The NHS Litigation Authority says that it saved the NHS more than £6 million last year by challenging what it calls “unreasonable” claims for After the Event (ATE) premiums.
During 2015/16, the NHS LA faced ATE-related premium costs of £38.3 million in 2,849 cases. The Authority challenged the ATE premium costs in 1,437 of those cases, resulting in cost reductions in 846 cases. The combined savings totalled just over £6 million – a saving of 16%.
It was anticipated that the costs of ATE insurers’ claims against health organisations liable for clinical negligence compensation would fall significantly following changes to the law in 2013, including a new proportionality test.
However, said the NHS LA, ATE premiums have fallen only marginally over the last three years.
In two recent judgments, circuit judges have upheld decisions that the ATE premiums should be either disallowed or reduced.
Last month, a Circuit Judge upheld a District Court decision in Mewis v Burton Hospitals NHS Foundation Trust to disallow a ‘block rated’ premium of £1,802. Initially, District Judge Ellis had ruled that the premium was not reasonably and proportionately incurred – pointing out that no medical evidence relating to breach of duty or causation was produced and that the Trust had apologised in full.
His Honour Judge Thorp upheld that decision in the Circuit Court – saving the NHS £1,802. He also awarded the NHS LA’s costs of £4,763.
In Martin v Queen Victoria Hospital NHS Foundation Trust, Judge Belcher at Leeds County Court upheld a District Court decision to reduce the Allianz ‘block rated’ premium from £3,843 to £2,500 after applying the new proportionality test.
The test specifically provides that even costs that are reasonably or necessarily incurred should be disallowed if they are disproportionate. The defendant NHS Trust had lost a biopsy sample which resulted in a claim for damages due to the delay in treatment. One medical report costing £3,591 had been obtained (the cost of which was reduced to £2,400 on assessment in a case where the claimant secured £7,000).
A NHS LA spokesperson said: “District Judges are increasingly willing to disallow or reduce excessive ATE premiums. It is encouraging to see Circuit Judges are upholding decisions that protect the interests of the NHS and taxpayers in a fair and balanced way.”