NHS To Take A Bite Out Of The Compensation Cherry

Oliver Letwin, the Dorset West MP, in a speech to the Centre for Policy Studies quoted figures of over 400million having already been paid out in 2003 by the NHS in compensation for clinical negligence claims with a further 5billion more in cases waiting to be settled. This is a huge demand on the already thinning resources our National Health Service relies upon. Recently it has been suggested that legal aid be removed as an option for those seeking compensation for clinical negligence to be replaced by solicitor's no win, no fee arrangements. This will place the burden of paying for fraudulent and "time-wasting" claims on the shoulders of the solicitors themselves who up till now have been receiving nearly 40% of the total compensation costs the NHS is struggling to find.

More dramatic, though, is the recent draft produced by Health Minister Rosie Winterton for a new, expanded NHS Injury Costs Recovery (ICR) scheme. Meaning the NHS can recover the costs of treating a patient who has made a successful compensation claims. For years hospitals have been able to recover the costs of treating people injured in road traffic accidents where the injured party has successfully claimed compensation for their injuries. Within the past five years the NHS has recovered on average around 105million per year from third party insurance companies. The move to expand the current Injury Costs Recovery scheme is estimated to recover an additional 150million per year to cover the treatment of those who were injured due to someone's negligence in any type of personal injury claim.

The Health Minister stated: "This policy will encourage employers to take steps to prevent employees being injured and when implemented should increase the total recouped each year to around 250million for the NHS - equivalent to 53,000 hip operations and 11,000 newly qualified nurses . It is unacceptable that taxpayers have to pay for the medical treatment of someone injured at work simply because employers fail to take adequate steps to protect their workforce. Individual hospitals will now be able to recover the costs and decide where they want to reinvest that money to improve services they want." In response to this a spokesperson for the Institute of Directors said: "Businesses pay tax which pays for the NHS, so why should it pay again for treatment? In road accidents it is normally someone's fault but it is not so clear cut with personal injury.

It could mean that businesses are left fighting costly and lengthy battles against claims. That may just be too much for some, especially small businesses." But despite these concerns TUC General Secretary, Brendan Barber stated: "We welcome this consultation. It is important that negligent employers pay the full cost of their actions rather than expecting the taxpayers to subsidise their failures to protect workers. However it important that this is not just seen as another cost to be added to insurance premiums and instead is used by the insurance industry as an incentive to improve the measures that employers take to prevent injuries at work." The stiff regulations self-imposed on motor insurance policies by insurance firms has always been lacking in other areas.

Whereas a motor insurance customer will have to declare age, current employment, years holding a license, any previous accidents, yearly mileage, motoring convictions, registration number, type of license, other users of the car, any other cars owned plus a multitude of other questions - public liability insurances consist of much less confirmation. Hopefully this move will be more of a wake-up call for insurance companies than another reason for them to push up premiums. Sadly the The Association of British Insurers are not convinced that insurance firms will respond in the way hoped for by the Health Minister, predicting the scheme would force insurance premiums up by 8%. The Law Commission felt the move would encourage employers, public authorities and others with responsibility for the health and safety of others to take those responsibilities more seriously and improve their health and safety practices. More than 75% of those who responded to the Law Commission's consultation on expanding the Road Traffic Accident scheme to cover all cases of personal injury in 1996 agreed with the Commission that the NHS should be able to recover its costs from the insurance of the individual(s) responsible for the injuries it had to treat.


Michael Beverley, Claims4Free, Compensation Claims Legal Aid began the firm to try and stem the heavy flow of money that was being drained from the UK's insurance firms for un-necessary legal and loan costs being bloated by other claims management firms.

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