The Department of Health and Social Care consultation Appropriate clinical negligence cover proposes a requirement for all healthcare practitioners who are not covered by NHS indemnity to have insurance for clinical negligence claims. It suggests this would protect patients better than discretionary indemnity, while providing no evidence of concerns about discretionary indemnity - which, the consultation acknowledges, continues to serve doctors, dentists and patients well.
The MDU believes the consultation document is flawed in a number of ways, as set out in detail in our consultation response. Here is a summary of the main points members need to be aware of.
- The consultation suggests the proposed change would affect NHS dentists and private practitioners, but fails to take into account the many thousands of doctors and other healthcare practitioners who need indemnity for clinical negligence claims arising from non-NHS indemnified work. The list of this work is extensive and includes writing reports, medico-legal work and professional attendance at charity and sporting events - whether paid or voluntary. Mandating these healthcare practitioners to have insured indemnity will increase the costs substantially and is bound to have an impact on their ability and/or willingness to undertake such work, to the detriment of everyone.
- The consultation does not consider any of the disadvantages of insurance, such as exclusions and conditions that apply to current policies and which may prevent patients receiving compensation (see pages 32-34 of MDU response for examples).
- Insurance will cost substantially more (see MDU response from page 20).
- Regulated insurers can and do exit uneconomic lines of business and/or markets. This is well documented, as are the numbers of high profile collapses of insurers that have left policy holders needing to or unable to source alternative cover (see MDU response pages 3 and 4).
- The consultation fails to mention the surprise withdrawal of the insurer, the St Paul, from the clinical negligence market worldwide in 2001. It had been in the UK market for just over two years and left thousands of doctors and dentists without indemnity for their 'tail' (claims arising from incidents that happened during the time they had a policy that had not been notified). The regulatory protections related to insurance did not prevent the St Paul from acting in this way. Fortunately the medical defence organisations were able to take these practitioners back into membership and provide access to indemnity for their tail.
- The benefits of regulation, such as oversight by bodies like the Financial Conduct Authority, the ability to make complaints to the Financial Ombudsman Service, and the Financial Services Compensation Scheme, only apply to the extent there is a regulated policy. They don't stop insurers stipulating exclusions, financial and time limits or deciding to leave markets without providing cover. They also provide no guarantees that insurers will still be in the market and/or that a policy will still be valid if a claim is made 10, 20, 30 or more years after an incident - and clinical negligence claims are long-tail and often made many years after an incident.
- If insurance is mandated for clinical negligence claims it will be necessary to put in place a new mechanism to ensure healthcare practitioners hold policies from authorised providers, and that the policies' terms and conditions meet the objective of ensuring patients are compensated appropriately whenever they can prove negligence. This function could be performed by one or more of the healthcare professional regulators (as the Solicitors Regulation Authority does for solicitors) or it may be necessary to set up an entirely new body. Either way, it seems inescapable that healthcare practitioners will have to fund its setting up and continued functioning.
The MDU response poses a number of questions the consultation should have addressed, as they are obvious situations that will arise if insurance is mandated. It is imperative that any doctors, dentists or other healthcare practitioners whom the government may force to have insurance receive satisfactory answers and know what will happen.
- If the claim falls foul of an exclusion or condition of the policy.
- If insured practitioners cannot afford to continue a policy and/or pay for the run-off cover they need when leaving an insurer to provide the necessary compensation required by patients.
- Where insured practitioners did not purchase insurance with sufficient limits (money and/or time) to provide the necessary compensation required by patients.
- Where a regulated insurer suddenly leaves the market and large numbers of practitioners are then not able buy and/or could not afford run-off cover.
- Even if practitioners are theoretically able to buy some run-off, what will happen where such run-off cover is limited in money and/or time as it inevitably will be, leaving practitioners without cover to provide the necessary compensation required by patients?
- If, as seems likely, there is a lack of insurers in the regulated market with an appetite to write cover (or cover that is available at an accessible premium for practitioners) for business that will not be capable of meeting shareholder returns.
The proposals in the consultation could have a substantial financial and professional impact on all the MDU's members. We urge you to read it and to submit comments before the closing date of 28 February. Read the MDU's full submission to the consultation here.
This guidance was correct at publication 25/02/2019. It is intended as general guidance for members only. If you are a member and need specific advice relating to your own circumstances, please contact one of our advisers.