For immediate release: Monday, 27 February 2017
The Lord Chancellor, Liz Truss, has today announced a cut to the discount rate applied to personal injury claims from 2.5% to -0.75%. The effect will be an increase in the size of compensation payments, leading to significant new costs for the NHS and medical defence organisations (MDOs), such as the MDDUS.
MDOs are not-for-profit financial mutuals, wholly-owned by their medical and dental members. As such, the subscription rates they charge have to reflect their best actuarial estimate of the likely liabilities which they face. Today’s decision will lessen the impact of the efforts which MDDUS, working with the Department of Health, NHS England and others, have been making to restrain the cost pressures already in the pipeline because of the higher number of claims and the higher costs already associated with them.
Speaking after the announcement, MDDUS Chief Executive Chris Kenny said:
“Everybody agrees that those who suffer medical accidents should be properly and promptly compensated. The increase in claims awarded show that this is already happening.
“Today’s decision, based on a consultation undertaken in 2013, does not reflect that fact nor anything which has happened in the economy and healthcare in the intervening period – nor what is likely to occur in the coming years as a result of Brexit and other pressures. It takes no account of the interests of the NHS, facing acute financial challenges. It ignores the impact of unavoidably high indemnity fees on morale and recruitment in primary care. Future decisions simply must be more joined up.”
MDDUS believes three things are now essential:
- First, doctors and dentists must be fully protected from the cost of this decision. We welcome Government’s commitment to this for GPs in the first instance and will work closely with them to achieve it;
- Second, there must be no delay in producing proposals for the establishment of a better system for setting the rate. These must be radical in content and rapid in implementation, perhaps through the current Prison and Courts Bill;
- Finally, Government needs to produce timetabled proposals to address the wider issue of tort reform in parallel with changing the basis for setting the discount rate.
Kenny added: “We look forward to seeing specific action in each of these areas. In the short-term, however, we continue to explore the implications of the decision closely and do not discount any action which gives a reasonable prospect of achieving a better, fairer and more affordable deal for our members.”
For further information contact Richard Hendry on 0333 0434444 or 07976 272266, or email firstname.lastname@example.org.
Note to editors
MDDUS (The Medical and Dental Defence Union of Scotland) is a medical and dental defence organisation providing access to professional indemnity and expert medico- and dento-legal advice for doctors, dentists and other healthcare professionals throughout the UK.
For further information on MDDUS go to www.mddus.com.