New negligence rules render trust 'unviable'

The changes, implemented in April, will have an especially heavy impact on Liverpool Women’s Foundation Trust.

The new rules brought in by the NHS Litigation Authority give more weight to an organisation’s claims history when setting its premium. They were first agreed in 2012-13.

Along with an increase in premiums for trusts that have previously been subject to high-value claims, the changes also remove discounts for those that had achieved higher risk management standards.

The new clinical negligence scheme for trusts considers their risk profile and claims experience of members of the scheme, as well as the overall total amount required to fund it.

The changes have also been applied retrospectively, meaning Liverpool Women’s has to pay for claims related to cases dating back to 2001.

This makes the £102m turnover trust liable to a group action expected to cost £35m. It relates to claims made by around 360 women who said mistakes by urogynaecologist George Rowland between 2001 and 2008 had made their incontinence worse.

The FT tried to challenge the decision to apply the rules retrospectively, but the authority has reiterated the decision, prompting the trust to declare itself “financially unviable” in its strategic plan.

Vanessa Harris, director of finance at Liverpool Women’s, told HSJ: “We didn’t have any problem with the rules being changed, but we contested the decision to apply them retrospectively.

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“We have made that argument with the Litigation Authority, but they said the changes have been cleared with the Department of Health after a consultation.

“A lot of trusts have seen their premiums increase, but we’ve got a really extreme case.

“Our premiums would have increased anyway, without retrospective application of the rules, but it would have been manageable without the group action.”

The trust’s future is now being considered as part of Liverpool Clinical Commissioning Group’s Healthy Liverpool programme.

Asked whether a merger with another trust was a likely outcome for Liverpool Women’s, Ms Harris said: “We are still looking at all the options at the moment.”

The liability for the group action would pass on to any merged organisation, she added.

A spokeswoman for the Litigation Authority said: “Our revised pricing approach rewards members who reduce harm by reducing the costs of indemnity cover to those organisations who incur fewer, less costly claims.

“If a member incurs fewer claims or claims that are less costly to resolve, then they will pay less for their indemnity cover. In this way the [authority] financially incentivises members to reduce the harm which results in claims and improve patient and staff safety.”

The decision to remove risk management discounts followed an “extensive review and discussion with members of the scheme”, she added. Forty-one trusts had the achieved the highest risk management rating on a three point scale.

The scheme now offers a “discretionary incentive payment” of up to 10 per cent of trusts’ premiums if they produce “robust safety improvement plans to demonstrate how their organisation intends to save lives and reduce harm”.

The authority did not comment when asked about Liverpool Women’s, which was recently rated “good” by the Care Quality Commission.