The Medical Defense Union (MDU), the UK’s leading medical defense organization, has warned that plans to change how claims are calculated in Northern Ireland could lead to a ‘significant increase’ in underwriting compensation for general practitioners.

The personal injury discount rate is currently set at 2.5% in Northern Ireland, but the Department of Justice plans to replace it with a new rate of minus 1.75% from May 31. He also introduced a bill to change the way the rate is set. The discount rate is used to calculate the amounts needed for long term care in clinical negligence claims based on the expected returns on the investment of a premium.

Responding to the Justice Committee’s inquiry into the bill, Dr Matthew Lee, MDU Director of Professional Services, said:

‘The timing of this change could hardly be worse – after making immense sacrifices in the fight against Covid-19 over the past 12 months, GPs in Northern Ireland are now facing sharp increases in their subscriptions compensation due to the government’s decision.

“A discount rate change of this magnitude will have a dramatic impact on health and social care funding and hard-working GPs across Northern Ireland. General practitioners in Northern Ireland have no state guarantees for claims and fund their own compensation agreements. They are already struggling with the highest compensation costs of any part of the UK.

“To give you an indication of the impact on the finances of the civil service, when the rate in England and Wales fell from 2.5% to minus 0.25% (at one point at a level as low as minus 0.75%), a claim valued at around £ 4.5million at the previous rate actually settled for £ 10.6million.

“We are in talks with the Department of Health on steps that could be taken by the executive to protect primary care in Northern Ireland from the financial implications of this new rate. We are concerned that without action taken, NHS GPs could be forced to retire prematurely or leave the profession. This is something the NHS can hardly afford, especially in the midst of a pandemic, and would not be desirable for GPs and patients.

The MDU urged the Executive to adopt a different methodology than the one proposed because the discount rate has financial implications for the health service and taxpayers. The methodology should be based on research into how claims are actually awarded and invested and the returns achieved – none of these are included in the proposed new methodology.

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