Who are the medical indemnity organisations?
Medical Defence Organisations (MDOs) are mutual non-profit making organisations, owned by their members. The primary function of MDOs is to indemnify doctors for incidents arising from their clinical care of patients and to provide members with 24-hour access to advice and assistance on medico-legal issues arising from clinical practice.
There are four MDOs: Medical Defence Union (MDU), Medical Protection Society (MPS), Medical and Dental Defence Union of Scotland (MDDUS), and the Medical Defense Society. As the benefits of membership of the MDOs differ, it is important that you consider each one carefully before making a choice.
What is mutuality?
The three MDOs are what are known as mutual organisations. This essentially means they are owned by their
members and that all the income generated by subscriptions is held in the mutual fund to defend members
and provide other benefits. Mutual organisations exist solely for the benefit of their members and no
dividends are paid to shareholders.
At the heart of the principle of mutuality is the fact that all the members of an organisation should contribute
to the common fund that is held on behalf of all members. This is an important principle and the annual
subscription amount is calculated based on the amount and type of work the member undertakes.
Alternatives to the MDOs
There are some other options for GPs unable or unwilling to obtain medical indemnity through one of the
MDOs. However, there are few providers in the private insurance market and premiums may be similar or
higher than the subscriptions charged by the MDOs. The level of cover may also not be sufficient to allow an
individual to remain on the medical performers list.
As a general policy, NHS England expects all GPs on the England National Performers List who are insured to
have minimum personal liability cover of £10 million for 2016, but this will need to be reviewed annually;
some MDOs question whether this is sufficient, as claims have been settled for more than £10 million. This
level is set taking into account the expected increase in payments for medical negligence cases in England. If
purchasing private insurance, all GPs are strongly urged to check that the personal liability cover is sufficient
before committing to payment. You should check with NHS England and your LMC if in doubt.
Why is the cost of medical indemnity increasing?
The cost of medical indemnity for GPs has risen significantly in recent years. GPC has received anecdotal
reports of rising indemnity costs that risks making some work, especially unscheduled GP care, prohibitively
expensive for GPs. The potential consequences of this could make the provision of unscheduled GP services
Higher indemnity subscriptions are the direct result of the rise in the number of cases and in particular the
number of high cost cases brought against GPs. For example, the MDU has experienced a rise in claims
frequency and size in recent years that has resulted in claims inflation rising at a steady rate of 10% per
annum. Medical negligence claims inflation has outstripped most other forms of inflation, such as house,
wage or retail price inflation. It is not unusual for an MDO to pay a claim for more than £5m on behalf of
a GP member.
However, the size of the award is no indicator of the seriousness of the negligence. Damages awards are
calculated on the basis they should as far as possible put patients back in the position they would have been
before the episode took place. In some cases this will include the provision of life-long future health and
social care for young patients and in others will reflect a significant loss of future earnings potential in
previously high-earning patients. Furthermore, the cost of the care a patient may require as a result of
negligence is based upon the cost of private care provision, not provision offered by the NHS.
It is also important to note this is not an indication of a deterioration in clinical standards. There is no
evidence this is the case and the MDOs themselves repudiate it by reference to the GMC's fitness to practice
In fact, the MDOs point toward the ease in which cases can be brought against GPs and how the processes
and procedures positively encourage patients to do so when they have a complaint. An analysis of MDO
claims shows that GPs are now more likely to be sued and full time GPs are now twice more likely to receive a claim than they were seven years ago.
The fact that more cases are being brought does not necessarily mean more GPs are being found culpable;
the MDOs also report a rise in the numbers successfully repudiated. While GPs bear no responsibility for
recent increases in claims numbers, through their annual subscription to the MDOs, members have to bear
the cost of MDO activity in investigating and responding robustly to these claims, as they have to bear the
cost of any compensation paid on their behalf.
Factors that affect indemnity subscriptions
The subscription rate paid by GPs varies depending on the amount and type of work undertaken. To get an
accurate quote of the rate applicable you will need to contact your MDO, but as a general rule subscription
rates are usually based on the number of sessions worked in total per week treating NHS patients.
A higher GP subscription rate may apply if you:
- undertake unscheduled GP care sessions (however if you provide these services to your own patient
population subscriptions should not increase as much)
- undertake private GP sessions or treat non-NHS patients
- undertake Forensic or Police Physician (FME) work
- work in a private travel clinic or a private walk-in centre
- work across multiple sites within a GP network or federation
- undertake occupational health physician work
- perform cosmetic surgery procedures
- employ pharmacists, nurses, and other clinical staff
- sports medicine
GPs are strongly urged to contact their MDO and discuss all of their various roles and responsibilities, not just
their day to day GP surgery role. If the MDOs have all the necessary information about the individual
member's clinical activities, they can offer the most competitive package. They should also inform their MDO
if their scope of practice changes. Practices also need to take indemnity issues into account when tendering
We all know that many areas are seeing trusts/health boards/vanguards/practices engaging allied healthcare professionals who often work in practices, or are shared across a number of practices, without necessarily being directly employed by them. This has raised concerns about the potential vicarious liability of a practice should they ask/direct a non-employed healthcare professional to undertake a specific clinical task and a claim later arose from that work.
The legal position in such an instance is not always clear and the claim could potentially be pursued against the individual, the practice where they are working at the time of the incident and/or their employing body. In terms of an individual having two indemnifiers (e.g. cover from one organisation and additional cover from another without clear delineation of what the additional cover is providing), it may be difficult to establish which provider is indemnifying the work in question.
That is why it is so important to confirm that the allied healthcare professional has a source of indemnity in place that would extend to any problems arising from the planned work before engaging them. Simply presuming that one of the practices’ group schemes will pick up problems arising from a shared member of staff may be naive.
We would recommend that practices hosting shared staff employed elsewhere take steps to assure themselves that appropriate indemnity arrangements are in place to meet claims arising from their work. This includes, but is not necessarily limited to:
- requesting sight of documentation confirming that the individual holds current indemnity that extends to work undertaken in general practice/primary care at the planned location
- ensuring that there are no limitations or exclusions relating to the planned work or location
- retaining a copy of this documentation at the practice and asking for an updated confirmation once out of date
- where the position is unclear, agreeing with the individual that they will confirm with the employing body or indemnity provider (in writing) that the individual holds indemnity that extends to the planned work and that the practice partners will not therefore be liable in the event of a claim arising from the acts or omissions of the individual shared staff member; a copy of this response should be kept by the practice
- where an individual is indemnified through a group scheme held by another practice, confirming (in writing) with the group indemnity provider that the indemnity extends to work undertaken outside the specific practice
- where an individual does not hold (or is unable to demonstrate that they hold) individual indemnity for the planned work then the hosting practice should speak to their own indemnity provider to explore indemnity options for the work planned for the individual at the practice
- confirming that the individual is appropriately trained, experienced and qualified to undertake any planned work (this may include reviewing their job description)
- ensuring that appropriate supervision and clinical support are in place and that the individual is made aware of and complies with any relevant policies and protocols which the practice adopts (particularly when the individual is new to the practice).
Possible solutions to the increasing costs of indemnity
Evidence from other jurisdictions suggests that legal reforms are the most effective way of reducing the cost
of medical indemnity. The MDOs believe that reform of the law of tort is the only workable solution for
England (where compensation awards in medical negligence claims are significantly higher than in the rest of
the United Kingdom). One suggestion is that the law should be changed so that MDOs and the NHS Litigation
Authority, which can be required to pay compensation on the basis that care will be provided in the
independent sector, could purchase NHS and local authority care packages for victims of medical negligence
as a way of keeping compensation monies within the NHS.
The idea of 'NHS indemnity' has also been suggested, which is provided by the Clinical Negligence Scheme for
Trusts and administered by the NHS Litigation Authority. The current difficulty with this model is that the NHS
Litigation Authority has suggested that it cannot afford (and does not have the experience or expertise) to
indemnify individual GP practices as currently structured. They argue that Hospital trusts, being larger
organisations, can conform to much tighter corporate policies, protocols and guidelines around avoiding
clinical negligence, potential litigation and handling patient feedback and experiences. The potential for
variation across multiple smaller organisation such as GP practices is perceived by the NHS LA to present too
great a risk. The introduction of large primary and community care organisations, such as GP networks or federations, vanguard sites, multi-specialty community providers etc., may provide opportunities for the
Litigation Authority to consider providing similar indemnity to that currently enjoyed by trusts, although this
is not a short term solution and is unlikely to be a primary reason to form such groups.
There could also be drawbacks to the above model. MDOs are constituted in such a way as to support GP
members as individuals, with attention to their personal interests, whereas the NHS LA would have to
manage claims on behalf of Trust members and liaise with the Trust management, rather than the individual
doctors. Such a system would not reduce the amount or the cost of claims either, so they would still have to
be paid for. Transferring the risk will not diminish it.