The Medical Defence Union (MDU), the UK’s leading medical defence organisation, has warned that plans to change the way compensation claims are calculated in Northern Ireland may lead to 'marked increases' in indemnity subscriptions for GPs.
The personal injury discount rate is currently set at 2.5% in Northern Ireland, but the Department of Justice is planning to change this to a new rate of minus 1.75% from 31 May. It has also introduced a bill to change the way the rate is set. The discount rate is used to calculate the sums needed for long term care in clinical negligence claims according to expected returns on investing an award.
Responding to the Committee for Justice's inquiry into the bill, Dr Matthew Lee, MDU professional services director said:
"The timing of this change could hardly be worse – after making such immense sacrifices in the fight against COVID-19 over the past 12 months, GPs in Northern Ireland now face marked increases in their indemnity subscriptions because of the government’s decision.
"A discount rate change of this magnitude will have a dramatic impact on health and social care funding and on hardworking GPs across Northern Ireland. GPs in Northern Ireland do not have state indemnity for claims and fund their own indemnity arrangements. They are already struggling with the highest indemnity costs in any part of the UK.
"To give you an indication of the impact on public service finances, when the rate in England and Wales changed from 2.5% to minus 0.25% (at one point going as low as minus 0.75%), a claim that was valued at approximately £4.5m at the previous rate actually settled for £10.6m.
"We are in discussions with the Department of Health about what actions could be taken by the Executive to shield primary care in Northern Ireland from the financial implications of this new rate. We are concerned that without steps being taken, NHS GPs could be forced to retire early or leave the profession. This is something the NHS can ill afford, especially in the midst of a pandemic, and would be undesirable for GPs and patients alike."
The MDU urged the Executive to adopt a different methodology to the one proposed as the discount rate has financial implications for the health service and taxpayers. The methodology should be based on research into how compensation claims are actually awarded and invested and what returns are achieved – none of which feature in the new proposed methodology.
This page was correct at publication on 04/05/2021. Any guidance 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.