The Medical Protection Society (MPS) has calculated the full impact of the decision to cut the discount rate applied to personal injury pay-outs, warning that awards - often worth millions of pounds - will more than double as a result of the change.
Although the exact impact on GP fees has not been defined, the MPS said that – without ‘sufficient support’ from the government – this increase in costs ‘will need to be reflected in GP membership subscription rates’.
It comes after the justice secretary announced in February that the discount rate applied to personal injury pay-outs will be lowered from 2.5% to -0.75% – changes which set in towards the end of last month.
The MPS says that what was previously a £1m claim – including future care costs and other claims costs – against a GP will now cost £2.3m – while a £5m claim would now cost £12.8m.
GP fees may have to rise significantly to cover this multimillion pound increase in costs – a rise previously called 'catastrophic' by medicolegal defence organisations.
GP indemnity costs
The Medical Protection Society called on the DH to honour this promise and set out the details ‘as a matter of urgency’.
The DH has opened a consultation on how the personal injury discount rate should be set in the future.
Simon Kayll, CEO at the Medical Protection Society said: ‘We are extremely disappointed and concerned by the government’s recent decision to reduce the personal injury discount rate so significantly from 2.5% to -0.75%.
‘This decision has increased the cost of settling future loss claims against our members at a time when the cost of clinical negligence is already at a worryingly high level.
‘To illustrate, consider a 21-year-old woman requiring long-term care, but with a normal life expectancy, resulting from a GP's failure to diagnose a sub-arachnoid haemorrhage. A claim of £1m prior to 20 March (compromising of £700,000 of future care costs and £300,000 of other claims costs) would now, at the new discount rate of -0.75%, cost £2.3m.
'A similar claim at £5m would now cost £12.8m. We are already beginning to see the consequences of this decision to the cost burden on the NHS.
‘It is clear that the case for a whole package of legal reforms to tackle the spiralling cost of clinical negligence is becoming ever more pressing.’