The Medical Defence Union (MDU) has warned that proposals to change the way compensation claims are calculated in Northern Ireland could have a potentially ruinous impact on NHS finances and on individual GPs.
Responding to a consultation on proposed changes to the personal injury discount rate (PIDR), Dr Matthew Lee, MDU professional services director, explained:
"The PIDR is used to calculate the sums awarded for long term care in clinical negligence claims and a lowering of the rate could have a dramatic impact on NHS funding and on GPs who are already struggling with the highest indemnity costs in the UK.
"If Northern Ireland implements a similar way of setting the PIDR as exists in England and Wales, or Scotland, compensation paid in high value claims could double or even treble in value. NHS GPs in Northern Ireland purchase their own professional indemnity to meet the costs of such claims and that would immediately become unaffordable under these proposals.
"We have experience of the disastrous effect on public services of a large drop in the PIDR. When the rate in England and Wales changed from 2.5% to -0.25% (at one point going as low as -0.75%), a claim that was valued at approximately £4.5m at the previous rate actually settled for £10.6m. And the proposals will be even more damaging for NHS finances. The chair of NHS Resolution, which runs the Clinical Negligence Scheme for Trusts in England, said in 2017 that the drop in the discount rate, 'added £4.7 billion, approximately 7.5%, to our claims provisions at March 2017 but will have a proportionally bigger impact on the claim payments we will make in 2017/18.'
"The Northern Ireland Executive should not go ahead with these proposals, which would have a devastating impact on GPs and the wider NHS. Research is urgently needed into how compensation awards are invested and what returns are achieved and this should inform government policy.
"We urge the Executive not to adopt a methodology which relies on unsubstantiated guesswork about investment returns. A low PIDR has a drastic effect on NHS finances and so the way it is set should be based on solid evidence about how awards are invested in practice."
This page was correct at publication on 17/08/2020. 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.