The call came in an open letter to the chancellor from the Medical Defence Union (MDU).

Dr Matthew Lee, chief executive of the MDU said: ‘The MDU has been sounding the alarm bell on the cost of clinical negligence for years, particularly around rising legal costs. We've written to the chancellor because the Budget offers a real opportunity for this Government to take decisive action and halt the eye-watering sums the NHS is paying out in legal fees.'

The NHS spent more than £800m on legal fees relating to clinical negligence claims in the last year, with £620m paid to claimant lawyers. The legal fees for lower-value claims were almost four times higher than the compensation awarded.

Dr Lee said: ‘Those harmed by negligence must receive appropriate compensation, however, it cannot be right for legal costs to far outweigh these awards. Action needs to be taken to keep this money within the NHS to support patient care and frontline services, which is what the UK taxpayer expects.'

The MDU's letter stressed the need to introduce Fixed Recoverable Costs (FRC) for lower-value claims, which could save over £50m a year. The scheme was due to be implemented in April 2024 but has been stalled due to ‘outstanding issues'.

In addition, the MDU called on the Government to publish David Lock KC's review into clinical medical negligence claims and urged it to amend Section 2(4) of the Law Reform (Personal Injuries) Act 1948, which requires courts to calculate compensation based on private healthcare costs rather than NHS provision. If claimants then choose to receive restorative treatment on the NHS, it can result in the health service effectively paying twice.

A Department of Health and Social Care spokesperson said: ‘We are very concerned about the rising costs of clinical negligence which is why we have asked David Lock KC to provide expert advice on how we can improve the system.

‘Our 10-Year Health Plan also makes clear that patient safety is the bedrock of a healthy NHS and we are committed to reducing the incidents of harm which can lead to claims.'