NHS injury claw-back could send employer costs soaring

News | HSW
01.03.2007

A new scheme that allows the NHS to recover the costs of treating employees injured in workplace accidents could raise insurance premiums, employers' organisations have warned. But the government hopes the scheme will act as an "additional impetus" for companies to improve their health and safety standards and prevent accidents at work.

The NHS Injury Costs Recovery (ICR) scheme allows the health service to claim both ambulance care and hospital treatment costs from insurance companies in cases where employees are awarded personal injury compensation. The insurer paying the compensation will be liable for the NHS costs.

The Department of Health estimates the total cost to the NHS of treating personal injury cases is between £170 million and £190 million each year, excluding road traffic accidents (RTAs). Under the Road Traffic (NHS Charges) Act 1999, the NHS can already recover costs in RTA cases. The ICR scheme, which came into force on 29 January and applies in England, Wales and Scotland, extends the RTA scheme and could earn the NHS £150 million a year - depending on take-up.

Health minister Andy Burnham said the scheme would not introduce any extra regulations for businesses, adding that the policy is based on the "legal rights of the NHS and the responsibilities of those to blame".

"It is unacceptable that taxpayers have to pay for the medical treatment of someone injured at work simply because employers fail to take steps to protect their workforce," he said.

But the Federation of Small Businesses (FSB) is worried employers' liability insurance premiums could spiral as a consequence of the new law.

"We are not here to defend the businesses whose negligence causes the accidents in the workplace," said Mary Broughton, FSB health and safety chair. "But the vast majority of small businesses are conscientious employers and don't deserve to be set back by higher insurance premiums."

Malcolm Tarling of the Association of British Insurers told HSW that while the insurance industry has been preparing for the new law for some time, it remains to be seen what impact the ICR system will have; some insurers may already have adjusted their premiums and some may not need to.

"Our advice to businesses is that this new law further emphasises the need for a good risk management system," he said. "Businesses that can reduce risks are not only more insurable, they are less likely to get a bill from the NHS - albeit one that will be passed on to their insurance company."