Should GPs have NHS indemnity?

Christian Beadell a senior solicitor in the medical negligence department considers the difficult issue of rising GP indemnity costs.

A recent report from the MDU (here) noted the spiralling costs of professional indemnity was putting primary services at risk.

Currently, private GPs are currently not covered under NHS indemnity. NHS indemnity only provides cover for the actions or omissions of staff during the course of their employment (extended to vicarious liability for work done by university medical staff or research workers under honorary contracts).

Private GPs believe this should be extended to them also as their indemnity costs are rising and this could lead to increased drop-out rates from the profession.

The MDU has promised to get to the root causes of the indemnity rises. Similarly, NHS England has commenced wider work to address increasing costs and the RCGP also announced a new GP indemnity scheme with an estimated cost of approximately 33 million per year.

Much of the blame has been placed upon the Government decision to reduce the discount rate  from 2.5% per annum to -0.75% which came into force on 20 March 2017.  The discount rate serves to preserve the principle of 100% compensation for those injured to ensure that lump sum awards of compensation that they receive now for future losses, if invested appropriately, will be sufficient to pay for those costs which will arise in the future.  The recent review was based upon three year average yields on index-linked gilts and given the low investment return, led to the reduction from the previous rate. The last time the discount rate was reviewed was in 2001 when we were in a very different economic climate and some would say that this had given a significant windfall to the insurance industry over the years when lower damages awards were made despite them being insufficient to cover against all future losses.

At the time  the Discount Rate was introduced the then Lord Chancellor Liz Truss said, “as lord chancellor, I must make sure the right rate is set to compensate claimants. I am clear that this is the only legally acceptable rate I can set.”

The Government has bent to pressure from the insurance industry to review the discount rate again and as claimant lawyers we can only hope that the principle of full and fair compensation will be paramount to their considerations.  Nevertheless, if we want a system that respects such a fundamental principle,  due consideration needs to be given to the ability of private insurers to  indemnify such claims.  If GPs are driven away from the profession due to rising costs then the will be to no-ones benefit.

There is some merit to the MDU approach. It was stated by the Government at the time of the rate change that there would be appropriate funding to cover hospitals Clinical Negligence costs as well as meeting additional costs to GPs.

Whether some form of joint indemnity between the NHS and private insurers is the way forward is a matter of discussion, but my view is that we should start such debates from the position that the victims of medical accidents should always receive the compensation they deserve.