On 30 January 2026, the House of Commons Public Accounts Committee (PAC) published its long-awaited report Costs of Clinical Negligence. While few in healthcare or medico-legal practice will be surprised by its conclusions, the report is notable for the strength of its criticism of government inaction, the breadth of its recommendations, and the urgency with which it calls for reform.
This article explains what the report is, why it was prepared, what it says—particularly its recommendations—and what key stakeholders should be doing now.
What is the PAC and why this report matters
The Public Accounts Committee is Parliament’s principal body for scrutinising public expenditure and value for money. It does not make policy, but its reports carry significant political and practical weight, particularly where there has been repeated failure to act.
The PAC has examined clinical negligence before, most notably in reports in 2002 and 2017, and again in its recent reviews of the Department of Health and Social Care’s (DHSC) annual accounts. The 2026 report follows a National Audit Office (NAO) investigation last year and evidence sessions with DHSC, NHS England and NHS Resolution.
The well-known backdrop is stark. Clinical negligence is now the second largest liability on the government’s balance sheet, exceeded only by nuclear decommissioning. At a time when the NHS is being asked to make savings of at least £1 billion over the next three years, the PAC’s central message is that rising negligence costs are diverting money away from frontline care—and that this has been allowed to continue for far too long.
The scale of the problem
The figures set out in the report are sobering:
• The total provision for clinical negligence in England has risen to £60 billion.
• Annual settlement costs have tripled since 2006–07, reaching £3.6 billion in 2024–25, and are forecast to exceed £4 billion p.a. by the end of the decade.
• A very small number of high-value claims—predominantly obstetric brain injury cases—account for a disproportionate share of costs, with an average value of £11.2 million per claim.
• Legal costs remain a major concern, particularly in lower-value cases where costs can be almost four times the damages paid.
Behind these numbers, the PAC repeatedly emphasises, lie serious and often devastating incidents of patient harm.
Key themes and findings
Although the report ranges widely, several themes recur.
1. Failure of leadership and coordination
The PAC is highly critical of DHSC in successive governments, concluding that it has failed to take “any meaningful action” to tackle rising negligence costs despite years of warnings. Of particular concern is the Department’s reluctance to commit to reform while awaiting the outcome of an ongoing review by David Lock KC—without even being able to provide a completion date.
By contrast, NHS Resolution is praised for its more proactive approach, including increased use of early settlement, mediation and alternative dispute resolution.
2. Patient safety and the complaints system
The report unsurprisingly makes clear that preventing harm is the most effective way to reduce negligence costs. Yet the PAC finds the current patient safety landscape fragmented and overwhelmed by recommendations that are not translated into action.
The NHS complaints system is described as confusing and ineffective, with poor communication and delays often driving patients towards litigation simply to obtain answers or accountability. The PAC highlights evidence that early, compassionate responses—including explanations and apologies—can reduce both claim volumes and costs.
3. Data: “a plethora of data and no information”
Despite the NHS holding vast amounts of data on patient safety incidents and claims, the PAC concludes that this information is not being used effectively to identify trends or prevent recurrence. There is no coherent national system for learning from claims, and limited investment in analytics risks the NHS falling behind Claimant law firms increasingly using artificial intelligence.
4. Maternity care as a systemic failure
Maternity services inevitably receive scrutiny. The PAC links high-value claims to longstanding workforce, training and patient safety problems in maternity and neonatal care. While initiatives such as NHS Resolution’s Early Notification Scheme are welcomed, the Committee is clear that incremental measures are not enough without addressing systemic causes.
5. Legal costs and structural drivers of claims inflation
Two legal drivers receive sustained attention. First, disproportionate legal costs in low-value claims, and the failure to implement fixed recoverable costs reforms previously proposed. Secondly, the continued requirement—dating back to the Law Reform (Personal Injuries) Act 1948—to calculate damages on the assumption that future care will be privately funded, even where Claimants may later rely on NHS or publicly funded social care.
The PAC’s recommendations
The report contains a detailed and demanding set of recommendations, including that:
• DHSC must publish a clear operational plan to reduce claim volumes and costs, with measurable milestones.
• The David Lock KC review should be published in full within six months of completion.
• A national patient safety framework should be established, with clear targets and accountability.
• The NHS complaints system should be reformed to increase resolution without litigation.
• The NHS should estimate and track the cost of treating avoidable harm.
• A national system for sharing and analysing claims and safety data should be created, including exploration of AI tools.
• The Amos Review into maternity and neonatal services should be published promptly, alongside a clear action plan.
• Alternative, non-adversarial mechanisms for resolving lower-value claims should be developed, drawing on international models.
• The government should urgently clarify its position on fixed recoverable costs.
• DHSC should assess the financial impact of assuming private care in damages and consider legislative change to prevent double payment.
What should stakeholders do now?
For healthcare leaders, whether in the private sector as well as in the NHS, the report reinforces the need to treat patient safety, complaints handling and learning from harm as strategic priorities, not compliance exercises. Investment in staff training, culture, and early resolution mechanisms is no longer optional.
For clinicians, the report underlines the importance of candour, documentation and engagement with patients after adverse events. Many claims arise not solely from harm, but from how that harm is handled.
For NHS or med mal lawyers, and indemnifiers, the direction of travel is clear: greater emphasis on early resolution, alternative dispute mechanisms, data-driven risk identification and—potentially—significant reform to costs and damages frameworks. Stakeholders should engage constructively with consultations that are likely to follow, particularly on fixed recoverable costs and care models.
Finally, for policymakers, the PAC’s message is unequivocal. Further delay risks not only financial unsustainability, but continued harm to patients and yet further erosion of trust in the system. There may not be a single “silver bullet” solution, but the status quo is no longer defensible.
Conclusion
Last year I wrote extensively on the pressures faced by the health sector and the need for clinical negligence reform in many aspects. That there appears to have been little practical progress in a time of crisis is a disappointment that everyone will share. Whether the PAC’s report will mean this time will be different remains to be seen. However, for all involved in healthcare and clinical negligence, this report should be treated as the loudest call to action yet, rather than another warning filed and forgotten.