No-fault system may end NHS defensiveness but push up cost

Chief medical officer Professor Liam Donaldson will chair a committee - including clinicians, managers and patient bodies - examining a range of possible reform options before a white paper is drawn up early next year.

Those include the creation of a tariff system for specific injuries and the greater use of mediation, as well as no-fault compensation.

The National Audit Office has already said 41 per cent of claimants interviewed might have ditched legal action had they received an explanation, an apology and prompt compensation.

But policy director of the NHS Confederation Nigel Edwards told HSJ: 'Costs will rise simply because there are a lot of people at the moment who do not go through the court system for compensation. With the changes under consideration, it will allow more people to make claims.'

Institute of Healthcare Management chief executive Stuart Marples agreed, but said it was a gamble that needed to be taken: 'Although easing the path to compensation could turn out to be more expensive, most will feel it is a risk worth taking. It allows for genuine error and ensures that clinical care is set in a learning not a defensive environment.'

The white paper would aim to reduce claims against the NHS, currently totalling£3.9bn, as well as bringing an end to the current adversarial system which health secretary Alan Milburn said contributed to a 'cover-up culture'.

The committee will look at structured settlements which could lower costs - instead of lump sums, victims would receive periodic payments as well as nursing care and treatment. This could prevent the NHS being hit twice following mistakes - once in the payment of compensation and then again by having to fund a victim's care.

Christian Dingwall, a partner at Bevan Ashford, a firm representing trusts, also believes payouts could rise under no-fault compensation schemes.

He said: The committee will have to examine if people going through the tariff system will still have the option of using the courts. I do not think they will be given two bites at the cherry.'

He also warned that no-fault compensation may not reduce the role of lawyers in settlements.

Although fault will not have to be proved under the system, causation will still be an issue.

But he welcomed moves towards greater mediation, although pilot schemes in the NHS have had limited success. 'In the past many patients have been reluctant to take it up. Probably it is to do with the lawyers because it is not generally in their interest to go down that path. But it does offer what many people want - reconciliation, an explanation and acceptance that something had gone wrong.'

The reaction of patient's groups to the planned white paper has been mixed. A spokesperson for Action for Victims of Medical Accidents said: 'To blame the lawyers, as the government has done, is simply ridiculous. It was this government that said they were going to open up the legal system with their no-win no-fee system. To turn round and say it is unacceptable for injured NHS patients is unfair.'