Friday 12 April 2013 by John Hyde

The Treasury played a key role in cajoling justice ministers to push ahead with civil litigation reforms, an influential House of Commons committee report has suggested.

A public accounts committee report into the Whole of Government Accounts (WGA), which groups together departmental financial statements for the public sector, has revealed for the first time that the Treasury played an important role in no win, no fee reforms.

The Ministry of Justice has always insisted that cultural change as well as financial implications was behind the Legal Aid, Sentencing and Punishment of Offenders Act, which came into force on 1 April.

The public accounts committee heard evidence that the cost of litigation against the NHS had prompted government bodies to work together to bring down costs.

The report said: 'Between 2007 and 2012 the forecast cost of clinical negligence more than doubled to £18.9bn.

'The Treasury believed that this was largely due to the rise in 'no win, no fee' offers by the legal profession and told us that the WGA was encouraging the Ministry of Justice and the Department of Health to work together to reduce the cost of clinical negligence.'

Minutes of evidence given by Sharon White, director general of public services for the Treasury, showed the extent that her department was responsible for legal reforms.

She told committee in January: 'The WGA is showing its power, because you are actually encouraging the MoJ to be in the same room as the Treasury, the NHS and the Department of Health and to say, "actually, the legal framework that we have is encouraging and producing these costs in another key part of the public purse".'

She added: 'These things take a while to run through the system, but I hope that when we are here in two years' time these numbers will start to look very different.'

Meanwhile, the Medical Defence Union, which represents around 200,000 doctors and dentists and helps their defence against clinical negligence claims, called for tort reform to reduce what it described as 'spiraling' claims costs.

Chief executive Dr Christine Tomkins said claims inflation is putting huge pressure on the NHS and the taxpayers who fund it: 'I am not sure how many people know that much of the compensation money is being diverted from the NHS to the private health sector to fund care arrangements for a tiny number of individuals at public expense or that this is the result of a law passed over sixty years ago when the NHS was founded.'