All clinical negligence claims are managed and accounted for by the NHS Litigation Authority. In arriving at its valuation of provisions when constructing its own annual accounts the authority effectively reviews the value of individual reported claims against the national health service.
This review is part of the continuous legal process adopted by the authority and includes an assessment of the likely timing of settlement of each claim, ie the point at which any damages payable are likely to be agreed along with associated third party costs. For claims not yet reported but where the negligent incident is considered to have already occurred the authority makes a global incurred but not reported (IBNR) provision in its accounts. This IBNR provision is an actuarially assessed value based upon extensive data, held by the authority, relating to the level of reporting of negligent incidents within the English NHS.
The value of this IBNR provision is also subject to an assessment of likely timing both in regard to when the claims are likely to become reported but also when they are likely to settle.
Essentially the authority then combines the individual claims data for all known claims with the global IBNR calculation in order to arrive at a forecast regarding the future timing and value of the settlement of claims against the NHS and it is these results which are reported within paragraph 21 on page 67.
The reporting of clinical negligence provisions referred to in paragraph 21 are essentially data reported from the activities of the NHS Litigation Authority. There are several reasons for the increases in value of clinical negligence provisions in any given financial period and during 2006-07 the main ones were:
the value of new claims reported to the authority where the negligent treatment had been delivered in the same financial period, ie where a patient has brought a claim for negligence in the same financial year that they allege negligent treatment. (Claims reported in 2006-07 where the negligent treatment was in an earlier financial year would already have been provided for in the accounts of the authority as incurred but not reported (IBNR));
where the value of existing claims has required alteration due to improved or further knowledge regarding the individual claim, eg where the courts have established new values for specific heads of damage or where original valuations excluded damage which is subsequently agreed to be relevant through the litigation process; and
actuarial review of IBNR suggests that forecast values of claims to be reported in the future require amendment, for example because claim reporting patterns appear to suggest more claims than originally forecast are being reported for a particular financial period or periods.