UK Clinical Negligence Market Report 2024

Revenue from Clinical Negligence Cases Increases as More Cases Processed

The seventh edition of an annual market report which provides a review of the clinical negligence legal market, looking at the legislative background, recent market developments and drivers, market structure, market size and trends with historical volume and value data, the key players and future market developments.

Key findings from the seventh annual edition of the UK Clinical Negligence Market Report:

• In 2023/24, it is estimated that law firms earned revenue of just under £1.6 billion from clinical negligence (CN) cases, an increase of 7.6% over the previous year.
• In 2023/24, CN case numbers (registered at the Compensation Recovery Unit) increased by 9.6% compared to the previous year following an increase of over 7% in 2022/23. Cases settled increased marginally by 0.5%.
• For the third year running, damages paid increased and passed the £2 billion mark (£2,106.9 billion). Claimant legal fees reached £545.3m from £490.9m in the previous year and defendant legal fees were £169m increasing from £158.8m in 2022/23.
• As in the previous year, leading claimant law firms are Irwin Mitchell and Fletchers and, in 2023/24, these two firms increased their share of all NHS CN claims settled to a combined 17% from 15% in the previous year.
• We expect some slowdown in NHS claims settled in the coming year mainly because there was a drop in the number of claims registered two years ago: many of these will be complex claims that take longer to resolve.
• Alongside claims against the NHS, growth in the market is likely to come from other claims sectors such as care/nursing homes, equipment failures, and claims against unregulated practitioners such as some undertaking cosmetic surgery and non-intrusive procedures.

The above uncertainty makes it difficult to assess the short term outlook for the market. The other major uncertainty relates to whether the FRC regime for low value CN claims up to and including £25,000 is ever going to happen. If FRCs come into play, some law firms are likely to decide that it is not worthwhile financially to take on these lower value claims. Even without the arrival of FRCS for CN claims, the number of claimant law firms is decreasing as M&A activity continues and other firms leave the sector.

These trends are likely to continue as competition for a relatively small number of cases intensifies and as larger players cope better with often long delays before any compensation payments are decided with the resultant impact on short and medium-term cashflow.