This comes as negligence claims for medical services related to brain injury and cerebral palsy have doubled in the past decade, rising from nearly £1.5 billion in 2013-14 to nearly £3 billion in 2022-23. This was in response to the
NHS England is currently carrying out an independent obstetric examination at Nottingham University Hospitals, believed to be the largest of its kind ever, following a spate of infant deaths and injuries at the trust. .
At the same time, the health service is scrambling to address “significant financial challenges” caused by 10 months of strike action to reduce long waiting times for cancer and other emergency treatments.
The Association of British Insurers said the current “discount rates” make compensation payments “much more expensive”, with payouts reaching “tens of millions of pounds for a single claim”. “It needs to be factored into the cost of insurance premiums,” he said.
Car insurance premiums reached record highs last year on the back of double-digit inflation, while home insurance costs rose by more than a third after a year of extreme weather.
In a memo on the issue, the industry group said: “We believe that UK interest rates should be reassessed to better reflect the real returns that low-risk investors have accumulated in lump sums, and we have been working to respond to calls for evidence. ” The decision will be notified this year. This issue not only affects our industry, but also public bodies that pay similar compensation, including the NHS. ”
Together with other industry representatives, this will be reflected in a formal review of the mechanism scheduled for July. NHS Reform will also submit a response to the consultation, but has not yet said whether it will support the fee changes.
NFU Mutual, a major insurance company for the agricultural industry – which has the highest fatality rate of any major industry sector, according to health and safety executives – also supports calls for rate changes.
A final decision on interest rates is expected to be taken by the end of the year, following consultation between the Chancellor of Justice Alex Chalk and the Treasury.
A Ministry of Justice spokesperson said: “The government will adhere to the principle of full compensation and ensure that those seriously injured receive compensation that meets their current and future needs – nothing more, nothing less.”
“Evidence is currently being sought as any decision to change interest rates must be made in consultation with independent experts. Once this matter is concluded, we will begin the next steps.”
