Government plans to give the NHS powers to source treatment for victims in negligence cases from private resources is joined-up thinking, says Lord Hunt

In the last weeks before parliament rose for its summer recess, reports tumbled out of the government. One of them could have considerable implications for the insurance industry and does present us all with a great opportunity.

The chief medical officer, Sir Liam Donaldson, has set out his proposals for reforming the approach to clinical negligence claims in the NHS, with a period for consultation lasting until 17 October 2003.

Donaldson's vision is to introduce a system that is accessible, responsive and absolutely connected to service improvement and patient safety. He is concerned to ensure that any changes to the system should work for the benefit of all patients, not just individual claimants.

In this context he has addressed several issues which, if taken forward, will require fundamental changes to the service itself, not just the legal system.

One recommendation is that s2(4) of the Law Reform (Personal Injury) Act [1948] should be changed to exempt clinical negligence cases, which arise from NHS treatment, from the provision that the care costs' component of an award for damages is based on the costs of private, rather than NHS, treatment.

This sets a precedent for more widespread abolition of s2(4). Finance will be a major issue but there must be scope for an imaginative partnership here between the public and the private sector.

Under Donaldson 's proposals the NHS defendant would undertake to fund a specified package of care or treatment to defined timescales.

He acknowledges that initially the costs may be similar to providing a sum of money to purchase private care as "the NHS would have to fund elements of the care package privately and from a variety of resources".

The vision, however, is of an "NHS which offers and responds to patients' choices by sourcing the necessary care and treatment from a range of providers".

Another recommendation is for a national organisation, which would build on the excellent work of the NHS Litigation Authority. Notably, the emphasis of its remit would be on developing and monitoring care and rehabilitation packages.

The proposals do not, at this stage, extend to primary care (GPs) or private healthcare. The majority of GPs still rely on their professional organisations to indemnify them in the event of a claim. However, a natural extension to the proposed reforms - and a development that undoubtedly an organisation such as the Medical Defence Union would welcome - is that this organisation would purchase care and rehabilitation direct from the NHS, rather than paying for the cost of private care direct to a claimant.

A no-fault system of compensation has been rejected. The vision is of a health service that operates in a climate where risks of care are reduced and patient safety improves, and where remedial treatment, care and rehabilitation are available to redress harm and injuries arising from healthcare.

In October 2002, I suggested in this column that it was now time for "joined-up thinking" between government and the insurance industry to cater for care claims. The chief medical officer's report offers an invitation to do so.

Lord Hunt is senior partner of law firm Beachcroft Wansbroughs