Litigation against the NHS is on the increase, consuming money that could otherwise be used for patient care. Danny Lee canvasses opinion about replacing today's system of compensation with an alternative that doesn't seek to blame

When two-year-old Jane Tomlinson was born she was deprived of oxygen, causing irreparable brain damage and leaving her with a desperately restricted chance of leading a normal life. She will require continuing health treatment and care for the rest of her days - perhaps several decades. The cause of the incident has not yet been identified and the costs of a legal action, which sprung to life with Jane's first glimpse of the world, are now spiralling into hundreds of thousands of pounds.

This is the sort of case - costly both financially and in human misery - which is contributing to rapidly escalating legal claims against the NHS, put at£300m a year, with an estimated 15,000 cases and a total£2.8bn worth of potential complaints outstanding.

As these costs to the overstretched NHS have risen it is not surprising that the search for an alternative to expensive court actions has become ever more urgent.

The British Medical Association, among others, is calling for the introduction of a no-fault system of compensation, which would see claims paid regardless of whether there has been negligence. This would cut the costs of lawyers and other experts involved in protracted legal disputes.

'The present tort-based procedures destroy the proper relationship between patient and doctor, ' said a BMA spokesman, 'introducing a confrontational element, totally foreign to mutual trust. With a no-fault system, compensation would be based on the injured person's needs.'

But attractive as the BMA's idea may seem, other experts are not sure that it would help, and some think that it could make things worse.

John Holmes, a partner in the health litigation department of Beachcroft Wanbroughs solicitors, points out that the ramifications of adopting such a scheme would be far-reaching and not necessarily beneficial. 'It would be hard to see how we could afford such a system without drastically cutting what each claimant received in order to spread it round. Claimants and their lawyers would be up in arms.

'The alternative to a no-fault system isn't doing nothing, but working on the system that we have got and improving that through better risk management and clinical governance rather than dreaming of impossible solutions.'

In addition to this scepticism about cost-saving, Kenneth Veitch of the medical negligence department of Browne Jacobson solicitors explains that there is a common misconception about the type of schemes that have generally been considered.

'They don't get rid of the need for the claimant to prove causation - that the injury was caused by the hospital's mistake, ' he says. 'Claims wouldn't be allowed if, for example, the hospital could show that an illness was an inevitable part of treatment. And this is where many of the most difficult parts of disputes under our current system arise.'

New Zealand has had a no-fault system of liability since 1974, and similar schemes have been considered and rejected in the UK, most notably by the Pearson commission in 1978. When the Law Commission for England looked at what was on offer in New Zealand recently it noted that it 'has been subject to considerable criticism in recent years'.

In addition, it should be borne in mind that the scenario on the other side of the globe is very different from here. There are only 6,500 doctors, for example, so such a scheme is very much easier to administer than it would be in the UK.

This system has, nevertheless, got some attraction for Dr Tom Leigh, senior medical claims handler for the Medical Defence Union. 'The scheme is widely seen as fairer than the all-or-nothing experience of our litigation lottery, ' he says. 'There are also lower legal costs and settlements because there is a sense that everyone who has needs has them met.' But he thinks it is unlikely to be adopted in the UK and that there are other more fruitful areas to look to for reform.

'The law at present allows claimants awards for future care on a private basis. So NHS money goes to private care. This is more expensive than could be provided by a trust which is used to dealing with care and can offer it more efficiently. If this law was changed it would cut out one of the most expensive aspects of claims against the NHS.'

But this would raise another anomaly, since a person injured in a street accident may then be entitled to claim against the culprit's insurance for private healthcare, whereas a person injured at the hands of a hospital would be restricted to care in the NHS.

Despite its difficulties, a no-fault system offering the possibility of doing away with painfully long and expensive disputes remains a tempting option for many. Brian Bareham is risk manager at St Mary's trust in London. 'The present system is lengthy, ' he says.

'A no-fault procedure may speed it up. It would make things easier for me to settle because there wouldn't be long discussions between lawyers over blame. It would probably decrease the workload of claims risk managers and savings on legal costs would be more than adequate to cover its administration.'

The NHS Confederation would also like to see improvements in the use of scarce funds. Nigel Edwards, its policy director, points out that money spent on litigation is money that could be spent on patient services.

Lord Otton has also proposed a scheme for the NHS similar to New Zealand's and involving partial administration by trusts, partial claimant rights to apply to an independent body and retaining a more limited recourse to the courts than the present system.

However, some see calls for such a system as motivated by pure self-interest rather than a concern for the efficient use of resources.

Russell Levy, a partner in the medical negligence department of Leigh Day and Co solicitors, argues that the BMA is more concerned with its members than anything else. 'The BMA wants to reduce escalating claims against doctors, not introduce a full no fault compensation scheme.

'A scheme that genuinely compensated people for injury without looking at the circumstances in which it arose would be a wonderful social achievement. It would also be a massive extension of the social welfare system. Rather than this futile self-interested attitude we should look where the most expensive claims are - in obstetrics and anaesthetics, for example - ask what can be done to prevent these and ensure that people get decent care with the most up-to-date equipment, not 20-year-old wheelchairs.'

Paul McNeil head of Field Fisher Waterhouse solicitors is similarly unconvinced that there would be an overall advantage in changing the system.

'Most clients are mainly interested in knowing what happened to them and it is only when they are frustrated by their disabilities and lack of support from the NHS and social services that they think of claiming compensation, ' he says.

'Litigation is fundamental to people finding out what went wrong. A no-fault scheme would not do this.'

Other critics of a no-fault scheme warn that it may well breach the Human Rights Act which comes into force in October. If it restricted a claimant's right to sue, this may be an unreasonable limitation on a person's right to have access to justice and, as such, potentially illegal.

Any such system would, therefore, face a dilemma: if it restricted access to the courts it may well be illegal. If it did not, higher value claims may still head for the courts. The result could be even worse than now, with an expensive claims system to administer on top of costly litigation.

Debates over controlling budgets will no doubt continue.

Meanwhile, Jane and her parents will have to struggle to survive as the resources that could improve their lives and the care of many other NHS patients are eaten away by litigation.

Jane Tomlinson's name has been changed for legal reasons.

How it may work:

New Zealand's system, applying generally to personal injury claims, has been labelled by some a 'no-blame' rather than a no-fault system because a person claiming for a clinical injury still needs to prove that it was 'due to medical misadventure'.

A medical error for the purposes of the New Zealand scheme is a 'failure to provide the standard of care expected of a reasonably competent professional'. This is similar to the situation in litigation here but there is no need for a claimant to prove a breach of a duty of care.

Lord Otton proposed a scheme based on this system for medical claims in England.

It would have three stages:

A trust would deal with any claim below£10,000, but a dissatisfied claimant could still sue for negligence as now.

A new creation - the Medical Injuries Compensation Authority - would deal with claims between£10,000 and£500,000. Probably most claims on current values would fall within this category.

There would be a right of appeal to an adjudication tribunal chaired by a lawyer sitting with a doctor and lay person. Findings of the appeal panel would be final and any review of its decision would only be possible by judicial review if, for example, it was wrong in law or irrational.

Claimants would still be able to sue in court for claims above£500,000, but only after taking them through the Medical Injuries Compensation Authority.