Medical malpractice

2025 brought some significant legal and regulatory changes in medical malpractice. Looking back at the year and ahead to 2026, a few key themes stand out that will shape medical malpractice insurance and litigation.

2025 in review: Key legal developments

One of the most highly anticipated developments came in February 2025, when the Supreme Court heard arguments on the ‘lost years’ compensation principle in CCC v Sheffield Teaching Hospitals NHS Foundation Trust. Judgment remains outstanding but the Court is considering whether child claimants can recover damages for loss of earnings during their ‘lost years’ – a right available to adult claimants since Pickett v BRE but traditionally barred for children following Croke v Wiseman. The decision, once available, will have profound implications for quantum assessments in catastrophic injury cases and potentially significant financial impacts for medical malpractice insurers.

The decision in Bailey v Bijlani & MBNA Ltd confirmed that patients can pursue claims under Section 75 of the Consumer Credit Act 1974 against credit card providers where private medical or dental treatment paid for by credit card results in injury. This provides claimants with a valuable alternative route to recovery when the original provider lacks adequate indemnity cover, though such claims remain subject to the three-year limitation period under the Limitation Act 1980.

Regulatory responses to emerging risks

The unregulated cosmetic and aesthetic treatment sector continued to generate serious concerns. A BBC investigation revealed illegal teeth whitening kits containing hydrogen peroxide levels up to 120 times the legal limit being sold on social media, whilst in July 2025, 38 cases of botulism poisoning were recorded in England after suspected use of unlicensed Botox-like products. In response, the government announced new licensing rules for non-surgical aesthetic procedures, categorising procedures by risk and requiring practitioners to hold appropriate indemnity cover, meet hygiene standards, and prohibiting procedures on those under 18.

Private antenatal scanning remained under scrutiny, with the Professional Standards Authority recommending additional regulatory oversight following evidence of missed diagnoses and inappropriate use of Doppler ultrasound by unqualified sonographers. The number of related claims has increased, with significant insurance implications given that indemnity cover is often limited to those under direct employment contracts.

Artificial intelligence: Transforming healthcare and insurance

Perhaps the most transformative development is the rapid integration of artificial intelligence into healthcare. AI technologies are making significant strides in diagnosis and treatment, from skin cancer detection to diabetic retinopathy screening and stroke detection. However, NHS England has warned trusts and GPs about risks associated with adopting non-compliant AI technologies, particularly ambient voice technology, highlighting concerns about clinical safety, data protection and financial exposure.

The insurance market has struggled to keep pace with AI advancement. The concept of ‘silent AI’ has become critical, with policies drafted before the AI boom potentially covering - or not covering - AI usage by chance rather than design. Insurers must now make firm decisions on their approach to AI and address it expressly in policy wording.

AI integration introduces several potential risks:

• determining liability when AI systems contribute to medical errors;
• the potential for AI to alter established standards of care under the Bolam test;
• informed consent issues;
• data protection risks; and
• the reality that AI systems can produce errors leading to incorrect diagnoses or inappropriate treatment.

Looking ahead: Opportunities and innovation in 2026

Looking ahead to 2026, the medical malpractice insurance market stands at an important juncture. The Supreme Court's lost years decision will provide much-needed clarity for quantum assessments in catastrophic injury cases. The new licensing regime for cosmetic procedures represents a positive step towards professionalising a sector that has long needed regulatory oversight, creating opportunities for insurers to develop tailored products for a more structured and compliant market. Section 75 Consumer Credit Act claims, whilst presenting challenges, also highlight the importance of adequate indemnity cover and create opportunities for insurers to educate and support the private healthcare sector.

The regulatory environment is evolving in the right direction. Enhanced oversight of sonographers and enforcement action against illegal cosmetic practitioners will drive up standards across the industry, reducing risk exposure whilst creating demand for comprehensive, well-designed insurance products from compliant operators who take their professional obligations seriously.

Most significantly, AI presents an extraordinary opportunity for forward-thinking insurers. As AI technologies become increasingly embedded in healthcare, insurers who develop clear, innovative coverage solutions will be well-placed to support healthcare providers in delivering better patient outcomes through technological advancement. The challenges around liability, standards of care and data protection are solvable, and early movers who can offer certainty and expertise in this space will establish strong competitive advantages.

For insurers, 2026 promises to be a year of innovation and growth. The traditional NHS-focused medical malpractice market remains stable and well-understood, whilst the expanding newly regulated sectors, enhanced by transformative AI integration, present exciting opportunities. Insurers who can navigate this landscape, understanding emerging regulatory requirements, developing coherent AI coverage strategies, and partnering with healthcare providers to manage and mitigate risk, will not only be well-positioned but will play a vital role in supporting the continued improvement of healthcare delivery.

The year ahead is one of positive transformation. With greater regulatory clarity, technological advancement improving patient care, and insurers rising to meet new challenges with innovative solutions, 2026 offers the medical malpractice insurance market the opportunity to demonstrate its value as an enabler of progress in healthcare.

Articles in this section include: 

• Clinical negligence and Section 75 of the Consumer Credit Act.
• ‘Lost years’ compensation principle reaches the Supreme Court.
• Rise in illegal teeth whitening kits: Serious risk to dental health.
• AI in the healthcare sphere: Public and private considerations.
• Understanding the new regulations for non-surgical cosmetic procedures: Enhancing patient safety.
• Room for error? Malpractice and private pregnancy scans.

Clinical negligence and Section 75 of the Consumer Credit Act

Author: Bethan Parry

Where a supplier of services purchased via credit card has caused damage, a purchaser of the service can use Section 75 of the Consumer Credit Act 1974 (CCA) to recover against the credit card provider, which is particularly useful if a recovery cannot be made against the supplier.  

In Bailey v (1) Bijlani (2) MBNA Ltd [2025] EWHC 175 (KB) a patient received significant damages from a private dentist following unsuccessful implant surgery. Additionally, the patient successfully claimed against her credit card company, MBNA, which was found jointly and severally liable for the damages since the treatment was paid for by the patient using a credit card.

Section 75 of the CCA seeks to protect consumers. It states that a credit card provider is as responsible as a service supplier or retailer if the supplier breaches a contract or misrepresents their services.

Whilst it was open to MBNA to serve expert evidence to challenge the findings of the experts relied on by the Claimant, they elected not do so and were also unable to undermine the evidence and opinion of the experts who did give evidence.

MBNA was entitled to an indemnity and/or contribution from the First Defendant in respect of damages and costs, though the value of this indemnity may be limited If the provider is no longer solvent. 

Section 11 of the Limitation Act and Section 75 CCA claims

Whilst limitation was not an issue in Bailey, it was in the previous case of David Bond v Livingstone & Co [2001] PNLR 30. In Bond the claimant suffered injuries in a clinic which was designed to cure hair loss. The original defendants became insolvent, and a second action was issued against the credit card companies involved.

As this was a claim in contract, the claimant’s legal advisors were under the impression that there was a six-year limitation period. Following the insolvency of the original defendants a second action was issued (five years after the event) against the credit card companies involved.

The court found that it was the three-year period in section 11 of the Limitation Act 1980 that was the relevant period within which to bring a claim and the court refused to exercise its discretion under section 33 and so the claimant’s initial action failed.

Section 11 of the Limitation Act provides:

Summary

Section 75 of the Consumer Credit Act provides Claimants with a way of recovering damages and costs when the supplier of services (including medical or dental services) does not have indemnity cover. It may only become apparent at a later date that the supplier does not have indemnity cover and limitation may therefore become an issue.

‘Lost years’ compensation principle reaches the Supreme Court

Author: Bethan Parry

Following a 10-day trial of quantum heard in June 2023, in CCC v Sheffield Teaching Hospitals NHS Foundation Trust, Mr Justice Ritchie granted the claimants permission for a ‘leapfrog’ appeal to the Supreme Court on the issue of whether loss of earnings in the ‘lost years’ could be recovered by a child. 

The case comes before a panel of 5 Justices of the Supreme Court on 11 and 12 February 2025

Background

As a result of a shortened life expectancy, a claimant may suffer future financial losses. Can a claim be made in his or her lifetime for the loss of earnings that he or she will suffer after their likely death (the so called ‘lost years’)?

In Pickett v BRE (1980) AC136 the House of Lords found that an adult claimant can recover damages for loss of ‘financial expectations’ during the ‘lost years’. The House of Lords decided that these were pecuniary losses because the claimant had been deprived of the opportunity of distributing the income in way they desired. The unfairness to dependents by not allowing recovery for income in the lost years was considered the principle social reason for permitting recovery. 

Nevertheless, such claims have continued to be controversial. Lord Phillips in Gregg Scott (2005) 2AC 176 questioned the rationale behind lost years claims: 

The decision in Pickett found that the losses were those of the claimant for which they had a claim in their own right, and that recovery was possible regardless of the actual existence of dependents. The only caveat is that the loss should not be considered too remote to be measurable.  

Child claimants

Whilst recovery of loss of earnings in the lost years has been permissible by adult claimants, recovery by child claimants has been barred since the decision in Croke v Wiseman on the basis that such claims were considered to be too speculative, Griffiths LJ stating: 

Comment

Whilst there is apparent unfairness between the way adult claims are treated and those of a child, a child’s potential losses are fundamentally more speculative than those of an adult. It will be interesting to see how wide a review of the recoverability issues the Supreme Court decides to undertake.