Costs are second largest liability on Government balance sheet, warns National Audit Office.

According to the Telegraph, a report has found that it will cost the NHS more than £60bn to settle all the clinical negligence claims against it.

The health service’s liabilities have quadrupled since 2006-07 because of an increase in claims, higher payouts per claim, and rising legal fees, the Government’s spending watchdog said.

The National Audit Office (NAO) said clinical negligence was the second largest liability on the Government balance sheet after nuclear decommissioning.

The watchdog estimates that it will cost £60 billion in total to settle cases that occurred before April 1 2025, including any yet to come forward.

Some critics argue the vast sums should be put toward improving frontline care instead.

One of the major growing costs is legal fees, which now accounts for 15 per cent of the total at £538 million.

The legal costs associated with successful claims have increased “much more” than those incurred by the NHS defending itself, the NAO said, although this still runs to more than £150 million.

The report said about three quarters of clinical negligence claims settled for £25,000 or less, but cost almost four times as much in total, largely because of legal fees.

In 2024 25, £143 million of the £183 million cost to settle these “low-value claims” was to cover legal costs, while £39 million (21 per cent) was for damages.

In terms of settled claims, mental health and radiology have seen the largest percentage increases.

Meanwhile, obstetrics cases involving cerebral palsy or brain damage (£599 million) and paediatrics (£137 million) saw the largest increase in annual settled costs.

Overall, damages on very-high value cases, which includes awards of £1 million or more, account for 68 per cent of all costs, despite only constituting 2 per cent of total claims.

The highest-value claims are usually for brain injury caused by poor maternity care.

Between 2006-07 and 2024-25, the total cost for obstetrics claims involving cerebral palsy or brain damage increased by more than £1 billion in real terms.

The report also forecasts the cost of clinical negligence “will continue to grow substantially”.

When looking at annual figures, the yearly clinical negligence bill has more than tripled over the past two decades, from £1.1 billion in 2006-07 to £3.6 billion in 2024-25.

The report said improving how the NHS responds to complaints of harm could reduce the number of claims and the cost of clinical negligence.

It said: “Stakeholders raised concerns about how well individual health providers apply the duty of candour, which is the legal obligation for honesty and transparency when care goes wrong.”

The number of written complaints submitted to the health service has risen year-on-year to a new record high, NHS England data shows.

Experts said the figure should serve as a “wake-up call”.

Some 256,777 complaints were made to the NHS in 2024/25, up from 241,922 a year earlier.

The figure is a 6.1 per cent increase year-on-year and the highest since data collection started in 2014/15.

The NAO also said plans made by the previous government to cap the legal costs in low-value cases have not been implemented.

It also pointed out how the Government may be paying twice in some cases: first by settling a claim, and then again when patients choose NHS or social care, despite an assumption their settlement will be used for private care.

The NAO acknowledged that NHS Resolution has worked hard to resolve claims faster and without litigation wherever possible, but said more needs to be done.

Gareth Davies, head of the NAO, said reducing harm to patients is clearly the best way of containing rising costs.

“Alongside this, [the health department] should consider whether the existing approach to legal costs remains proportionate for all claims, including whether alternative methods to compensate for negligent treatment could provide better outcomes for patients, with less cost overall,” he said.

Sir Geoffrey Clifton-Brown, MP and chair of the Public Accounts Committee, said the legal fees were “eye-watering”.

“It must not be forgotten that behind the amounts reported today lie many tragic incidents of patient harm,” he said, adding that a “review of the clinical negligence system must provide greater transparency, improve patients’ experience of claims and manage these rising costs, whilst work continues to reduce future harm caused to patients”.

Suzanne Trask, an executive committee member at the Association of Personal Injury Lawyers said the watchdog had “made much in its report of increases in claimant legal costs, while glossing over the fact that this has been propelled by a significant increase in delays to claims”.

She also said the money is to “support people with life-long catastrophic injuries, including children who have suffered avoidable brain damage at birth” and that “the cost of providing care has risen exponentially”.

She added: “It cannot be overlooked that the rate of avoidable harm in the NHS has also increased.”

Thomas Reynolds, director of policy at the Medical Defence Union (MDU), said the report “shines a spotlight on the huge burden borne by the British taxpayer because of an outdated clinical negligence system”.

“We have long argued that clinical negligence costs in the UK are unsustainable and diverting millions of pounds from frontline NHS services and patient care,” he said, adding that the Government should “introduce the long promised fixed recoverable costs scheme for claims valued at less than £25,000” and implement an “upper limit of £250,000”.