If so, the DH has recently issued guidance on the management of clinical negligence risks arising from treatment delivered to NHS patients. This guidance was issued in the form of a letter to Strategic Health Authority (SHA) and PCT chief executives on 2 June 2011, (the guidance).

Under the terms of ECN/FCN contracts, independent sector providers are indemnified by the Secretary of State (as agent for the PCT).

At present, independent sector providers cannot become members of the clinical negligence scheme for trusts (CNST). In order to manage clinical negligence risks arising from treatment delivered to NHS patients, the NHS Standard Contract for Acute Services at clause 26.2 (Liability and Indemnity) therefore requires all providers to put in place appropriate indemnity arrangements or commercial insurance in relation to clinical negligence. The choice between the two approaches is at the election of the independent sector provider.

Where a provider elects a PCT indemnity, rather than commercial insurance, then the PCT must follow the guidance. The guidance provides instructions describing the arrangements to be put in place where an indemnity backed by the PCT’s CNST membership is to be used. Annex A to the guidance sets out the form of indemnity that must be entered and the document to be signed where there is a coordinating commissioner and associate commissioners. In addition, the independent sector provider must pay a monthly contribution for the indemnity, and this must be set according to methodology set out in the guidance. There is nothing to prevent parties applying this solution to other contracts for commissioned NHS activity. However, in other situations, DH and SHA approval must be sought and the NHS Litigation Authority notified.