The NHS has set aside almost one quarter of the £113bn annual health budget to cover legal claims against the health service, it has emerged. The NHS Litigation Authority, which is responsible for indemnifying the service against legal action, has set aside £26.1bn to cover its existing and future liabilities following over £1.3bn of claims last year alone. Following the announcement, it is now expected that the Health Secretary Jeremy Hunt will finalise new plans to fine hospitals which are dishonest about medical mistakes. Hospitals which have failed to demonstrate that they have been upfront about negligence cases could now face sanctions of up to £100,000. However a former Lloyd’s of London insurance executive, Michael Wade, who is currently investigating the viability of public insurance schemes on the Government’s behalf, believes that the cost of NHS compensation is unsustainable. “How on earth is that affordable?,” he said, adding: “It’s perfectly reasonable to raise the flag and say ‘We need to sit down and think about this’.” The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Setfords Solicitors are a national full service law firm, with medical negligence solicitors in Liverpool and across the country.