Radical changes to the way medical negligence cases are handled came into force this week.
The reforms, which will force trusts to 'own up' quickly when mistakes are made, should speed up and simplify the claims process and combat the spiralling cost of litigation.
The Clinical Disputes Forum, a group of doctors, lawyers, managers and patient representatives set up after the Woolf report on access to justice, says the NHS spent up to£300m on negligence cases last year.
It would face an estimated£2.3bn bill if all outstanding cases were settled.
Trusts and health authorities will have to meet tough new targets for providing medical records and dealing with claims under the pre-action protocol for the resolution of clinical disputes drawn up by the forum.
NHS bodies will have to answer a patient's 'letter of claim' within two weeks, and provide a full answer within three months. Failure to comply with the protocol could be referred to a court managing the claim.
When dealing with serious errors, trusts will have to explain swiftly what went wrong and offer an apology.
Forum chair Dr Alastair Scotland said the new system was 'a major step forward for the NHS'.
'We want to put the culture of delay and secrecy behind us.'
NHS Confederation policy manager Tim Jones said it was an 'excellent' system which should lead to 'faster resolution' of cases and 'dovetails with initiatives on clinical governance'.
The Medical Defence Union, which handles claims against doctors, also backed the changes.
Head of claims handling Dr Julia Neild said it should mean that the NHS learned much faster 'what the claim really is' rather than being 'kept in the dark' by delays under the old system.
'It is difficult to predict what the outcome will be, but overall it should reduce the number of claims,' she said.
The MDU paid out£65m for negligence cases in 1998.
Steve Walker, chief executive of the NHS Litigation Authority, which handles large claims, said 30 per cent of applications for medical records currently led to a claim.
He argued that this should fall under the new system because it would 'give early information to both sides to enable people to judge whether or not to ring a claim'.
NHS claims and risks managers 'have been working very hard to make this happen,' he added.
MPs will scrutinise the way negligence is handled later this year.