NEWS FOCUS: The NHS's compensation bill has to be cut - but how? A tariff system could be a solution, but would it work, asks Ann McGauran

Long drawn-out and acrimonious battles over compensation claims are a massive financial burden on the NHS, but the government has the lawyers in its line of fire.

The aim of any new system to deal with negligence claims would be to stop costs escalating and give trusts greater control. In the last financial year settled cases cost£386m, seven times more than in 1997.

One option under consideration is a tariff system that sets specific amounts for particular circumstances, with payouts where there is clear evidence of negligence - but without the need to prove liability.

But would tariffs really work?

Will the public find them palatable and could such a system offer enough advantages in terms of costs and speed to make a complete overhaul worth it?

Another crucial question is whether the NHS is comfortable enough with the move towards a 'no blame' clinical governance culture to enable it to own up quickly when mistakes are made?

On the face of it, the tariff approach 'all seems very simple', according to Gay Wilder, health law group partner at Browne Jacobson. 'You calculate the damages in the book and there is no dispute about what the payments are going to be.'

But she questions whether it offers scope to exercise discretion.

How would it deal with the great variation in loss of earnings, and are there going to be a host of sub-categories - 'say, for someone who's middle-aged, single or has dependent children?'

'The whole idea of damages is to put people in the position they would have been in before the negligence, ' she says. 'A tariff would not do that.'

Sort out the basics before deciding if change is needed, advises solicitor Paul Balen of Midlands firm Freeth Cartwright. He was a member of the expert panel for the National Audit Office's May report, Handling Clinical Negligence Claims in England.

'The government refuses to understand the problem, ' he says.

'The most effective way of dealing with relatively small claims is by way of a full and frank admission to patients when things go wrong.'If that culture 'is put into place and policed, then fewer patients will bring claims', according to Mr Balen.

The person whose child has died in hospital is 'not going to want to go to a standard claims supermarket', he believes. If standard tariffs are what is on offer, he predicts that patients will 'go elsewhere to sort out their ongoing problems'.

What trusts need to do, he suggests, is get back to 'basics' such as producing medical records on time. He also believes the new concentration on clinical governance and the launch of the National Patient Safety Agency - with its responsibility for collecting information on adverse events - needs 'time to bed down'.

The government is determined to put across the message that doctors should not be demonised when things go wrong. But in return it is demanding much more openness in dealing with patients.

Last week for the first time the government joined forces with the NHS and the Academy of Medical Royal Colleges to publish a shared vision for putting quality first, including being upfront about medical mistakes and a drive to reduce risks (see panel).

Openness is not a problem at North West London Hospitals trust, where Jane Chapman is head of clinical risk and legal services. A member of the NAO expert panel, she says that not only do doctors trust her enough to phone her when things have gone wrong, they even contact her before some operations.

'They say, 'I think I am going to have a problem, so can I have some advice?'.' Her tips are to 'get alongside the claimant and their lawyer' and keep as much claims management as possible in-house.

'If you go to people who have suffered adverse incidents they will tell you, 'I want to know you have learnt your lessons, '' she says.

Her trust is currently dealing with 'a possible avoidable death'.

The relatives 'can get£10,000 for the death of a close family member but It is not what they want and it will not give them any answers'. Instead, 'we told them what we did wrong and can catalogue a whole series of mistakes and are sharing all that with them'.

In her view, tariffs would 'most likely increase the number of claims'. She adds: 'I can't see it doing anything but harm.'

She also finds it hard to see how the government could remove the right of people to go to court.

David Towns is head of communications for the NHS Litigation Authority. He says a tariff system would 'cut the cost of lawyers, ' but what would 'have to be decided is how much money the NHS could spend on the system'. Would a capped approach ever be accepted by the well-organised claimant lobby and could it lead to claims for breach of human rights?

Senior medical claims handler for the Medical Defence Union Dr Frances Szekely says capping would be 'unfair and I do not think it would get public support'.

Better approaches might include beefing up clinical risk management within trusts and ensuring that the results of investigations of adverse incidents were shared.

Jane Chapman notes that she 'doesn't have access to information about other trusts other than through the media'.

David Jones, board administrator for Wrightington, Wigan and Leigh trust, says that when it comes to openness and a willingness to admit to mistakes, 'if you have a problem with that, it will remain whatever the system'.

The Department of Health told HSJ that it 'hadn't ruled anything in or out' in the government's promised reform of the clinical negligence system.

Ending the blame game: the seven-point pledge

The aim of the seven-point pledge published jointly by the government, the medical royal colleges and the NHS last week was to spell out a combined commitment to quality.

Drawn up by chief medical officer Professor Liam Donaldson, it is something of a breakthrough and a step forward from the CMO's earlier report, the clinical governance bible An Organisation with a Memory.

Coming just weeks before the publication of the Bristol Royal Infirmary inquiry report is due, it talks of 'ending the blame culture'.It also pledged:

commitment from the top to implementing quality assurance and quality improvement;

to involve patients and their representatives in decisions on their care and service design;

to work towards valid, reliable, up-to-date information on quality;

to work together to determine clinical priorities;

to create an open and participative culture that recognises safety and the needs of patients;

to recognise and learn from honest failure and implement a drive to reduce risk for future patients;

to recognise a shared common interest with the public in improving service quality.

Could this avowed commitment to openness deliver more satisfied complainants and more swiftly settled claims? Chief executive of the Commission for Health Improvement Dr Peter Homa 'welcomes and strongly endorses'Professor Donaldson's emphasis on quality and says 'the culture is changing but there is a long way to go'.

He says CHI has found examples of risks, near misses and adverse events that are being brought to the risk manager's attention and leading to improvements in patient safety'.

But CHI has also uncovered dysfunctional clinical teams and 'poor relations between clinicians and managers that prove a major obstacle to proper disclosure'.'What is very clear is that patient safety is the major area that demands attention across the NHS, 'Dr Homa told HSJ, and he insisted that the National Patient Safety Agency had to 'represent information to the NHS so that there is proactive risk avoidance'.

Deputy head of the clinical governance support team Steve O'Neill said that creating the atmosphere in which people can admit mistakes involves 'reducing the fear factor so that people can be open, honest and questioning'.