Page 160 - Pharmacy Appeals 1/4/04 to 31/3/05

136 Financial statements

Indemnity arrangements for coronavirus • The direct impacts on core (non-Covid-19) NHS
activity and hence the claims that might normally
The coronavirus pandemic has had a significant
arise - for example in relation to lower clinical
impact on the NHS over the last two years, which
activity or the risks of delayed treatment.
has the potential to affect the value of the liabilities
covered by NHS Resolution. In addition to the two • The indirect impacts across all other factors
new schemes that were established last year (CNSC that might influence claim costs - for example
and CHS), there are also potential impacts on the in relation to lags between incidents, claims
liabilities covered under the arrangements that were and settlement or the economic impact.
already in place (i.e. through CNST, CNSGP and Early Notification
LTPS) owing to changes in healthcare provision.
The majority (approximately 70%) of the CNST
As was the case last year, the estimated effect
provision is as a result of claims arising from
on the NHS Resolution provision is fairly limited
maternity activities - such as brain damaged
(£1.3 billion) at this stage because:
babies at birth following negligent care.
• the success of the vaccination programme meant that
Under the Early Notification (EN) Scheme, trusts
clinical activity wasn't as severely disrupted in 2021/22.
are required to report qualifying cases that meet
• a large share of the total provision is in relation the Early Notification criteria to Healthcare Safety
to incidents that occurred prior to 2020/21. Investigation Branch, and, from 1 April 2022, also

While these claims might still be affected by to NHS Resolution once HSIB have confirmed they
any potential disruption in the reporting and are progressing an investigation. HSIB will triage and
settlement of claims, this is not expected confirm their investigation on those babies who have
to significantly alter the liabilities due. clinical or MRI evidence of neurological injury. Once
NHS Resolution have received the final HSIB report,
• a large proportion (approximately 70% for
the EN team will triage the case further based on our
2021/22 compared to 68% in 2020/21) of the
internal clinical definition and then confirm to the trust
CNST provision is as a result of claims arising
which cases will proceed to a liability investigation.
from maternity activity. Although there have been
some changes to maternity activities, overall these • The EN Scheme has significantly altered the pace
activities have continued during the pandemic at which claims are opened. However, since the
and we assume that there will be a similar level of scheme was only launched in 2017 and it takes a
claims as in previous years. The estimated value of number of years for higher value claims to settle,
IBNR PPO claims, which mainly relate to maternity, there is relatively little settled claims experience
for incidents in 2020/21 is around £9 billion and to fully quantify the impact of the EN Scheme.
for incidents in 2021/22 is around £11 billion.
For this year, we have separately modelled claims reported
While a small number of claims related to Covid-19 under the EN Scheme within the IBNR provision and those
have been received, it will take several years for the expected to be reported outside of the scheme. In arriving
impacts of Covid-19 to fully materialise, due to the at our assumed number of claims, we have considered
time lags between incidents, claims and ultimately the rate at which EN cases have been opened to date
while assuming that the overall level of risk in relation
their settlement. As a result, there is limited experience
to brain damage at birth is broadly similar to the period
from which to quantify the impacts of Covid-19 on the
before EN. Hence we assume that the overall number of
provisions and our estimates are subject to uncertainty.
successful high value claims after the introduction of the
We have therefore applied a similar approach to
EN Scheme will be similar to the period before - reflecting
2020/21, where we have separately considered:
that the EN scheme only alters the reporting and claim
• The direct impacts that might arise from new activities settlement process, rather than the exposure to risk.
related to responding to the pandemic - for example
Since no high value EN cases have been settled yet, other
in relation to testing, diagnosis, treating and caring
assumptions in respect of claim costs and settlement lags
for Covid-19 patients and administering vaccines.
are set with reference to standard maternity claims.