry/Mental health

Other (aggregated specialties)

17%

48%

9%

8%

4%

3%

3%

2%

2%

2%

2%

Total value of clinical claims received £4,513.2m

As in previous years, the greatest value of claims received across all our clinical negligence schemes relate to the obstetrics specialty.

26


For the first time in eight years we have seen a slight reduction across both our clinical and non-clinical schemes in the number of claims resolved without the payment of damages in absolute terms. However, for 2016/17 and 2017/18 the proportion of the claims closed without the payment of damages remains at 45% due to a slight fall in the number of claims closed overall.

Figure 10: The number of cases resolved without the payment of damages in each financial year from 2004/05 to 2017/18 across all schemes

Closure year

We continue to receive and defend a high number of claims that are closed without a payment of damages. For clinical claims we closed 5,166 in 2017/18 compared to 5,252 in 2016/17 without the payment of damages. For non-clinical claims we closed 2,515 in 2017/18 compared with 2,618 in 2016/17.

0

Nu

mb

er o

f cl

aim

s

6,000

5,000

4,000

3,000

2,000

1,000

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

2015

/16

2017

/18

2016

/17

4,643

3,5413,330

3,054

2,523 2,6572,922

3,175

3,680

4,524

4,959 4,9835,252 5,166

2,5152,596

2,1981,8841,8601,836

1,3321,4091,726

2,008

1,286

1,951

2,6182,796

Clinical Non-clinical

27

Performance report

In 2017/18 costs for claimant and defence costs have decreased in comparison to the previous year. Although the underlying cost of damages to claimants has also reduced, the effect of the change in PIDR has been to increase overall damages costs.

Figure 11: Non-clinical negligence payments including interim payments 2016/17 and 2017/18 (including PIDR)

Total = £57.5m Total = £57.6m

30.7 (54%) 28.9 (50%)

19.7 (34%) 19.6 (34%)

2.3 (4%)

7.1 (12%) 6.8 (12%)

0.0

No

n-c

linic

al n

eglig

ence

pay

men

ts (

£m)

2016/17 2017/18

70.0

50.0

60.0

40.0

20.0

30.0

10.0

Defence legal costs

Claimant legal costs

Damages - effect of PIDR change

Damages paid to claimants

The number of new non-clinical claims, typically employers’ and public liability claims, fell from 4,082 received in 2016/17 to 3,570 in 2017/18, a substantial decrease of 13%. Damages decreased by 3% from £30.7 million to £28.9 million; however, the total payments relating to our non-clinical schemes increased slightly by £0.2 million (0.3%, from £57.5 million to £57.6 million)

due to the increase in costs attributable to the change in the PIDR. The proportion of cost for claimant legal costs and defence costs remains at 34% and 12% respectively.

The continued reduction in new claims is attributed to the introduction of fixed recoverable costs for employers’ and public liability claims in 2013.

28

NHS Resolution Annual report and accounts 2017/18 Performance report

Figure 12: Payments on non-clinical claims by financial year from 2012/13 to 2017/18 for LTPS, PES and DHSC non-clinical schemes (including PIDR)

Financial year

0.0

Paym

ents

(£m

)

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

50.0

20.0

40.0

30.0

10.0

Liabilities to Third Parties Scheme

DH Non-clinical scheme

Property Expenses Scheme

7.59.4

11.1

5.3 5.5

46.9

40.2 41.244.6 43.6

45.6

3.7 3.9 2.8 3.6

8.6 6.5

The number of non-clinical claims received in 2017/18 has gone down compared to 2016/17; however, spend on both our Liabilities to Third Parties and DHSC non-clinical schemes has increased, with only the Property Expenses Scheme showing a reduced expenditure.

The numbers of both clinical and non-clinical claims received across all our indemnity schemes in 2017/18 have fallen. The costs of claims and the corresponding provisions calculated to meet these rising costs into the future continues to rise, except for the payments associated with our Property Expenses Scheme, which have fallen in 2017/18.


8 ‘Other’ is a recognised injury code and is different from ‘Other (aggregated injuries)’ which is the total of other coded injuries that are not in the top ten injury types.

29

Performance report

Figure 13: Number of non-clinical claims (LTPS & DHSC Liabilities only) received in 2017/18 by injury8

Orthopaedic injuries

Psychiatric damage

Head injuries

Facial injuries

Injuries to internal organs

Burns

Other

Damage

Injuries affecting the senses

Sickness/Disease

Other (aggregated injuries)

6%

2%2%

72%

5%

8%

1%1%1%

1%1%

Total number of non-clinical claims 3,517

Figure 14: Value of non-clinical claims (LTPS & DHSC Liabilities only) received in 2017/18 by injury8

Orthopaedic injuries

Psychiatric damage

Head injuries

Injuries to internal organs

Facial injuries

Damage

Injuries affecting the senses

Other

Burns

Sickness/Disease

Other (aggregated injuries)

7%

4%

58%

5%

20%

Total value of non-clinical claims

received £61m

1%1%1%

1%1%

2%

The highest value and number of non-clinical claims fall under the category of orthopaedic injuries, resulting from slips, trips and falls.

30

NHS Resolution Annual report and accounts 2017/18 Performance report

The environment we work in

Our total provisions for all of our indemnity schemes continue to rise from £65 billion last year to £77 billion at 31 March 2018. This represents the estimated value of claims in respect of incidents up to that date that we have either received or expect to receive in the future (in the unlikely event these costs were to be met at that point, rather than paid as planned over many decades). The unsustainable increase in costs has understandably brought about greater scrutiny, by government and others in the health and justice sectors, of the costs of clinical negligence. We welcomed the examination of the costs of clinical negligence in NHS trusts during 2017/18 by the National Audit Office (NAO) and the Public Accounts Committee (PAC).

The NAO report Managing the cost of clinical negligence in trusts, published on 7 September 2017, examined “what is causing the rising costs of clinical negligence claims” and “whether NHS Resolution and the Department are taking effective action to understand and control the costs and are working effectively with other bodies to reduce the need for future claims”. There are three recommendations that impact NHS Resolution directly, which we are pleased align with our five-year strategy. The NAO found that we have taken effective action to control costs and have achieved significant savings for the taxpayer from contesting unmeritorious or excessive claims and legal charges. Between 2006/07 and 2016/17 our average operational cost per claim reduced from £721 to £414 and operational costs as a proportion of total spending on all clinical negligence claims also reduced from 1.7% to just over 0.6% during this

period. (NAO analysis of NHS Resolution operational cost, page 41.) Having examined the influence of damages and legal costs on the cost of clinical negligence claims, they determined that the rise in cost for high value claims (above £250,000) was mainly due to the value of the damages awarded, while the rise in costs for lower value claims (below £25,000) was mainly due to a rise in legal costs. (NAO analysis of the influence of damages and legal costs on the cost of clinical negligence claims, page 27.)

The subsequent Public Accounts Committee report, published on 1 December 2017, made a number of recommendations and emphasised that tackling the costs of clinical negligence requires far-reaching cross-government action. Recommendations included for example that, with the Ministry of Justice and DHSC we continue to focus on actions to reduce patient harm, in particular harm to maternity

patients, and working with NHS Improvement and trusts to explore the use of consistent classification across incidents, complaints and claims data. We are informing an increasingly active policy environment and continue to work with DHSC, HM Treasury and the Ministry of Justice in the development of the cross-government strategy on the costs of clinical negligence. We also share an objective with NHS Improvement to achieve reduced levels of harm through increased reporting and learning from errors.

Rapid Resolution and Redress

Following the government consultation of 2 March 2017 into Rapid Resolution and Redress, its proposed scheme to provide support to families caring for children with severe brain injury caused by avoidable harm, a response was published in November 20179 with the aim that Rapid Resolution and Redress will be

https://www.nao.org.uk/report/managing-the-costs-of-clinical-negligence-in-trusts/https://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/inquiries/parliament-2017/cost-clinical-negligence-trusts-17-19/


31

Performance report

operational from April 2019. We continue to advise DHSC on areas within our expertise.

Fixed Recoverable Costs

Responses to the DHSC’s consultation launched on 30 January 2017 on the possible introduction of Fixed Recoverable Costs (FRC) for lower value clinical negligence claims were sought by early May 2017. The government’s preferred option was to mandate FRC for claims valued between £1,000 and £25,000 – costs are not normally recoverable in personal injury cases below £1,000. NHS Resolution had advised DHSC on the consultation and supplied much of the published data. The formal government follow-up to the consultation was published on 15 February 2018. In the interim Sir Rupert Jackson, a senior judge in the Court of Appeal, had issued a report in July 2017 recommending the extension of FRC across all types of civil litigation where the concept does not currently apply. For clinical negligence cases he recommended FRC for cases up to £25,000, subject to the proviso that there be a simplified process and a matrix of applicable fees to contain costs, with details of both to be agreed by a working party involving both claimant and defendant representatives. He also suggested an intermediate track for cases between

£25,000 and £100,000, to which a higher level of FRC would apply, but concluded that relatively few clinical negligence cases would fall into it owing to issues of complexity.

Unsurprisingly the consultation produced polarised views. The government response stated that it was considering all of Sir Rupert’s proposals and in tandem agreed that a working party should be established to develop a bespoke process for lower value clinical negligence claims and a costs matrix. We are pleased to have been invited to participate in the group. It is expected that the group will publish recommendations in December 2018.

Personal Injury Discount Rate

The reduction of this rate from 2.5% to minus 0.75% on 20 March 2017 resulted in very significant increases to the value of claims entailing any element of future loss, especially if there is a long life expectancy. On 7 September 2017 the Ministry of Justice published a response to its consultation on how the rate might be set in future, concluding that a fairer and better framework should be established. Following a report by the Justice Select Committee on 1 December 2017, the government published a Civil Liability Bill on 21 March 2018,

including a number of important changes such as: the establishment of a committee of experts to advise the Lord Chancellor on the appropriate rate; reviews at least every three years; and basing the rate more closely on the returns claimants actually obtain on their investments as opposed to return received on Index-Linked Government Stock, which is the current position.

As subject matter experts for indemnity and compensation in the NHS we expect to be heavily involved in, and look forward to, supporting these three strands of work.

General practice indemnity

In October 2017, the Government announced an intention to deliver a more stable and affordable system for primary care indemnity via a state-backed indemnity scheme for general practice. On 30 November 2017 DHSC confirmed that we will be administrators of the scheme. The model for scheme operation has yet to be determined, but we are supporting DHSC and others in the design of the arrangements for the proposed general practice indemnity scheme, as well as putting the resources in place for NHS Resolution to establish and administer the scheme with effect from April 2019.

9 www.gov.uk/government/consultations/rapid-resolution-and-redress-scheme-for-severe-birth-injury

http://

32


Key issues and risks

Financial sustainability

Clinical negligence costs continue to rise and add to the pressures facing the NHS. The headline increase in the payments in respect of settling all claims of £520 million includes £404 million due to the change in the personal injury discount rate (PIDR) from 2.5% to minus 0.75% which was announced in March 2017 by the Lord Chancellor. The total liabilities arising from claims have also increased significantly by £12 billion, with £15.6 billion relating to the change in the long-term HM Treasury discount rate from minus 0.8% to minus 1.56%, offset by a reduction in inflation and other assumptions from analysis of trends in our data.

The chart on page 90 quantifying the effect of various factors on the provision

over the last financial year shows that there are some positive trends evident in the claims environment. However, these only serve to slow the underlying rate of growth in the cost of claims, rather than reverse the upward trend.

Legal and policy environment

The policy developments previously mentioned, such as Rapid Resolution and Redress, FRC, the arrangements for setting the PIDR in future, the PAC recommendation for the cross-government strategy to tackle rising clinical negligence costs, and the administration of a state-backed scheme for general practice indemnity potentially affect our sphere of operations. All of these initiatives will draw upon our expert knowledge and potentially have a significant impact upon our operations, alongside our efforts to

deliver the ambitions set out in our five-year strategy Fair resolution and learning from harm, published in April 2017. A key risk for us is our capacity to deliver on such a broad range of demanding fronts at once. We recognised these challenges early on in our business plan round for 2018/19 and have been developing a workforce and organisation development strategy, targeting specific areas for skills development and recruitment to support our experienced staff in delivering this agenda while maintaining operational effectiveness. It also creates a high degree of uncertainty around the factors affecting the cost of settling claims in the shorter term and the value of the long-term liabilities arising from negligence, which is described later in this report.

http://

33

Performance report

Cyber and data protection

During the financial year, although we were unaffected by the WannaCry attack, we were targeted and successfully prevented a serious attack on our systems. Our data security was not compromised, but normal business was temporarily interrupted while action was taken to further protect our data and systems. We continuously review developments in the cyber environment and our security arrangements to meet emergent risks.

The expectations in relation to use of our claims data and experience remain rightly high, particularly in the context of policy development. Our internal governance arrangements, the embedding of data security awareness through training and implementation

of business practices to ISO 27001 standards, and our engagement with other parties over use of data to ensure compliance with legislation, mitigate against inappropriate use of potentially sensitive information.

New models of care – indemnity cover

We are continuing to monitor developments arising from new organisational forms of healthcare delivery to ensure that our member-funded schemes continue to offer complete indemnity cover. We have also undertaken a review over the last year of our experience of providing cover under the CNST scheme to independent sector providers of NHS care. Our review has highlighted that this is a much more dynamic environment, and we must remain vigilant in ensuring that the contracts independent sector providers

are seeking cover for are within the scope of CNST.

We have also identified some risk for NHS commissioners in relation to their due diligence arrangements in respect of potential gaps in indemnity cover for prospective providers, and are engaging with NHS England on the subject.

An independent inquiry has been established to examine the issues raised by the malpractice of disgraced surgeon Ian Paterson with the aim of learning lessons from the case and determining how these may lead to improvements in healthcare and safety across the country.

34


A going concern

The NHS Resolution Board has reviewed the financial position of the organisation and discussed future funding arrangements with DHSC, given that NHS Resolution reports significant net liabilities. The indemnity schemes that NHS Resolution operates are funded on a ‘pay-as-you-go basis’ – members collectively contribute sufficient funds to meet the liabilities required to be met on a yearly basis rather than holding reserves for future settlements. There is a reasonable expectation that the government, via DHSC and the NHS, will continue to fund future liabilities.

On 27 February 2017 the Lord Chancellor announced a change to the PIDR from 2.5% to minus 0.75%, effective from 20 March 2017. The government recognises that there will be a significant impact on public finances, and therefore has added around £1.2 billion a year to the budget reserve to meet the expected costs to the public sector, in particular to NHS Resolution. The change resulted in additional costs during 2017/18, which were funded from this reserve. DHSC has confirmed that it will continue to provide support to NHS Resolution to meet the additional costs in settling claims arising from the current PIDR, and as a result no further claims on members of our schemes occasioned by the change in the PIDR will be required in 2018/19.

On this basis NHS Resolution is not required to hold assets to cover liabilities arising from the indemnity schemes. Therefore the Board has concluded that it is appropriate to apply the going concern basis of accounting.


35

Performance report

Our strategic aims

Performance analysis

We continue to work to deliver our refreshed priorities outlined in Our strategy to 2022: Delivering fair resolution and learning from harm.

The strategic aims outlined in our business plan for 2017/18 were:

Strategic priority 1: Resolution

• To continue to provide cost-effective dispute resolution services for appeals, claims and cases.

• To challenge the legal environment, reducing litigation and increasing the use of alternative dispute resolution.

• To reduce the unnecessary costs attached to claims and inform policy initiatives designed to achieve this outcome.

• To extend the reach of the Practitioner Performance Advice service into organisations that are not currently using our services.

Strategic priority 2: Intelligence

• To understand and respond to the drivers of cost and our customers’ needs.

• To help the system, organisations and individuals identify and address issues.

• To share what we know to inform policy development.

• To ‘diagnose’ the issues driving costs and use this to devise and signpost interventions.

Strategic priority 3: Intervention

• To work in partnership with other arm’s length bodies (ALBs), NHS trusts, patients and healthcare staff to improve the way in which the NHS responds to incidents.

• To provide the system with access to a range of intervention services that uses our expertise to support improvement.

• To inform and implement policy initiatives effectively.

• To play a unique role in incentivising safety improvement, using the indemnity schemes as both a platform for learning and a lever for change.

Strategic priority 4: Fitness for purpose

• To ensure we have the right skills and resources in place to deliver our services.

• To be a learning organisation that continuously improves and delivers services with the most effective use of our resources.

Our Performance report sets out how we have delivered against our strategic aims in-year and we:

- outline the financial challenges and the trends and key features we have observed as a result of analysing our data;

- explain the steps we have taken to share the costs of claims fairly and to incentivise improvement;

- describe how we have used our expertise in order to preserve funds for patient care by targeting our strategies on resolution, including influencing the law;

- describe how we have worked with providers of NHS care to learn from claims in order to drive improvement;

- confirm the steps we have taken to obtain and respond to external feedback; and

- summarise the activity we have undertaken within our various operating divisions to add value for our customers.

https://resolution.nhs.uk/our-strategy/

36

Performance measures

Our performance measures provide an objective assessment of our operational performance and how we are delivering against our strategic aims. NHS Resolution has key performance indicators (KPIs) covering all areas of operations, which are reviewed annually to ensure that they support us to continually learn and develop our services. At a high level, our KPIs provide assurance and performance information to our Board and the DHSC. Internally, they drive continuous improvement for our operational teams.

Our KPIs are agreed by our Board and the DHSC and published annually via our business plan with the exception of some of our claims KPIs where publication could prejudice the effective management of claims.

The performance of our legal panel firms is also monitored closely under a balanced range of KPIs that are specified in our contracts with them in order to ensure a high quality service at a competitive price. Throughout 2017/18, we continued to review the distribution of work and performance in relative, as well as absolute, terms and intervened as required.

NHS Resolution’s Board and workforce strategy group monitored a variety of workforce indicators, including establishment levels, employee turnover, recruitment, sickness absence, levels of pay, and equality and diversity statistics, to ensure that the associated HR issues flowing from our business were properly managed.


37

Performance report

Table 2: Key performance indicators

Priority 1: Resolution Service Target Met

Response time to a letter of claimClaims Management

Internal

Closure rateClaims Management

Internal

Claims closed with no damages paymentClaims Management

Internal

Time to resolutionClaims Management

Internal

Mediation of claims through our new mediation service

Claims Management

50 cases

Repudiated claims converting to a damages paymentClaims Management

Internal

Reduction in the number of cases proceeding to litigation

Claims Management

Internal

Reduction in the open book of claims over a two-year period ending 31 March 2019

Claims Management

Internal N/A

‘First step’ letters sent out within seven days of receiving the appeal or dispute

Primary Care Appeals

90%

Appeals or disputes where at least 14 days’ notice of an oral hearing is given


100%

Appeals where the decision maker agreed with recommendation of case manager


80%

Time to resolve appeals and disputes – internal input only


15 weeks

Time to resolve appeals where external input is required


25 weeks

Time to resolve disputes where external input is required


33 weeks

Positive outcome of quality audits for appeals and dispute files


90%


38


Priority 2: Intelligence Service Target Met

Percentage of members visited that have accessed their scorecard and provided positive feedback on it

Safety and Learning

80%

Healthcare Professional Alert Notices issued/released (where justified) within target working days

Practitioner Performance Advice

90%

Healthcare Professional Alert Notices revoked (where justified) within seven working days


90%

Priority 3: Intervention Service Target Met

Positive feedback from trusts visited on recognition of products

Safety and Learning

At least 60%

Response rate to members following a request for contact within five working days

Safety and Learning

95%

Education events rated by participants at least four out of five for effectiveness/impact


90%

Requests for advice responded to within two working days (or within an alternative timeframe requested by the employing/contracting organisation)


90%

Clinical advice reports produced/issued to the General Dental Council within 10 working days


98%

Assessments and other interventions delivered within target timeframe


92%

Assessment and other intervention reports produced/issued within target timeframe


90%

Percentage of exclusions/suspensions critically reviewed in line with the following timescales:

Stage 1: after initial four weeks

Stage 2: at three months

Stage 3: at six months


90%

Decisions on referrals for assessments and other interventions communicated to the referrer within 11 working days of receipt of all referral information


90%

39

Performance report

Business areas performed well against KPIs in 2017/18, achieving most KPIs, and exceeding targets in a number of areas. For Claims Management the KPI relating to the letter of response was missed by three percentage points. The target was impacted by resource challenges in the latter half of the year. The resource challenge has been stabilised and the expectation is that improvement toward delivery of target will be

achieved in 2018/19. The time to resolution targets have presented a challenge for most of the year and the issue was highlighted by the NAO report Managing the costs of clinical negligence in trusts, published on 7 September 2017. NHS Resolution is working collaboratively with other government agencies to understand the tension between settling claims early and at the optimum value. For Practitioner Performance Advice, the KPI ‘assessments

and other interventions delivered within target timeframe’ was not met in 2017/18. However, this was a stretching target and did result in a 30% improvement overall.

We now describe in more detail our performance under the headings of our four strategic aims: resolution, intelligence, intervention and fitness for purpose.

Priority 4: Fitness for purpose Service Target Met

Indemnity scheme financial spend Finance Within 5% of targetN/A

(PIDR)

Undertake annual customer satisfaction survey to inform service development

Membership and Stakeholder Engagement

Complete in 2017/18

Target for participation in our customer satisfaction survey to ensure engaged customer base


60%

Evidence of increasing scores covered by annual customer satisfaction survey year on year


Increasing scores in 50% of areas covered

Overall approval rating in the 2017/18 customer satisfaction survey

All 55%

Downtime (unavailability 7am–7pm) of any IT system IT and FacilitiesNo > 5% of working month

Downtime (unavailability 7am–7pm) for the extranet and claims reporting services

IT and FacilitiesNo > 2.5% of working month

Workstation audits to be carried out monthly to ensure compliance with our security policies and standards

IT and FacilitiesCompletion of 10 audits

40


Resolution

Managing claims fairly and effectively

In order to address the rate of growth in the claims costs we continue to manage claims fairly and effectively including challenging excessive claims for damages and costs and claims where there has been

no negligence, in order to preserve funds for NHS care. It is important that we develop legal precedent by taking cases to trial or to the higher courts in areas of law which need to be challenged in the broader

interests of patients and the NHS or which require certainty. We also have a responsibility to pursue alternative ways to achieve fair resolution that don’t have to involve a costly legal process.

The NAO report, as previously mentioned, identified that the median time to resolution for all claim categories in 2016/17 was 426 days; ten years ago in 2006/07 the figure was 300 days. The additional 126 days represents just over four months longer to resolve claims.

The NAO identified there needs to be a balance to settle claims at the optimum time and value, neither overcompensating by resolving too quickly nor increasing compensation cost by taking too long to resolve. NHS Resolution is working to identify the causes

of the increase in the time to resolution and which of those potential causes can be improved upon; some causes may require intervention from other government agencies.

41

Performance reportNHS Resolution Annual report and accounts 2017/18

Developing legal precedent

Testing claims at trial often has wider implications for other, similar cases and so the outcome of a case can either provide an opportunity for others to claim under similar circumstances or deter claims without merit. We take cases to trial where there is ambiguity in the law or new points of principle need to be considered.

Testing a point of legal principle

This case examined the legal balance between patient confidentiality and breach of duty.

ABC v. St George’s Healthcare NHS Trust and Others (Court of Appeal, 16 May 2017)

In 2009 ABC’s father was confirmed as suffering from Huntingdon’s Disease – an incurable neurological condition which is both progressive and ultimately fatal. The condition can be passed down the blood line and the children of sufferers have a 50% chance of inheriting the condition. Although the father told his brother of the condition he refused permission for his daughter, ABC, to be informed, fearing that she would abort her unborn child or kill herself.

Medical and other staff discussed whether they should override patient confidentiality and inform ABC but decided against that course of action. In time, after having given birth, ABC was accidentally told of the diagnosis by a doctor. She underwent testing and was herself diagnosed with the disease. It is not yet known if her child will be similarly affected.

ABC claimed that medical staff were negligent in failing to inform her of her father’s diagnosis and alleged that had she been told she would have had a termination. She therefore made a ‘wrongful birth’ claim against the NHS bodies involved. At first

instance this was struck out as demonstrating no reasonable chance of success, but ABC appealed.

The Court of Appeal unanimously allowed the claim to be reinstated. They noted that patient confidentiality is not absolute and that guidance from the royal colleges specifies that “In special circumstances it may be justified to break confidence where the aversion of harm by the disclosure substantially outweighs the patient’s claim to confidentiality”. They also thought that cases involving disclosure of information arising from the practice of clinical genetics might be distinguishable from others, while accepting that there was no authority on the point from the English or Welsh courts. Consequently, they held that the case was arguable rather than bound to fail and therefore it was appropriate for the claim to proceed to a full trial when its details could be considered judicially.

Comment

This is a highly novel case. It is important to stress that the claimant has not succeeded, but rather her case has been reinstated to enable another court to hear the full facts. The potential ramifications for the NHS are considerable.

42

XX v. Whittington Hospital NHS Trust (High Court, 18 September 2017 – Sir Robert Nelson)

As a consequence of the Trust’s admitted negligence in failing to detect signs of cancer between 2008 and 2013, the claimant developed invasive cancer of the cervix for which she required chemo-radiotherapy treatment, which led to infertility. She postponed treatment to take other opinions because she desperately wanted a family of her own. Those opinions were pessimistic and therefore before surgery and subsequent therapies she underwent a cycle of ovarian stimulation and egg harvest, producing 12 eggs which were cryopreserved.

XX and her partner decided to have their own biological children by surrogacy, their first choice being California where the partner had a relative. In that state commercial surrogacy is both lawful and binding, whereas in England it is illegal to pay a surrogate mother more than reasonable expenses and the surrogate can refuse to hand over the baby to its biological parents. The full costs of four surrogate births in California were therefore claimed.

The judge noted that a previous Court of Appeal ruling – Briody v. Knowsley Area Health Authority 2002 – had rejected a similar claim. However, the chances of a successful surrogacy in the present case were much higher than in the earlier claim. Also, the Human Fertilisation and Embryology Act 2008 had subsequently permitted the granting of parental orders to parents who have entered into surrogacy arrangements abroad. Nevertheless it remained the case that commercial surrogacy in this country was illegal and therefore contrary to public policy. Consequently, this claim could not succeed.

An award was made for the costs of two surrogacies in the UK, amounting to reasonable expenses only, totalling £74,000. Adding in other heads of damage the total award was £581,000.

Comment

While this was an extremely sad case where the claimant lost her fertility as a consequence of the trust’s negligence, the fact that commercial surrogacy remains illegal here was the determining factor in this element of the claim being rejected. It remains to be seen if the Court of Appeal will hear the arguments.

Ensuring proportionate and responsible compensation costs to protect NHS funds

This case examined whether the costs of a commercial surrogacy could be recouped as part of a claim following a case of negligence that led to infertility.


TH v. Buckinghamshire Healthcare NHS Trust (High Court, 13 September 2017 – Sir Alistair MacDuff)TH was assaulted in the street late at night and was taken to A&E by ambulance. He arrived at 02.39 but was not sent for computed tomography scanning until after 05.00. The trust admitted breach of duty in respect of this delay but denied that it had made any difference to the ultimate outcome for the patient.

While in the care of paramedics in the ambulance, TH’s Glasgow Coma Scale (GCS) score had been 12 out of 15. It was accepted that this, coupled with an accompanying head wound, mandated an urgent scan. It was asserted on behalf of the claimant that this should have happened by no later than 03.00 but the judge accepted the trust’s argument that time was needed to examine the patient thoroughly before scanning. He held that the scan request should have been made between 03.15 and 03.30, a saving of at least 90 minutes.

In fact, by 04.50 the claimant’s GCS was down to 4/15, representing a very serious deterioration. When the scan eventually took place it was read by an external specialist and a diagnosis of extradural haematoma with active bleeding was made at 05.30. A call was made to the local tertiary referral centre in Oxford with a view to possible urgent transfer for emergency surgery. However, the on-call specialist at Oxford thought it highly likely that the patient was already ‘coning’, i.e. suffering a prolapse of the brain. This is usually fatal, so the transfer did not take place. Somewhat unusually,

TH showed signs of partial recovery at 08.30 so transfer was then arranged and decompression surgery commenced at 10.30. TH survived but remains seriously affected by his injury. It was alleged that had the trust acted sooner, he would have fully or at least substantially recovered.

The judge had to reconstruct what would have occurred had there been no negligence. If a scan had been ordered when it should have been, namely by 03.30, he held that diagnosis would have been achieved by 04.00 (instead of 05.30) and the patient would have been transferred to Oxford where decompression would have been complete by 06.00 instead of 11.00 – a saving of roughly five hours.

However, on the evidence, this would not have made a difference. Since coning had occurred by 05.30 at the latest, and probably earlier because fixed pupils had been noted beforehand, the brain had been compressed well before 06.00 so even on the ‘non-negligent’ timing TH would have had the same outcome as had actually occurred. Accordingly, the trust’s admitted negligence made no material contribution to the injuries TH sustained.

Comment

This ruling demonstrates that even where there has been a failing by the defendant of some magnitude, the claimant must still prove on the balance of probabilities that this caused additional injury. TH failed to do so because his brain damage was complete even by the time his neurosurgical operation should have been concluded without the negligence that occurred.

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Performance report

This case shows the complexity around linking breach of duty to a final outcome.


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S v. Lewisham and Greenwich NHS Trust (Court of Appeal, 12 December 2017)

The claimant, a community midwife, suffered injury to her back when picking up a plastic carrying case containing an oxygen cylinder needed for home births. This weighed between 7.5 and 8 kg (roughly 17 lbs) and was used by the claimant and her colleagues frequently. She had raised no previous complaints about the weight and there had been no similar incidents in the past. There was no suggestion that it was not reasonably practicable to have avoided manual handling of the case. The supervisor had never undertaken a risk assessment because the case was designed to be lifted by its handle and had been in use for many years without issue. Ms Stewart had been provided with training in moving and handling equipment. On the claimant’s behalf it was alleged that there had been a breach of the Manual Handling Operations Regulations 1992 and that a risk assessment should have been performed.

On losing at trial the claimant appealed. The Court of Appeal fully endorsed the judge’s ruling. Regulation 4 of the 1992 Regulations only applies where there is a real risk of injury. Here, the weight was not excessive and the case had a carrying

handle. For some reason the claimant scooped it up with her hands beneath the bag rather than using the handle. Guidance on the regulations by the Health and Safety Executive had a risk assessment filter. This states that where a load of the weight in question is easy to grasp, there is a good working environment and the activity is low risk the employer will not normally have to undertake any other form of assessment. The judge had held that the weight was well within “the approximate boundary within which the load is unlikely to create a risk of injury sufficient to warrant a detailed assessment”. That was an appropriate conclusion. Where there is no real risk of injury there is no duty on the employer under regulation 4. The appeal was therefore dismissed.

Comment

While this was an unfortunate accident to an NHS employee going about her normal work, the weight was relatively low and the case had an appropriate handle. There had been no previous complaints or similar accidents and therefore the employers were not required to undertake a risk assessment. In all probability had such an assessment been undertaken it would not have advocated any change to existing practice.

In this claim a community midwife injured her back while picking up a case containing a cylinder, but failed to obtain damages because there was no real risk of injury.

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Performance report

Defending cases to trial

We continue to defend cases to trial where we consider there has been no negligence or where the amount claimed is thought to be excessive.

We have taken 110 cases across all schemes to trial in 2017/18 with a success rate of 67%. This represents a fall of 4% (4 cases) in cases taken to trial on the previous year but an increase

in the success rate by 2% from 65%. 74 cases were successfully defended and the majority of issues involved disputes on liability and quantum.

Figure 15: Litigation rate10

0%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

Settlement year

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2017/182016/17

Proportion of claims settled without court proceedings Proportion of claims settled after court proceedings start

63%

37%

64%

36%

59%

41%

57%

43%

58%

42%64%

36%

65%

35%67%

33%

66%

34%

67%

33%

63%

37%66%

34% 32%

68%

10 The data in this figure relate to clinical claims only and it differs from the earlier Figure 2: Settled claims, which represents both clinical and non-clinical claims.

The proportion of cases settled after court proceedings start has reduced to 32%, the lowest for many years, as a result of our strategy to keep cases out of formal court proceedings wherever possible.

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Clinical: Judge supports clinician’s management

The claimant underwent a total right hip replacement and suffered ongoing pain, weakness and altered gait. She alleged that the surgeon who performed the procedure used an approach that placed her at greater risk of sustaining a nerve injury and that in fact she had suffered a nerve injury. The claimant also alleged that the implant was inserted in a non-anatomical position, there was a failure to consider bursitis and she was not referred for an MRI at six months post-operation. The claimant accepted that when taken separately none of those outcomes could be considered negligent, but it was alleged that when taken in combination the court should find that the overall conduct of the procedure fell below a reasonable standard.

The case was defended because we considered this approach was incompatible with existing law, and the Judge agreed. He rejected the claimant’s case and made a finding that this was not the appropriate test and that in order to succeed negligence must be established for each act separately.

It was common ground that the claimant had sustained a nerve injury, but while the claimant had alleged that this was the result of the surgeon using an outdated technique, the court found no evidence to support that assertion. The Judge found the surgeon to be a witness who had given his evidence with great dignity, and who had performed many thousands of similar procedures without ever having knowingly caused a nerve injury. The court also rejected the second strand of the claimant’s argument, finding that, on radiological imaging, the implants were not displaced, and that any leg-lengthening that the claimant may have suffered was within a reasonable range. The court therefore dismissed the claimant’s claim in its entirety.

This case illustrates that a poor outcome does not necessarily mean negligence. It highlights the importance of defending claims where there is compelling evidence that the treatment was appropriate.

Two examples of claims taken to trial under our clinical and non-clinical schemes follow:

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Performance report

Non-clinical: Employee did not suffer needle stick injury as result of a Trust’s negligence

This was a claim for damages arising out of a workplace accident. The claimant was employed by the defendant Trust as a healthcare assistant. She was requested to take blood from patients. The claimant stated that while drawing the curtain around the window and foot of a patient’s bed the curtain knocked the sharps bin (a hard plastic container used to safely dispose of hypodermic needles and other sharp medical instruments)

2017/18 - NHS Resolution · on a thematic review of NHS Resolution data on cerebral palsy claims...

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