According to a revealing report by MPs, lawyers specializing in clinical negligence claims took home a staggering half a billion pounds from NHS budgets last year, as these claims continued to escalate uncontrollably.

The Commons Public Accounts Committee highlighted that legal teams typically earned fees almost four times greater than the compensation awarded to patients who had suffered harm.

The financial burden of clinical negligence claims has increased significantly over recent years, with claimant legal fees soaring from £148 million in 2006/07 to an eye-watering £538 million in 2024/25.

Particularly striking is the fact that claims involving damages of £25,000 or less—making up about 75% of all cases—are now incurring legal fees that far exceed the compensation received by victims, with a cost-to-damages ratio of 3.7 to 1.

Although new regulations aimed at capping the fees lawyers can charge for these ‘low value’ claims were supposed to be introduced two years ago, their implementation has been delayed.

The cross-party committee of MPs recommends that ministers should devise an alternative approach to expedite decision-making and cut costs in these cases.

They also highlight that legal fees now account for a fifth (19 per cent) of the total settled claims bill and stress it is ‘unacceptable’ that so much taxpayers’ money continues to be diverted from frontline care to be spent in this way.

The government’s liability for clinical negligence quadrupled over the past two decades to £60billion in 2024/25, with the PAC noting the Department of Health and Social Care has been unable to show ‘any meaningful action to address this’.

Sir Geoffrey Clifton-Brown, chair of the PAC, said the rocketing cost of medical negligence payouts was diverting money away from frontline care 

Meanwhile, the NHS has failed to do enough to ‘tackle the underlying causes of patient harm’, the report warns.

The NHS spent £3.6billion last year settling negligence claims and this is likely to rise significantly to over £4billion a year by the end of the decade, the PAC said.

The findings paint a picture of a system overwhelmed by safety recommendations that it cannot action and show the NHS does not have adequate systems in place to identity and address danger areas and repeated failings.

The inquiry heard that 120 to 130 brain injury cases involving children are settled every year but it can take an average of 11 to 12 years to resolve each claim, with legal bills racking up over this period.

DHSC announced a review of clinical negligence last year and told the PAC it would not commit to making improvements until that is completed but cannot say when that will be.

Sir Geoffrey Clifton-Brown, chair of the PAC, said: ‘This is a swelling accounting of profound suffering.

‘Each case can represent unspeakable devastation for the victims involved, and the overall picture is of a system struggling to keep its patients safe from avoidable harm.

‘Indeed, the rising costs of such claims are diverting resources away from frontline care badly in need of them.

The NHS spent £3.6billion last year settling negligence claims and this is likely to rise significantly to over £4billion a year by the end of the decade

‘Patients often pursue such costly legal action due to the lack of a complaints system worthy of the name, and disgracefully for lower-value claims, the legal costs can be over three-and-a-half times what victims can expect to receive in damages.

‘Government must move at pace towards a less adversarial system, reducing costs and ensuring that claims are paid more quickly for the benefit of families involved.’

Suzanne Trask, from the Association of Personal Injury Lawyers, said: ‘The NHS’s statutory duty of candour is not adhered to across the board, leaving vulnerable injured patients in the dark about what has happened to them.

‘Transparency would reduce delays in patients receiving redress, in turn cutting the legal costs, which must be accepted as an inevitable consequence of ensuring injured victims of clinical negligence have access to justice.’ 

Sharon Allison, chair of the Society of Clinical Injury Lawyers, said: ‘While rising costs are driven by external factors like court fees and expert reports, we cannot allow cost-cutting to compromise access to justice for families shattered by negligence.

‘The solution isn’t to strip away legal rights, but to pull the levers we can by fostering collaboration to reduce time and costs and, crucially, stopping the avoidable harm that leads to these claims in the first place.’

Thomas Reynolds, from the Medical Defence Union, which provide indemnity to healthcare workers, said: ‘It’s clear that Parliament has run out of patience with the failure of successive governments to take control of soaring clinical negligence costs.

‘We need concrete action to end this huge financial drain on the NHS and the public purse.

‘Capping legal fees for lower value clinical negligence cases can’t come soon enough to control spiralling claimant legal fees.’

A spokesperson for the Department of Health and Social Care said: ‘In the Ten Year Health Plan, to tackle the rising costs of clinical negligence and to improve the system, we asked David Lock KC to carry out a review, so every penny can be spent on patient care.

‘We know there is much more to do but we are determined to make sure the NHS is the safest in the world.’

An NHS England spokesperson said its staff ‘work incredibly hard to keep patients safe’ but ‘there is more to do to tackle safety issues and improve care for many families’.