NHS to get cash from 'ambulance chasers'

The NHS is to be given powers to claw back money from patients who gain from "no win, no fee" compensation claims for accidents

The NHS is to be given powers to claw back money from patients who gain from "no win, no fee" compensation claims for accidents

The Government wants hospitals to be able to recoup the costs of treating accident victims who later get compensation payouts. This would include people who sue after, for example, tripping on damaged pavements or slipping on spilled liquid in a shop.

Insurance company leaders said yesterday that such a move would be certain to lead to higher premiums. "The more people that take legal action the more it will increase the cost to insurers. Insurers are not against that per se – if somebody sustains an accident, it is only right that they should receive fair compensation. But we will be making the point to the Government that insurance is not a bottomless pit," said a spokesman for the Association of British Insurers. "If society wants to go down the road of increasing the scope for compensation, that has to be paid for."

A recent boom in compensation claims has been fuelled by law firms and insurance claim firms pumping out in American-style advertising their willingness to bring legal claims for injuries, often on a no-win, no-fee basis.

Ministers are deeply concerned about the growth of the so-called "ambulance-chasing" and are seeking ways to combat the growth of the "compensation culture" in Britain which is making doctors more wary about the patients they treat. Now the NHS is preparing to cash in.

Hazel Blears, the health minister, said the Law Commission recommended in 1999 that the NHS should have the right to recover its costs in all cases where a payment of personal injury compensation was made.

She added that the Department of Health is planning to publish a green paper shortly which will set out the latest estimates of how much treating victims of everyday accidents is costing the NHS.

The Government is also planning to increase the fees it already charges insurance companies for treating road traffic accident victims.

All drivers are required to have insurance under the Road Traffic Act. The matter of fees was raised when Frank Dobson, the former Health Secretary, streamlined the system to enable hospitals to recoup more of the cost of treating road traffic accident victims. He estimated the NHS could raise an extra £100m-£160m.

Figures provided by Ms Blears to Labour MP Andrew Dismore show that the sums raised have fallen far short of expectations, although they are now rising. The NHS compensation recovery unit raised £26.4m in the first year of operation but that increased to £67m in 2000-2001 and it amounted to £58.9m in the six months to the end of October.

The daily rate charged by NHS hospitals to motor insurance companies will rise from £435 to £494 and the ceiling on total bills will be tripled to £30,000.