Consultation outcome

Appropriate clinical negligence cover: summary of responses

Updated 15 December 2022

Introduction

This document provides a summary of the responses to the government’s consultation on appropriate clinical negligence cover for regulated healthcare professionals, which ran from December 2018 to February 2019. These responses are from stakeholders and do not represent government policy.

Since the publication of the consultation, further related concerns regarding the wider indemnity market in general have been raised following the 2020 Report of the independent inquiry into the issues raised by Paterson. The report included concerns about patients not being able to access appropriate compensation for injuries due to the criminal actions of a regulated healthcare professional. The government published its response in December 2021.

Background

Every healthcare professional, whether they work in the NHS or the private sector, owes a duty of care to act in the best interest of their patients. Healthcare providers must get the basic qualities of care – safety, effectiveness and patient experience – right every time. There are some unfortunate circumstances, however, where patients and families are harmed, directly or indirectly, by the negligence of a professional.

Clinical negligence arises where there is a breach of this common law duty of care owed to a patient by professionals or by others acting on their instruction, where decisions, judgements or omissions cause harm or personal injury to a patient. If a patient has suffered harm or personal injury as a result of clinical negligence, the patient or their representative may make a claim for damages against the clinicians or their employers.

All regulated healthcare professionals (hereafter referred to as professionals) who wish to practise in the UK are legally required to hold appropriate clinical negligence indemnity cover. This cover pays for the compensation costs and legal fees awarded to patients in cases of clinical negligence. Professionals can be covered in several different ways:

• a state scheme that indemnifies them or their employer
• an insurance policy
• a discretionary indemnity arrangement
• or a combination of these 3

NHS hospital staff in England meet the requirement to hold appropriate cover for their work for their NHS trust through their trust’s membership of the Clinical Negligence Scheme for Trusts (CNST), a state indemnity scheme administered by NHS Resolution.

Historically, prior to 2019, clinical negligence cover outside the scope of CNST had been provided by discretionary indemnity providers, the largest of which are medical defence organisations (MDOs), and by insurance companies. MDOs and other discretionary indemnity providers, unlike insurance providers, are not subject to prudential and financial conduct regulation in respect of the indemnity they provide. Further information can be found in the original consultation document on appropriate clinical negligence cover.

At the time the consultation was launched, general practitioners (GPs) were required to purchase their own indemnity, with the majority purchasing their cover from one of the MDOs – see the Findings from the general practitioners indemnity survey (November 2018). However, rising indemnity costs for the GP workforce was a great source of concern for GPs, and was impacting on the recruitment and retention of the workforce.

In addition, there were concerns relating to the discretionary nature of the indemnity products provided by MDOs. There was a risk that an MDO could use its discretion to not indemnify a claim, potentially leaving GPs personally liable for compensation costs, and patients potentially without appropriate compensation.

To address this, the Secretary of State for Health announced plans in October 2017 to introduce a state-backed indemnity scheme for general practice in England.

The Clinical Negligence Scheme for General Practice (CNSGP) was launched in April 2019 covering new clinical negligence liabilities relating to NHS work undertaken by staff working in general practice in England from this date.

A further state scheme, the Existing Liabilities Scheme for General Practice (ELSGP), was introduced in April 2020. This scheme covers the existing liabilities of NHS general practice arising from any pre-April 2019 acts and omissions by members, or former members, of an MDO that had entered into contractual arrangements with the Secretary of State. Since the launch of ELSGP, contractual arrangements have been agreed with the Medical and Dental Defence Union of Scotland (MDDUS) and the Medical Protection Society (MPS).

In May 2018, the Welsh Government also announced its intention to introduce a state scheme for general practice in Wales, which was subsequently introduced in April 2019. At the time of the publication of this consultation, the Department of Health and Social Care (DHSC) understood that the cost of clinical negligence cover was generally lower in Scotland, and the Scottish Government was considering its position on the future of general practice indemnity. In Northern Ireland, the Department of Health was considering general practice indemnity in order to identify appropriate action and support the continued sustainability of GP services.

Despite these schemes being developed for general practice, there were concerns about the clinical negligence cover held by professionals practising in the UK who are not covered by any state-backed scheme. Specifically:

• NHS primary care dentistry and private dentistry
• private practice of medical doctors and other regulated professionals
• healthcare activity within the devolved administrations that is not covered by a state backed indemnity scheme
• professionals working in Crown dependencies who are regulated by UK regulators who may also be impacted

Concerns raised in the government’s consultation document

The consultation described the government’s concerns about the stability of the current forms of indemnity cover for those not covered by a state-backed scheme because:

• the indemnity providers who provide cover for many professionals do so under discretionary indemnity arrangements. Unlike commercial insurance companies, this means they have no contractual obligation to meet the cost of any claim against the professionals they cover
• such discretionary indemnity providers have no legal obligation to ensure they have the reserves to cover the cost of claims, raising the risk of a patient being unable to access appropriate compensation
• they do not have to disclose their full financial position, meaning that professionals may be unaware of the risks of their discretionary indemnity provider refusing to provide cover due to being in a poor financial position
• they are not subject to regulation on financial conduct and fair treatment – by the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) or otherwise – potentially leaving professionals at risk of unfair treatment

Since the publication of the consultation, further related concerns regarding the indemnity market have been raised following the Report of the independent inquiry into the issues raised by Paterson (2020) – hereafter referred to as ‘the Paterson inquiry report’. The report included concerns about patients not being able to access appropriate compensation for injuries due to the criminal actions of a regulated healthcare professional. The government published its response in December 2021.

In particular, the report noted that some private patients of the former consultant surgeon Ian Paterson struggled to access compensation and were therefore disadvantaged in comparison to patients treated by Paterson under the NHS, who received compensation through CNST.

The report made the following recommendation regarding indemnity arrangements:

That the government should, as a matter of urgency, reform the current regulation of indemnity products for healthcare professionals, in light of the serious shortcomings identified by the inquiry, and introduce a nationwide safety net to ensure patients are not disadvantaged.

The consultation

The DHSC ran a consultation on appropriate clinical negligence cover for regulated healthcare professionals that was aimed at collecting stakeholders’ views on government proposals on how to address the issues identified above. The consultation sought views on 2 options, to:

• leave arrangements as they are (option 1)
• change legislation to ensure that all regulated professionals in the UK not covered by a state-backed indemnity scheme hold appropriate clinical negligence cover that is subject to appropriate supervision – in the case of UK insurers, by the FCA and PRA (option 2)

Option 2 was the government’s preferred option, and the government sought views on whether this option achieved the following objectives of ensuring that:

• patients harmed by the negligence of regulated professionals can access appropriate compensation
• regulated professionals hold stable and sufficiently funded clinical negligence cover, thereby reducing potential risks of prohibitive costs to the healthcare workforce and the patients they treat failing to access appropriate compensation
• regulated professionals have greater clarity and confidence about the security and terms of their cover, as well as suitable patient protection in the event of a dispute with their indemnity provider
• patients have greater clarity and confidence of their recourse to any compensation

The consultation was published online, and people were able to respond online, via email or by post.

There were 101 responses to the consultation, which came from the following respondent groups:

• professional bodies, unions and associations for professionals (hereafter referred to as professional bodies), a small number of which also provide discretionary indemnity and insurance products
• insurance and finance-related associations
• dentists
• doctors
• lawyers and law firms
• general public
• regulators
• other medical practitioners
• MDOs
• public sector organisations
• independent sector providers

51 responses were received online, and 50 responses were received via email, with one respondent providing additional information by post.

Our approach

This summary draws out qualitative and quantitative data from the responses received to each question asked. Quantitative data has been presented as percentages, typically summarised in a table, where totals may not sum to 100% due to rounding.

To reduce the risk of confidential personal and organisational data disclosure, the summary tables present the responses as a proportion of each type of respondent that directly answered the question. This is instead of giving the figure as a proportion of total respondents to the whole consultation.

To retain some indication of which groups of respondents provided more responses, the tables are ordered from most responses (top of each table) to least responses (bottom of each table).

In some cases, the figures in the summary tables have been suppressed. This is because the number of respondents in these categories is very small, and this increases the risk that the summary information presented in the table could be disclosive.

Further qualitative data has been shared in the narrative in terms of the themes that have emerged for each question.

Additional detail relating to our approach can be found in Annex A.

A glossary of terms can be found in Annex B.

Overview of responses

The summaries for each question from the responses we received are reported below. This is followed by a more comprehensive analysis of responses to each individual question asked in the consultation.

The question numbers match those in the original consultation document.

Question 6.1

What are your views on the proposed options for meeting the government’s policy objectives?

The majority of respondents who answered this question were in support of the government’s preferred option, option 2, with greatest support coming from insurance and finance-related associations, lawyers and law firms, the general public, public sector organisations, and independent providers.

A minority of respondents showed support for option 1. This included MDOs, the general public, and insurance and finance-related associations.

Question 6.2

What are your views on the potential costs and benefits of these options, for example, the familiarisation and administrative costs for individuals, businesses, and other groups, in complying with potential changes to regulation?

Option 1

Comments in support of option 1 noted the flexibility of cover that discretionary indemnity provides and the additional member benefits (such as medico-legal advice) that may not be available with a regulated insurance product. Respondents also highlighted that, unlike insurance products, discretionary indemnity products did not have a cap, a limit or excesses.

In terms of costs, respondents commented that:

• there is lack of recourse to appeal for professionals if support to indemnify a claim were to be declined
• there is uncertainty surrounding discretion and when it is used
• independent sector doctors are penalised by being charged more for indemnity cover than their NHS counterparts

Option 2

Respondents in support of option 2 argued that the benefits outweighed any costs, with perceived benefits being:

• greater consumer confidence
• increased transparency for professionals and patients
• a more stable and reliable indemnity market
• greater security and certainty of cover

In terms of costs, the most common theme was concern about increased costs associated with potential changes in regulation, with respondents highlighting additional costs of Insurance Premium Tax, an ombudsmen levy, more administration, reporting and auditing. Respondents expressed concern that these costs would be passed onto patients, thereby driving up the price of independent healthcare.

Question 6.3

Are there any other options that the government should consider?

Respondents made the following additional proposals:

• expanding the scope of existing state schemes
• specifying minimum terms of cover a professional should hold, and the type of cover required
• addressing the rising costs of clinical negligence
• introducing a safety net support scheme for uninsured claims
• further educating professionals on the type of cover they hold

Question 6.4

Do you agree with the government’s preferred option 2 of ensuring that all regulated healthcare professionals in the UK hold appropriate clinical negligence cover that is subject to appropriate supervision by the FCA and PRA?

Most respondents who answered the question expressed agreement with the government’s preferred option 2. However, some of the respondents – including dentists, MDOs and professional bodies – said there was either no need for change or no evidence that any change was required, and that the government’s proposals did not entirely address the objectives set out in the consultation.

Question 6.5

Do you have further insight or data into the types of indemnity or insurance cover held by healthcare professionals?

Respondents shared the following information with us:

• many professionals receive clinical negligence cover via their employer
• discretionary indemnity providers can help to overturn actions taken by regulators that are viewed as incorrect
• concern was expressed that the consultation had not considered the impact of an insurer exiting the market
• the government should consider how unregulated healthcare professionals would be covered for clinical negligence

Question 6.6

In order to achieve this aim, what would be the benefits or implications of introducing regulation via the following means?

1. Changing professional standards so that professionals have to hold a regulated product in order to practise
2. Changing financial regulation so that any organisation offering clinical negligence cover would need to be authorised to do so
3. Changing both financial standards and professional regulation

1. Changing professional standards

The main benefits of changing professional standards suggested by respondents were that it would:

• offer a consistent standard of cover to professionals
• be more robust and effective than current arrangements
• offer certainty and clarity both to patients and professionals
• provide protection for individuals
• enable recourse to appeal

The main criticisms were that it was unnecessary, as regulations already required professionals to have appropriate indemnity cover, and that changes would bring additional costs due to the increased administration cost of insurance. Respondents also said there was a risk that a lack of understanding about indemnity arrangements among professionals could result in inadequate cover being purchased.

2. Changing financial regulation

The benefits of changing financial regulation were noted to be similar to the reported benefits of changing professional standards, as described above. The main concern was that it could increase costs.

3. Changing professional standards and financial regulation

The main benefits noted by respondents in relation to changing both professional standards and financial regulation was that it would both combine and maximise the benefits noted above.

In addition, respondents said it would ensure discretionary products were no longer available once changes were introduced, and that insurance products would ensure certainty of cover.

In terms of the implications, respondents stated that it could cause confusion between discretionary indemnity and insurance products as they would appear similar.

Question 6.7

Do you have a view on when regulations should come into force and should these involve a transitional period, considering the potential impact on indemnity providers and healthcare professionals?

The majority of respondents commented that a transition period would be beneficial if changes to regulations were to be introduced. There were varying views about how long the transition phase should be, ranging from up to 1 year to some recommending 2 years or longer.

Question 6.8

Are there any measures that could mitigate the potential risks to introducing regulation (in terms of a stable transition for regulated healthcare professionals and indemnity providers, mitigating potential cost impacts, and run-off cover)?

Respondents commented that the risks could be mitigated by:

• having a transition phase for implementing change
• ensuring that adequate run-off cover is in place for historic liabilities
• the government absorbing some of the increased costs of moving to a regulated product
• assisting professionals to understand the new requirements and indemnity products

Question 6.9

Specifically on the transition risk, are there any measures that could support the run-off of indemnity providers’ existing liabilities on a discretionary basis, especially given the potential interaction with overseas business set out in paragraph 5.21 [of the original consultation]?

This question had a low number of responses, but those that did answer proposed the following:

• discretionary indemnity providers could purchase loss portfolios (a reinsurance contract with an insurer to transfer risk), which could be facilitated with a reduction in Insurance Premium Tax
• using funds from Insurance Premium Tax to create a pool to be used like an insurer of last resort
• public funding could be required to support transition, with some arguing that this could include the government making a direct offer to underwrite costs

Question 6.10

Specifically given the potential risk with claims-made and claims-paid policies and indemnity arrangements, should the government specify the type of insurance or regulated product required for regulated healthcare professionals? This could take the form of:

a) claims-occurring cover
b) claims-made cover
c) claims-made cover with built-in run-off cover on either death or retirement from clinical practice
d) a combination of these

The majority (63%) of those that answered the question were of the opinion that the government should specify the type of insurance or regulated product required for regulated professionals, but there were different opinions on what form this should take.

On the form that cover should take, 21% of respondents who answered the question indicated a preference for option a (claims-occurring cover). There was minimal support among respondents for option b (claims-made cover without additional run-off); 22% of respondents who answered the question reported a preference for option c (claims-made cover with built in run-off cover); and 13% of respondents who answered the question reported a preference for option d (a combination of insurance or regulated product types).

Question 6.11

Related to the previous question (6.10), should the government and/or the professional healthcare regulators specify a minimum standard of insurance or regulated cover that should be required for regulated healthcare professionals? (For example, a minimum level of cover for each claim and in the aggregate, depending on the regulated healthcare professional.)

The majority of respondents who answered the question indicated that the government and/or professional healthcare regulators should specify a minimum standard of insurance or regulated cover for professionals. Specifically, dentists, independent sector providers, lawyers, law firms and members of the general public said that specifying a minimum standard of cover would provide clear guidance to professionals.

Those that did not agree with specifying a minimum standard were in the minority and cited increased costs as one reason for this.

Question 6.12

Are there any equality issues that arise (positive or negative) in relation to each of the options but, in particular, in relation to option 2 which is the government’s preferred option?

The majority of respondents who answered the question did not perceive any equality issues with the options outlined in the consultation.

However, some respondents argued that cost increases associated with changes could have the biggest impact on part-time workers, of which women and those at the end of their careers make up a significant proportion. The cost increases associated with the changes could also affect ethnic minority groups and older professionals.

Question 6.13

Is there any discriminatory impact (direct or indirect) arising from any of the proposed options that would engage the Equality Act 2010 and section 75 of the Northern Ireland Act 1998?

The majority of respondents who answered the question did not think that the government’s proposed option of introducing regulation would cause any discriminatory impact or engage the Equality Act 2010 or section 75 of the Northern Ireland Act 1998.

However, those respondents who did think there would be an impact stated that changes may affect:

• women, part-time workers and those with caring responsibilities
• certain age groups, particularly older professionals
• black African, black Caribbean, black other, or white and black African ethnic minority groups

Question 6.14

What is the impact, if any, on any group of persons who share one or more of the protected characteristics set out in section 149 of the Equality Act 2010 when compared with persons who do not share the protected characteristics?

Of those who answered the question, the majority of respondents reported they did not know, had no view or there were no known impacts of the government’s proposals on groups or persons with one or more of the protected characteristics.

However, some respondents said there could be an impact on certain groups of people. For example, part-time workers and those at the end of their careers may find the requirement to purchase run-off cover a heavy financial burden. It was highlighted that this may disproportionately affect women and those with caring responsibilities.

Question 6.15

What are the potential consequences to the conduct of clinical research of the proposals set out in this document?

The majority of respondents who answered the question said there would be no consequences to the conduct of clinical research as a result of the proposals set out, or they did not know if there would be an impact.

Respondents commented that the conduct of clinical research was very well monitored, and clinical trials were covered under a separate part of the regulated insurance market.

Analysis of responses

Question 6.1

What are your views on the proposed options for meeting the government’s policy objectives?

There were 95 responses to this question, with 93 providing a direct answer to the question (some responses in the survey did not always directly answer the questions).

Respondents were not asked to select their preferred option for this question, but in many cases support for an option could be inferred from the responses given.

Others gave an explicit preference or showed support for a particular option but with additional proposals. These preferences have been collated and reflected in this summary.

The ‘other’ column is made up of those that could not be categorised into showing support for one option over the other, but shared views on those options.

The majority of respondents who answered this question were in support of option 2 (either explicitly, inferred or combined with alternative proposals, as above), with the greatest support coming from insurance and finance-related associations (83%), lawyers and law firms (86%), the general public (83%), public sector organisations (67%) and independent sector providers (67%) respondent groups.

In relation to professionals, 57% of responses received from doctors supported option 2 compared with 18% of dentists who responded. However, dentists showed greater support for meeting the government’s objectives via alternative means (47%).

Table 1: proposed options to meet the government’s objectives (ordered by respondent type with most to least responses to this question)

Respondent Type	Supported option 1 or no change to current system	Supported option 2 (explicitly, inferred or suggested other proposals with this)	Suggested alternative proposals	Other
Professional bodies	6%	50%	33%	11%
Insurance and finance-related associations	6%	83%	0%	11%
Dentists	12%	18%	47%	24%
Doctors	0%	57%	14%	29%
Lawyers and law firms	0%	86%	0%	14%
General public	17%	83%	0%	0%
Regulators	0%	0%	20%	80%
Other medical practitioners	0%	40%	40%	20%
Medical defence organisations	(see note)	(see note)	(see note)	(see note)
Public sector organisations	0%	67%	0%	33%
Independent sector providers	0%	67%	33%	0%

Note: the figures in this row have been suppressed in accordance with DHSC statistical disclosure guidance. This is because the number of respondents in this category is very small, and this increases the risk that the summary information presented in the table could be disclosive.

Option 1: key points and comments

A minority of respondents showed explicit support for option 1. Support for this option from respondents who answered the question came from MDOs, the general public (17%), and insurance and finance-related associations (6%).

The most common reason for supporting option 1 was the view there was no evidence that change was necessary and that changes to regulation would negatively affect the healthcare workforce, particularly recruitment and retention of professionals.

Respondents were concerned that regulation could increase the cost of indemnity products and that insurance could create uncertainty about market coverage. It was also commented that insurance products were more restrictive than discretionary indemnity provision due to insurance products having clearly defined contractual limitations. One respondent commented that contractual cover could be worse for all professionals.

Other views were that:

• there was space for both discretionary indemnity and insurance products in the market
• awareness should be raised with professionals about the nature of these products
• more support should be provided to help them choose the most appropriate product to meet their individual circumstances

Option 2: key points and comments

Those that supported option 2 commented that regulation provided better outcomes for patients and professionals. Respondents from insurance, finance and related associations, professional bodies, dentists, and public sector organisations noted this would be achieved by:

• providing greater consistency and assurances for patients
• obliging the provider to pay out on claims
• creating increased stability and a level playing field in the market
• improving patient safety and providing greater protection for professionals

Insurance and finance-related associations and doctors also commented that current discretionary indemnity arrangements left professionals at risk and were not fair or ethical.

Respondents noted that there was no appeals process for discretionary indemnity and claimed that there was a general lack of clarity about discretionary indemnity provision and how often discretion was used to not indemnify claims. One doctor commented that professionals were often not aware of discretion at the point of purchase. It was argued, therefore, that regulation would bring further clarity around assessment of risk and ensure all indemnity providers were held to account.

Concern about the associated costs of indemnity was expressed by the general public, doctors, dentists, insurance, finance and related associations, public sector organisations, and professional bodies. Issues that were raised included:

• the rising costs of indemnity for doctors through paying higher subscriptions
• that option 1 was unaffordable for dentists
• that there was a risk of discretionary providers underfunding their incurred but not reported (IBNR) liabilities

Some respondents noted increased costs for insurance products, while others noted that changes to regulation could bring increased competition, which could counteract increased prices.

Question 6.2

What are your views on the potential costs and benefits of these options, for example, the familiarisation and administrative costs for individuals, businesses, and other groups, in complying with potential changes to regulation?

There were 78 responses to this question, with 71 providing a direct answer. Respondents commented more broadly on advantages and disadvantages of each option rather than just costs and benefits. Their comments are reflected in the summary below.

Overall, respondents made more comments about the possible costs and benefits of option 2 than for option 1.

Option 1: leave arrangements as they are

Benefits of option 1

Comments in support of option 1 noted the flexibility of cover that discretionary indemnity provides and the additional member benefits (such as medico-legal advice) that may not be available from a regulated insurance product.

One respondent noted the long history of MDOs in the discretionary indemnity market and the specialist knowledge they have in this area, while another commented that, historically, discretion has only been used in some cases.

Respondents also highlighted that, unlike insurance products, discretionary indemnity products did not have a cap, limits or excesses.

Costs of option 1

In relation to possible costs, respondents reported the following:

• independent sector doctors are penalised under discretionary models of indemnity by being charged more for their indemnity cover than their NHS counterparts
• there is uncertainty surrounding discretion and when it is used
• lack of recourse for professionals to appeal if indemnity cover is declined by a provider
• option 1 creates a risk of insufficient cover for patients, and the potential for professionals to be left personally liable for compensation costs

These comments were made by insurance and finance-related associations, lawyers and law firms, professional bodies and public sector organisations.

Option 2: legislative change

By way of secondary legislation to ensure that regulated healthcare professionals in the UK (not covered by a state-backed scheme) hold appropriate clinical negligence cover that is subject to appropriate supervision by the FCA and PRA.

Benefits of option 2

28% of respondents to this question said that any costs were outweighed by the benefits of regulation. These responses focused on the perceived benefits of:

• greater consumer confidence
• increased transparency for professionals and patients
• a more stable and reliable indemnity market
• greater security and certainty of cover
• parity of provision between the state and independent sector providers
• reduced risk of financial loss for professionals in the current discretionary model

Contrary to the majority of respondents’ views (see below), a few respondents including lawyers, law firms and insurance, finance and related associations said that regulated insurance products were generally cheaper, and that competition could lead to a more competitive market.

One respondent who had switched from a discretionary indemnity product to an insurance product said the cost of their insurance was lower, with the additional benefits of clarity and certainty of their cover.

A few respondents, however, stated that further consideration was needed to address the issues with indemnity arrangements for professionals. For example, a few respondents including doctors, insurance and finance-related associations noted that a new system was necessary but that further information was needed to determine this.

Additionally, 2 respondents emphasised that the government should consider reforming legislation to address the escalating costs of clinical negligence damages, and that it should consider capping the legal fees for clinical negligence claims.

Costs of option 2

The most common theme was concern about increased costs associated with potential changes in regulation. This was mentioned in 52% of responses and specifically highlighted were additional costs such as Insurance Premium Tax, an ombudsmen levy and more administration, reporting and audit costs.

20% of respondents said these additional costs would lead to increased premiums for professionals, with a risk that they would get passed on to patients, thereby driving up the price of independent sector healthcare. Respondents stated this would have a detrimental impact by deterring independent practice, resulting in increased demand and costs to the NHS.

There was also concern that regulation would result in professionals finding it difficult to obtain adequate cover. 19% of respondents raised this as a possible consequence of option 2, with particular emphasis on professionals working in high-risk areas of medicine, or those who had made previous claims.

Some acknowledged that, because insurance policies had cover limits, professionals could hold policies with inadequate levels of cover, thereby potentially risking patient access to recourse.

Respondents from lawyers and law firms and professional bodies commented on the availability of the type of insurance product, arguing that occurrence-based cover was not financially viable and that the majority of cover available in a regulated market was claims-made. They also argued that this option would potentially create gaps in cover to patients if adequate run-off cover were not in place, or available, in the market.

Question 6.3

Are there any other options that the government should consider?

There were 77 responses to this question, with 75 providing a direct answer to the question.

A common theme in responses was the potential role that state indemnity schemes might play. Respondents, including dentists, lawyers and law firms, professional bodies and the general public, said that the government should consider expanding the scope of the existing state schemes. This included suggestions to make them freely available to all NHS services or to make the schemes commercially available.

Other comments were that the government’s objectives would be better achieved by introducing a state scheme for those harmed by accident, misadventure or clinical negligence, or by introducing a catastrophic injury fund.

Others commented that, instead of a state scheme, the government could meet its objectives through a properly regulated insurance market.

One suggestion was that the government should work with the market and brokers to help develop a product, and that the government should specify minimum terms of cover that professionals must hold and the type of cover required. Professional bodies and some professionals themselves suggested that any such regulatory change should ensure that there were no gaps in indemnity and insurance arrangements.

Some MDOs, however, suggested that they should be allowed to self-regulate by introducing a mutual code of conduct, arguing that this would include greater transparency of an MDO’s financial position so it is clear they hold sufficient reserves.

Another emerging theme was that the government should focus on and deal with the rising costs of indemnity due to the increasing volume and costs of claims. Respondents, including professional bodies, MDOs and dentists, suggested that changing legislation relating to clinical negligence claims would make a notable difference. Specific suggestions included changing rules regarding ‘no win, no fee’ claims as well as changing the requirement for costs of compensation to be calculated via independent sector rates.

A less common theme was that, rather than regulations requiring individuals to be responsible for sourcing their own professional indemnity, employers should instead provide indemnity for their employees.

One suggestion was to introduce a safety net support scheme to provide a funding route of last resort for uncovered claims. Respondents said this might be funded by a levy placed on insurers and/or MDOs in a similar way to the Motor Insurers’ Bureau for uninsured driver claims. These suggestions came from a range of respondents including MDOs, professional bodies as well as insurance and finance-related associations.

Finally, respondents suggested more work should be done to educate professionals about the indemnity cover they hold and what they might require from an indemnity product. It was commented that there was not always enough clarity regarding the terms or meaning of cover held by professionals.

Question 6.4

Do you agree with the government’s preferred option 2 of ensuring that all regulated healthcare professionals in the UK hold appropriate clinical negligence cover that is subject to appropriate supervision by the FCA and PRA?

There were 85 responses to this question, with all 85 providing a direct answer to the question.

Table 2: breakdown of responses to question of whether respondents agreed with the government’s preferred option 2 approach (ordered by respondent type with most to least responses to this question)

Respondent type	Yes	No	Don’t know	No or don’t know	No explicit view
Dentists	58%	26%	11%	5%	0%
Professional bodies	65%	12%	0%	0%	24%
Insurance and finance-related associations	93%	7%	0%	0%	0%
General public	86%	14%	0%	0%	0%
Doctors	67%	17%	17%	0%	0%
Lawyers and law firms	83%	0%	0%	0%	17%
Medical defence organisations	(see note)	(see note)	(see note)	(see note)	(see note)
Regulators	67%	0%	0%	0%	33%
Other medical practitioners	100%	0%	0%	0%	0%
Independent sector providers	67%	0%	0%	0%	33%
Public sector organisations	100%	0%	0%	0%	0%

Note: the figures in this row have been suppressed in accordance with DHSC statistical disclosure guidance. This is because the number of respondents in this category is very small, and this increases the risk that the summary information presented in the table could be disclosive.

As shown above, most respondents from each respondent group that answered the question (except MDOs) expressed agreement with the government’s preferred option 2, providing reasons such as certainty of cover for professionals and patients, and stating that discretionary indemnity was not fit for purpose.

Some respondents made specific comments supporting the introduction of regulation by the FCA and the PRA. Insurance and finance-related associations, professional bodies and doctors noted that the government’s proposal could help tighten current regulations and ensure the financial reserves of bodies offering clinical negligence cover is adequate.

However, not all respondents shared this view. Respondents from other groups, including dentists, MDOs and professional bodies, said there was either no need for change or no proof that any change was required, and that the government’s proposals did not entirely address the objectives set out in the consultation.

These respondents highlighted that professional regulatory bodies were currently in place to regulate cover, and that introducing financial regulation by the FCA and PRA alone would not necessarily achieve the government’s aims. In addition, they argued that FCA and PRA regulation had no influence on the terms and conditions of policies individuals take out and that existing professional regulators may not have the required experience or understanding to perform this function. It was also stated that the proposed change may lead to instances where some professionals are excluded from, or find it harder to, obtain cover.

Finally, concern was expressed that changes must be affordable and funding these regulations could lead to increased costs for professionals. Respondents noted in particular that for any regulations, ‘appropriate cover’ would need to be defined.

Question 6.5

Do you have further insight or data into the types of indemnity or insurance cover held by healthcare professionals?

There were 51 responses to this question, with 50 providing a direct answer to the question.

Respondents shared the following information:

• many professionals now receive cover via their employer
• discretionary indemnity providers help to overturn actions taken by regulators that are viewed as incorrect
• concern was expressed that the consultation had not considered the impact of an insurer exiting the market
• that the government needed to consider how unregulated healthcare professionals would be covered

Other respondents offered to share further insights regarding the indemnity market and other information under appropriate confidentiality agreements.

Question 6.6

In order to achieve this aim, what would be the benefits or implications of introducing regulation via the following means?

1. Changing professional standards so that professionals have to hold a regulated product in order to practise
2. Changing financial regulation so that any organisation offering clinical negligence cover would need to be authorised to do so
3. Changing both financial standards and professional regulation

There were 78 responses to this question, with 69 providing a direct answer to the question.

1. Changing professional standards

The main themes emerging were that changing professional standards would:

• offer a consistent standard of cover to professionals
• be more robust and effective
• offer certainty and clarity to both patients and professionals
• provide protection for individuals
• enable recourse to appeal

These comments were received from lawyers and law firms, insurance and finance-related associations, professional bodies, dentists, and the general public. One additional point made by a regulator was that such changes would align the UK with regulatory requirements in other regions and countries, such as the EU and Australia.

Others argued that it was unnecessary to change professional standards as regulations already required professionals to have adequate indemnity cover while changes would bring additional costs due to the increased administration cost of insurance.

Respondents also said there was a risk that a lack of understanding about indemnity arrangements among professionals would allow inadequate cover to be purchased.

Additional comments noted that professionals were already highly regulated and opposed further regulation, because of the additional burden.

2. Changing financial regulation

The main benefits identified by respondents were similar to those noted above – that changing financial regulation could:

• improve confidence of cover for patients and professionals
• add transparency of cover
• ensure a consistent standard
• provide a safeguard for patients and professionals by allowing a route of complaint if cover fell short

These comments were received from insurance and finance-related associations, public sector organisations, lawyers and law firms, and dentists.

However, concern was expressed that changing financial regulation could increase costs for professionals.

Additionally, respondents from professional bodies, lawyers and law firms believed it would still allow professionals to purchase discretionary indemnity from companies based outside the UK, and that solely amending financial regulation would not address the key issues and achieve the government’s objectives.

Other general comments were that the financial regulation option was disproportionate to the issue at hand and that there would be no benefits considering the increased costs.

3. Changing professional standards and financial regulation

Respondents noted that there were benefits from combining financial and professional regulation – that such an option would ensure that discretionary products were no longer available and that there would be certainty of cover from insurance products.

In terms of implications, professional bodies noted that financial and professional regulation could cause confusion between discretionary indemnity and insurance products due to similarities.

Dentists and professional bodies argued that, in addition to other salary pressures, these changes would bring additional costs for professionals, leading them to leave their respective professions.

There was also concern about the impact on professionals in Scotland and Northern Ireland, with a suggestion that an impact assessment would need to be carried out.

A frequently stated view by dentists was that MDOs should be regulated.

Question 6.7

Do you have a view on when regulations should come into force and should these involve a transitional period, considering the potential impact on indemnity providers and healthcare professionals?

There were 76 responses to this question, with 72 providing a direct answer to the question.

Some respondents said there was a lack of evidence from government to justify the need to introduce new regulation. This was noted by a range of respondents including insurance and finance-related associations, general public, dentists, and professional bodies. Respondents from these groups said there was no urgency to implement any changes, with one suggesting time should be taken to understand the implications of such a change and its wider impact, including in the devolved administrations. Others suggested changes should occur immediately with no transition period.

However, 65% of respondents who answered this question were in agreement that, if regulations were to be introduced, a transition period when implementing these changes would be useful, although there were differing opinions regarding the length of the transition period. 38% of respondents who answered this question indicated that change should occur as soon as possible and within a year. This was supported by several dentists as well as doctors and other medical professionals, insurance and finance-related associations, and professional bodies.

Another suggestion was to use a staggered approach. Independent sector providers, professional bodies, lawyers and law firms, doctors, dentists, and insurance and finance-related associations expressed preference for a transition of at least 12 months, with some proposing this should be up to 2 years or longer.

Respondents also highlighted the importance of ensuring the market and professionals impacted by the change had time to be trained on the new system, and indemnity products available to them, to enable them to adjust to change.

An additional point was made by public sector organisations as well as professional bodies and insurance and finance-related associations on the risk of disruption. They also highlighted the importance of not destabilising the indemnity providers through any changes.

Question 6.8

Are there any measures that could mitigate the potential risks to introducing regulation (in terms of a stable transition for regulated healthcare professionals and indemnity providers, mitigating potential cost impacts, and run-off cover)?

There were 68 responses to this question, with 58 providing a direct answer to the question.

One of the more common suggestions to mitigate risks – proposed by some dentists, public sector bodies, professional bodies, insurance and finance-related associations as well as independent sector providers – was to build in an appropriate transition period that would allow time for familiarisation with the new requirements and ensure the right structures were in place moving forward. There was also a suggestion that there should be an exemption from Insurance Premium Tax during this period.

In addition to these respondent groups, some MDOs and lawyers and law firms stated a need to ensure adequate run-off cover was in place to cover historic liabilities and that minimum terms of cover should be required.

Independent sector providers, professional bodies, public sector organisations, MDOs, and insurance and finance-related associations highlighted the need for clear communication and support to train professionals on regulation changes. This would ensure that they understand the regulatory requirements and terms of their indemnity cover, and that appropriate cover is in place before changes take effect.

Many respondents had previously expressed concerns that changes to regulation would increase costs for professionals. Dentists, MDOs, independent sector providers and professional bodies noted that management of costs would be an important factor to consider.

One suggestion was that the government might be able to absorb some of the costs involved in changes to regulation with additional funding being made available. Others suggested an extension of the state indemnity schemes, even temporarily, to mitigate many of the possible risks.

In addition to respondents from dentists and the general public, some MDOs identified the introduction of legal safeguards against claims and tort reform as a key action for the government. These respondents stressed the value of managing legal challenges on unsubstantiated claims and the subsequent costs.

Finally, some respondents said that a thorough analysis should be undertaken to understand the risks and their potential impact fully, including impacts on the devolved administrations. Their view was that no changes should be made until then.

Question 6.9

Specifically on the transition risk, are there any measures that could support the run-off of indemnity providers’ existing liabilities on a discretionary basis, especially given the potential interaction with overseas business set out in paragraph 5.21 [of the original consultation]?

There were 50 responses to this question, with 43 providing a direct answer to the question.

Approximately half of respondents said that they were unable to answer or did not have a view about what measures could support the run-off of existing liabilities on a discretionary basis. Those that did have a view suggested the following:

• discretionary indemnity providers could purchase loss portfolios with a drop in Insurance Premium Tax to support run-off
• using the money from Insurance Premium Tax to create a pool to be used like an insurer of last resort
• that public funding may be required to support transition, with some suggesting this may include the government making a direct offer to underwrite costs

These comments came from insurance and finance-related associations, professional bodies, the general public, independent sector providers, and dentists.

In contrast, the majority of the MDO respondents who answered this question said that it would be wrong to apply regulation retroactively and that historic liabilities should be left with their current provider to run off.

Question 6.10

Specifically given the potential risk with claims-made and claims-paid policies and indemnity arrangements, should the government specify the type of insurance or regulated product required for regulated healthcare professionals? This could take the form of:

a) claims-occurring cover
b) claims-made cover
c) claims-made cover with built-in run-off cover on either death or retirement from clinical practice
d) a combination of these

There were 70 responses, with 67 providing a direct answer to the question.

63% of those that answered the question were of the opinion that the government should specify the type of insurance or regulated product required for regulated professionals, although there was variation in opinions on what form this should take.

Table 3: breakdown of support across the respondent professions regarding the options of either the government specifying the type of insurance or regulated product required for healthcare professionals

Option	Percentage of respondents
Government should specify (no option preference)	4%
Supports option a	21%
Supports option b	1%
Supports option c	22%
Supports option d	13%
Government shouldn’t specify	25%
Don’t know or not applicable	7%
Other suggestion proposed	4%

21% of respondents who answered the question indicated a preference for option a, claims occurring cover, a view supported by members of the general public, MDOs and lawyers and law firms. Respondents commented that this option was very similar to CNST and would provide the most reassurance of the options suggested. This group also noted that claims-made cover often has limits on the amount of cover available which can be quickly reached.

There was minimal support among respondents for option b, claims-made cover (without additional run-off cover). An additional 25% of respondents who answered the question – made up of MDOs, independent sector providers, professional bodies, lawyers and law firms, insurance and finance-related associations, and dentists – said that the government should not specify the type of product required. There were comments that a diverse market was good for the changing needs of individual professionals and that the sector needed competition to offer the best range of cover.

22% of respondents who answered the question reported a preference for option c, claims-made cover with built in run-off cover. They argued that this option had most support from insurance and finance-related associations, but also from lawyers and law firms, doctors and the general public, with those in favour stating that this would be a simple and quick solution offering adequate protection.

Question 6.11

Related to the previous question (6.10), should the government and/or the professional healthcare regulators specify a minimum standard of insurance or regulated cover that should be required for regulated healthcare professionals? (For example, a minimum level of cover for each claim and in the aggregate, depending on the regulated healthcare professional.)

There were 67 responses to this question, with 65 providing a direct answer to the question.

The majority of respondents who answered the question indicated that the government and/or professional healthcare regulators should specify a minimum standard of insurance or regulated cover for regulated professionals.

As shown in Table 4 below, this support came from almost every category of respondent, with only the MDOs not showing overall agreement with this proposal. Specifically, dentists, independent sector providers, lawyers and law firms, and general public members reported that specifying a minimum standard of cover would provide clear guidance to professionals.

Table 4: breakdown of responses answering the question of whether the government and/or professional healthcare regulators should specify a minimum standard of insurance or regulated cover that should be required by healthcare professionals (ordered by respondent type with most to least responses to this question)

Respondent type	Yes	No	Don’t know	No explicit view
Insurance and finance-related associations	92%	8%	0%	0%
Professional bodies	73%	9%	0%	18%
Dentists	82%	9%	9%	0%
General public	86%	14%	0%	0%
Lawyers and law firms	100%	0%	0%	0%
Doctors	67%	17%	17%	0%
Medical defence organisations	(see note)	(see note)	(see note)	(see note)
Regulators	50%	0%	0%	50%
Other medical practitioners	100%	0%	0%	0%
Independent sector providers	100%	0%	0%	0%
Public sector organisations	100%	0%	0%	0%

Note: the figures in this row have been suppressed in accordance with DHSC statistical disclosure guidance. This is because the number of respondents in this category is very small, and this increases the risk that the summary information presented in the table could be disclosive.

Respondents from doctors, insurance and finance-related associations were among those to suggest that:

• any minimum standard should be dependent on the specific profession
• no upper limit should be set
• any set standards should be kept under regular review

It was also noted by one MDO that this approach could prevent a ‘race to the bottom’ in terms of cover offered. One lawyer or law firm also commented that the introduction of minimum standards would provide much needed certainty for the market and would be best if that standard included cover for criminal convictions.

However, some respondents commented that it would be difficult to legislate for different levels of cover per profession, with others reserving comment until there was information about the experience of regulators. Others suggested that it should be regulators that set the minimum standard rather than the government.

Respondents who did not agree with specifying a minimum standard were in the minority, but most notable among MDO respondents, with the majority of those that answered the question commenting this way. The predominant concerns related to potential increase in costs and a risk that such a standard could be inadequate when a claim occurred.

Question 6.12

Are there any equality issues that arise (positive or negative) in relation to each of the options but, in particular, in relation to option 2 which is the government’s preferred option?

There were 48 responses to this question, with 42 providing a direct answer to the question.

As shown in Table 5 below, the majority of respondents who answered the question did not perceive any equality issue with the options outlined in the consultation.

Table 5: breakdown of responses to question whether there are equality issues which may arise in relation to the government’s preferred option (option 2) as presented (ordered by respondent type with most to least responses to this question)

Respondent type	Yes	No	Don’t know	No explicit view
Insurance and finance-related associations	22%	67%	11%	0%
Professional bodies	25%	25%	25%	25%
Dentists	43%	43%	14%	0%
General public	20%	60%	20%	0%
Regulators	0%	100%	0%	0%
Doctors	0%	67%	33%	0%
Lawyers and law firms	33%	33%	0%	33%
Medical defence organisations	(see note)	(see note)	(see note)	(see note)
Public sector organisations	100%	0%	0%	0%
Other medical practitioners	0%	100%	0%	0%
Independent sector providers	0%	0%	0%	0%

Note: the figures in this row have been suppressed in accordance with DHSC statistical disclosure guidance. This is because the number of respondents in this category is very small, and this increases the risk that the summary information presented in the table could be disclosive.

Lawyers and law firms, insurance and finance-related associations, MDOs and professional bodies argued that proposed changes may promote equality and improve transparency in the system.

Other respondents highlighted potential impacts:

• cost increases associated with changes could have the biggest impact on part-time workers, of which women and those at the end of their careers make up a significant proportion
• changes could affect certain ethnic groups and ages of professionals, such as those nearing retirement

Several respondents also noted that the possible impact on equality issues would be clearer once further assessment had been completed, including an equalities impact assessment.

Question 6.13

Is there any discriminatory impact (direct or indirect) arising from any of the proposed options that would engage the Equality Act 2010 and section 75 of the Northern Ireland Act 1998?

There were 52 responses to this question, with 46 providing a direct answer to the question.

While the question was similar to 6.12, it made specific reference to protected characteristics mentioned in the Equality Act 2010, and section 75 of the Northern Ireland Act 1998. As Table 6 below shows, the majority of respondents who answered the question did not state that the government’s proposed option of introducing regulation would cause any discriminatory impact or engage the Equality Act 2010 or section 75 of the Northern Ireland Act 1998.

On the contrary, 45% of professional bodies said there would be an impact, as well as some MDOs, 33% of regulators, and 20% of the general public.

Some respondents commented that there would be indirect discrimination against women and part-time workers. This view was expressed by unions, who stated that women made up the majority of the NHS workforce and therefore would disproportionately be affected by increasing costs from the proposals.

It was also commented that part-time workers would be affected, particularly those with caring responsibilities who often have to manage work demands around their responsibilities.

Table 6: breakdown of responses to question whether there are any perceived risks of discriminatory impact in relation to the options outlined in the consultation (ordered by respondent type with most to least responses to this question)

Respondent type	Yes	No	Don’t know	No explicit view
Professional bodies	45%	9%	0%	45%
Insurance and finance-related associations	0%	89%	11%	0%
Dentists	0%	50%	50%	0%
General public	20%	60%	20%	0%
Doctors	0%	80%	0%	20%
Lawyers and law firms	0%	50%	25%	25%
Medical defence organisations	(see note)	(see note)	(see note)	(see note)
Regulators	33%	33%	0%	33%
Public sector organisations	0%	0%	0%	0%
Other medical practitioners	0%	0%	0%	0%
Independent sector providers	0%	0%	0%	0%

Note: the figures in this row have been suppressed in accordance with DHSC statistical disclosure guidance. This is because the number of respondents in this category is very small, and this increases the risk that the summary information presented in the table could be disclosive.

It was also commented that there may be an impact on professionals in certain age groups, as it was harder for practitioners who were older to get cover. One professional body commented that, compared with younger professionals, more older professionals obtain cover through a membership of a professional body.

This last point was also made in relation to certain ethnic groups. It was noted that there was a higher proportion of professionals who obtained cover through membership of a professional body if they were of black African, black Caribbean, black other, or white and black African ethnic minority groups. They argued these professionals would be disproportionately affected by regulation changes compared with professionals from other ethnic groups.

Question 6.14

What is the impact, if any, on any group of persons who share one or more of the protected characteristics set out in section 149 of the Equality Act 2010 when compared with persons who do not share the protected characteristics?

There were 44 responses to this question, with 40 providing a direct answer to the question.

Less than half of those who responded to this question said they either did not know, or had no view or comment to share.

Of those who answered the question, approximately half reported no known impacts of the government’s proposals on groups or persons with one or more of the protected characteristics. These comments were made by a wide range of respondent groups, including MDOs, the general public, insurance and finance-related associations, doctors, dentists, and lawyers and law firms.

However, some respondents said there would be an impact on certain groups of people, such as part-time workers and those at the end of their careers, who may find the requirement to purchase run-off cover a heavy financial burden. It was highlighted that this may disproportionately affect women and those with caring responsibilities.

Professional bodies as well as lawyers and law firms and insurance and finance-related associations suggested that a pro rata rate could be considered to overcome this issue and prevent people from paying for cover when it was not required.

It was further highlighted that, if a claims-made policy were required by the government, this would also have a notable impact on retired employees, those who were forced to retire on health grounds and those on maternity leave, who would have to purchase long periods of run-off cover.

Others wanted to reserve comment until a full impact and equalities impact assessment had been completed and published.

Question 6.15

What are the potential consequences to the conduct of clinical research of the proposals set out in this document?

There were 44 responses to this question, with 38 providing a direct answer to the question.

The majority of respondents who answered the question said that there would be no consequences to the conduct of clinical research of the proposals set out, while others said they did not know if there would be an impact.

Respondents commented that the conduct of clinical research was very well monitored and clinical trials were covered under a separate area of the regulated insurance market.

Some respondents said the changes to regulation would have a positive impact and/or lead to improvements. For example, it was mentioned that regulation may lead doctors to feel more comfortable trialling more innovative procedures, and that regulation would reinforce quality, safety and clarity of cover.

One additional comment was that the insurance market had the capacity and risk appetite to support the area of clinical research.

A few respondents who answered this question were concerned that the proposed changes would make research more costly, and that this would have a negative impact on the amount of research conducted.

Next steps

In December 2021, the government set out next steps on appropriate clinical negligence cover in its response to recommendation 10 of the Paterson inquiry report. We continue to work closely with stakeholders on these issues, taking account of the responses to this consultation along with wider evidence we are collecting.

The government will provide further updates on these issues in its wider progress reporting against the recommendations in the Paterson inquiry implementation update.

Annex A: methodology

The consultation was analysed on a question-by-question basis. The responses to each question have been read and summarised by a reviewer. The summary was subsequently quality assured by a different reviewer.

Respondents who answered the consultation online provided responses directly to each individual question. Some respondents who answered by email answered the questions also in this way, but some sent a single written response incorporating answers to the questions rather than responding to each question individually. For the latter, parts of a respondent’s response that were relevant to each question were considered as appropriate.

Each response, whether provided by an individual or an organisation, has been treated as a single response. There were 2 respondents who submitted 2 responses each. We have taken the content from both but treated and counted these as one response from each.

Responses were also assessed on the following criteria:

• whether a response was provided
• whether a response directly answered a particular question or whether relevant parts of the response could be allocated to answering each question

This approach was taken in case a response did not directly answer the question.

The responses received are summarised in quantitative and qualitative terms. Quantitative data has been presented in a table in % figures, though some rows in the tables do not always sum to 100% due to rounding.

To reduce the risk of confidential personal and organisational data disclosure, the tables in this summary show the responses as a proportion of each type of respondent that provided a direct answer to the question. This is instead of giving the figure as a proportion of total respondents to the whole consultation.

In each table, to retain information about groups with small numbers of respondents without risking disclosure, the type of respondent is ordered by the number of respondents who answered the question with the most respondents at the top and the least respondents at the bottom. The risk of this method is that it can make groups with large differences in the number of respondents seem more comparable. The only exception to this is Table 3. This has been shown as the total percentage of respondents who answered the question and were in favour of each option.

The responses received for each question have also been reviewed in order to draw out themes that we have then incorporated into the narrative for each question.

Annex B: glossary of terms

General terms

Indemnity

Security or protection against a loss or other financial burden. This provides compensation for a loss or liability that a party has incurred – in this document we are referring specifically to indemnity for clinical negligence (see below).

Professional indemnity

Security or protection for professionals against claims for loss or damage made by clients or third parties as a result of the impact of negligent services provided or negligent advice offered. In addition to clinical negligence indemnity cover (see below), this could include medico-legal services for healthcare professionals, for example.

Other terms

Claims-made cover

A claims-made insurance policy or discretionary indemnity provides coverage in respect of claims brought against a professional arising from acts that occurred during the policy or membership period, provided that the resulting claim is made and reported to the insurer or indemnity provider prior to the end of this period.

Once the policy or membership has lapsed (for example, if the healthcare professional switches insurance or indemnity provider or retires from practice), no cover will be offered in respect of any new claims not reported during the policy or membership period.

The professional will therefore need to purchase run-off cover to remain protected against any further claims that were accrued but not reported during their policy or membership period.

Claims-occurring (or occurrence-based) cover

A claims-occurring insurance policy or discretionary indemnity provides coverage for incidents of negligence that occur during the policy or membership period, regardless of when the claim for that negligence is made.

Claims-paid cover

A claims-paid insurance policy or discretionary indemnity provides cover on the same basis as claims-made cover, with the exception that claims will only be met if they are settled (as well as accrued and reported) during the policy or membership period.

Professionals with claims-paid cover will therefore also need to purchase run-off cover after the expiry of their policy or membership period, in order to remain protected against any claims that accrued but were not settled during this period.

Clinical negligence cover

Clinical negligence, in law, is an act or failure to act (omission) that does not meet the level of appropriate care expected, and results in injury or loss. If a doctor or healthcare professional is negligent when giving a patient medical treatment, this is called ‘clinical negligence’.

Clinical negligence indemnity cover is a form of professional indemnity against loss arising from clinical negligence claims. This cover pays for the compensation costs and legal fees awarded to patients in cases of clinical negligence. Professionals can be covered in several different ways:

• a state scheme that indemnifies them or their employer
• an insurance policy
• a discretionary indemnity arrangement
• a combination of these 3

Clinical Negligence Scheme for Trusts (CNST)

This scheme provides clinical negligence cover to providers of NHS services, NHS commissioners and health arm’s length bodies for claims arising from incidents involving clinical negligence. Contributions are collected from members to make settlements and administer claims on their behalf.

Contractual indemnity

This is a contractual obligation to compensate for some defined loss or damage by making a money payment.

Damages

In the context of clinical negligence, damages refer to the compensation to the patient for the damage, loss or injury they have suffered as result of the negligence of a healthcare professional.

The purpose of damages is to put the patient in the same position as they would have been but for the injury, loss or damage, so far as the payment of a sum of money can do so.

Discretionary indemnity

Clinical negligence indemnity where legal and financial assistance is provided at the discretion of the provider – that is, there is no contract between the professional and the provider.

Duty of care

Where a professional has assumed some sort of responsibility for a patient’s care, the law imposes a duty on the professional to act in accordance with the relevant standard of care. This is generally assessed to be the standard expected of an ‘ordinarily competent practitioner’ performing that task or role. Professionals will be expected to follow standards and conduct set by their professional regulator.

Financial conduct regulation

Conduct regulation requires financial firms to treat their customers fairly, and is based on the principles that financial markets should be honest, fair and effective so that consumers get a fair deal.

The Financial Conduct Authority (FCA) is responsible for conduct regulation in the UK.

Insurance Premium Tax

This is a tax on general insurance premiums. The standard rate is 12%.

NHS Constitution

The NHS Constitution for England sets out rights for patients, public and staff. It outlines NHS commitments to patients and staff, and the responsibilities that the public, patients and staff owe to one another to ensure that the NHS operates fairly and effectively.

All NHS bodies and private and third-sector providers supplying NHS services are required by law to take account of the constitution in their decisions and actions.

NHS Resolution

NHS Resolution is an arm’s length body of the Department of Health and Social Care with the purpose of providing expertise to the NHS on resolving concerns fairly, sharing learning for improvement, and preserving resources for patient care.

The main bulk of NHS Resolution’s workload is handling negligence claims on behalf of the members of its indemnity schemes (including the CNST), NHS organisations and independent sector providers of NHS care in England.

No win, no fee

A conditional fee arrangement where, if the compensation claim is unsuccessful, the claimant does not have to pay legal fees.

Occurrence-based cover

See Claims-occurring cover.

Professional regulatory bodies

The organisations responsible for protecting the public by:

• setting the standards of behaviour, competence, and education that professionals must meet
• dealing with concerns from patients, the public and others about professionals who are unfit to practise because of poor health, misconduct or poor performance
• keeping registers of health professionals who are fit to practise in the UK

The regulators have powers to initiate proceedings to prevent professionals from practising and to remove professionals from their registers if they consider this to be in the best interests of the public.

Prudential regulation

Prudential regulation rules require financial firms to hold sufficient capital and have adequate risk controls in place. UK insurers are closely supervised by the Prudential Regulation Authority (PRA) so that the PRA can intervene if they are not being run in a safe or sound way such as to protect policyholders adequately.

Regulated healthcare professional

A person who works in a healthcare profession regulated by statutory provision, who is required to register with the appropriate regulatory body and to meet the standards of practice set by those organisations.

There are 9 regulatory bodies responsible for regulating 32 professions in the UK. These are independent bodies overseen and scrutinised by the Professional Standards Authority for Health and Social Care (PSA).

All professionals who wish to practise in the UK are legally required as a condition of registration with the professional regulator (or, in the case of doctors, as a condition of the grant of a licence to practise) to hold appropriate clinical negligence cover (see above) for the risks of their practice, covering the costs of defending clinical negligence claims and damages awarded to patients.

Run-off cover

Run-off cover provides cover for claims where the adverse incident has already occurred but has not yet been reported prior to the expiry of the policy or membership period to which the run-off cover relates.

The cover could be renewed annually or, for a single payment, cover all past incidents whenever they are reported in the future.

This type of cover is required when a member of an MDO or policyholder of an insurer has either claims-made cover or claims-paid cover and either switches indemnifier or ceases to practise.