The Medical Defence Union last month threw in its hand on the second day of a nine-day High Court trial and agreed to pay £1.57m to Richard Sheppard, who collapsed in the street minutes after leaving his GP's surgery and suffered brain damage. He had gone to see his doctor complaining of chest pains. The GP diagnosed indigestion, although he knew Mr Sheppard had a family history of heart disease, a high cholesterol level and worked long hours in a stressful job.

The case is one of the largest settlements so far achieved under a no-win no fee deal - technically known as conditional fee agreements - and it points the way to the future. Those suing on a no-win no-fee basis pay their own lawyers' fees only if they win, but still remain liable to pay disbursements - money spent on court fees, expert witnesses and possibly barristers' fees - and the other side's legal costs if they lose.

The NHS can now brace itself for more such medical negligence claims following new developments which will make it easier for people who don't qualify for legal aid. Since 1995, when lawyers were first allowed to offer no-win no-fee deals, specialist insurers have offered cover for expenses and the other side's costs, but would-be claimants in medical negligence cases had to find a hefty premium. Now, insurers are coming up with new products which avoid the need to make any payments upfront.

Mr Sheppard had legal aid for the initial investigation, then lost it when his permanent health insurance kicked in. He paid an initial£6,240, which covered costs up to a week before trial, but needed to increase his cover to a total of£300,000 to go to trial. By then the insurers, Litigation Protection, were offering the new product. The premium of£21,000 and a fee of£4,000 were payable by Mr Sheppard, only if, and when, he won compensation. Had it been available earlier, he need not have risked any of his own money.

At least one other insurer is offering a similar product and others are bound to follow in this competitive market.