Limit on GP's Professional Insurance Cover Leads to Disturbing Result
General practitioners are not employed by the NHS and are required to make their own arrangements in respect of professional indemnity insurance (PII). That gave rise to a disturbing result in one case in which lawyers were constrained to settle a disabled boy's clinical negligence case for about a third of its full potential value.
The teenager was 17 months old when a GP was alleged to have negligently failed to spot signs of pneumococcal meningitis and to refer him to hospital. A delay in treatment left him seriously brain damaged. Due to his long life expectancy and extensive care needs, his lawyers valued his claim against the GP at about £30 million.
The GP, who disputed liability in the case, had arranged his compulsory PII cover through the Medical Defence Union (MDU). That cover was subject to a £10 million limit of indemnity. Following negotiations, the MDU exercised its discretion to top up that limit and agreed to settle the boy's case for a lump sum of £11 million, plus his reasonable legal costs.
The High Court noted that when the indemnity limit was set in good faith, no one could have foreseen the extent to which damages awards have since inflated, as a result of rising care costs and falling returns on investment. Had a larger sum than £10 million been awarded following a trial, the boy would still have been stuck with the indemnity limit and his lawyers' only recourse in seeking to recover any excess would have been against the GP's personal assets.
The Court observed that, had the boy's claim been against the NHS or another public authority, no limit of indemnity would have applied. Given the close partnership between GPs and the NHS, that dichotomy did not appear right. It was very sad that the boy's claim had to be settled at a fraction of the likely cost of providing the lifelong care he would need.
In approving the settlement, however, the Court noted that the boy's legal team had been obliged to prioritise practicalities over the legal principles that normally apply to the valuation of compensation claims.
In this case, a practical approach by the young man's legal representatives secured the best possible settlement given the circumstances.