His victims would, quite rightly, have expected to be compensated for his crimes. However, Paterson was covered by a discretionary medical negligence policy and the insurer decided not to cover his victims’ claims. This meant that without the private hospitals involved paying compensation, those exposed to Mr Paterson’s criminality would have got nothing.

Paterson’s conviction later led to an inquiry by the Department of Health and Social Care (DHSC). It questioned the adequacy and accountability of the UK’s current medical indemnity system.

What is medical indemnity?

Medical indemnity is a type of insurance that protects healthcare professionals from the financial consequences of any claims of malpractice, clinical or medical negligence. These occur when harm happens to a patient because of the actions, or omissions, of a healthcare professional, which mean that the patient didn’t receive the accepted standard of care.

The indemnity covers legal fees, compensation payments, and other expenses incurred in defending against or settling such a claim. Every doctor is legally obliged to have adequate and appropriate indemnity in place as soon as they start practising in the UK.

The UK’s approach to medical negligence insurance has been evolving since the ‘profession’ began in the 18th century, with a regular back-and-forth about who should hold legal authority in medical malpractice cases.

After a significant period where doctors decisions were final, more recently there has been greater emphasis on patients’ rights and ethical considerations, and judges can now overrule medical opinions, if they deem them illogical or unreasonable.

With patients having more influence over their healthcare in the NHS and private sector, the debate has not gone away. For instance, in December 2022, the Department of Health and Social Care (DHSC) published a summary of responses to its ‘Appropriate clinical negligence cover’ consultation to address concerns about the stability of the current forms of indemnity cover for those not covered by a state-backed scheme.

State-backed schemes (Clinical Negligence Scheme for General Practice – CNSGP in England and General Medical Practice Indemnity – GMPI in Wales) were introduced in April 2019, following extensive lobbying and contract negotiations by the British Medical Association (BMA). The schemes cover:

• GP contractors and their staff, including salaried GPs, locums, students and trainees, nurses, clinical pharmacists and other practice staff
• any clinical negligence liabilities arising in general practice in relation to incidents that occur on or after 1 April 2019
• all NHS commissioned work, including out-of-hours.

People are more aware of their rights than ever before, and better placed to seek redress (including compensation) if something goes wrong. Figures from NHS England and the NHS Resolution show that patient claims and clinical negligence payouts have steadily increased year-on-year.

How does medical indemnity currently work?

There are two main types of indemnity:

• Discretionary indemnity

This type of coverage has been around since the early 20th century and leaves it to the indemnity provider’s discretion whether to offer support in the event of a claim. It provides no contractual guarantee that consultants or their patients will be protected if a claim is made.

Providers of this type of insurance say that it is a less restrictive approach and allows them to use their knowledge and expertise to assess the wider context of the case. They say this allows them to prioritise fair outcomes for the consultant and patient.

• Contractual indemnity

The other main form of coverage is contractual indemnity (also known as ‘contract-based’ or ‘contract of insurance’ cover). This insurance is built around each healthcare professional’s role, responsibilities and career stage, offering tailored protection based on a clearly worded contractual agreement.

What does this mean for me as a patient?

Although most of the healthcare in both the NHS and private sector is safe, things can go wrong.

We recommend that you ask about how the hospital and consultant are insured, and who’s responsible if something goes wrong. Make sure you have carefully read and understood the small print in the Terms and Conditions, including what is said on ‘practising privileges’, before signing them.

You can also check out a hospital’s safety rating and any reported incidents on their profile on the PHIN website.

If something does go wrong and you need to make a complaint, please see our guide to Making a complaint as a private patient.

Notes

This article is based on a longer one by Themis Clinical Defence, a specialised healthcare indemnity company, which is one of the sponsors of this year’s PHIN Quality Forum. Its article is written for medical professionals, but ours is focused on the patient view.

To read the original article, and see references, see: The Evolution of Medical Indemnity: From Discretionary to Contractual | Themis Clinical Defence.

By using this article, PHIN is not endorsing Themis Clinical Defence or any type of indemnity, and recommends that any healthcare providers looking for cover consider all their options.