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Clinical Indemnities Reform

Volume 746: debated on Thursday 7 March 2024

In December 2022, I reported on the steps we are taking to respond to the findings of the inquiry into the issues raised by disgraced surgeon, Ian Paterson. Today, I am reporting further progress on recommendation 10 of the inquiry report, which identified shortcomings in the clinical negligence cover system.

Clinical negligence cover is the system that enables patients to receive compensation if they are harmed during treatment through the cover held by regulated healthcare professionals such as doctors, nurses and dentists. The inquiry highlighted that Paterson’s private patients were unable to access compensation for the harm caused by his actions due to gaps in clinical negligence cover in the independent sector. These gaps do not occur in the NHS where cover is via a state scheme.

The Government’s implementation update on the inquiry’s recommendations included proposed policy options for recommendation 10. One of the policy options was to make the system more transparent through safeguards, such as the introduction of a code of practice for medical defence organisations which provide a particular type of clinical negligence cover called discretionary indemnity that many healthcare professionals purchase. Unlike regulated insurance, where terms and conditions are set out contractually, discretionary indemnity allows for discretion to be applied to accept or refuse claims.

Following engagement with patients and the wider sector last year, I am pleased that medical defence organisations propose to implement a sector-led code of practice by end of 2024. The aim of this code is to provide greater transparency around this system of discretionary indemnity.

For example, there will be more information on how decisions are made to assist healthcare professionals to pay patients compensation. The code will include an escalation procedure with an independent review of disputed claims assistance decisions. Importantly, the code will now offer healthcare professionals information on the basis of any decisions to decline claims.

We welcome the code as a meaningful step forward. The Department of Health and Social Care will evaluate its implementation, including the long-term impact on patients and healthcare professionals, to determine whether further intervention is required. I will provide an update on further steps to reform the clinical negligence cover system, such as addressing cover for criminal acts or when a healthcare professional has otherwise worked outside the terms of their cover, in due course.

Alongside this update, the report on a survey that the Government commissioned IFF Research to carry out into healthcare professionals’ clinical indemnity arrangements will also be published. A copy of the report will be placed in the Library of both Houses.