The MDU has repeatedly warned that the high cost of indemnity is having a material effect on general practice, to the detriment of doctors and their patients. However, we have now reached a cliff edge, following the Lord Chancellor's catastrophic decision to slash the discount rate from 2.5% to a historic low of -0.75% in February 2017.

Changing the mechanism used to calculate lump-sum personal injury payments has a dramatic effect on compensation. For example, a claim involving an 8-year old patient with a life expectancy of 46 years that was previously settled for £9.45 million would now be settled for £15.65 million. Through no fault of their own, GPs have been faced with a steep rise in the cost of indemnity which is simply unaffordable for many.

At the time, the government rightly acknowledged that it was unfair that GPs should bear the brunt of its decision and in October 2017, Jeremy Hunt finally declared work would be done to develop a state-backed indemnity scheme for GPs in England. But although this announcement was welcome, it failed to address the immediate problem for GPs who have to pay for their own indemnity until the government scheme begins.

With the clock ticking, the MDU faced a choice. We could continue to provide traditional occurrence indemnity and ensure our mutual fund was sufficient to meet the current and future cost of claims which have been so drastically inflated by the new discount rate. However, this would mean setting a subscription rate which would be unaffordable for GP members and worsen the crisis in general practice.

The alternative was to find a way to ease the financial pressure on members straight away while ensuring they had adequate and appropriate indemnity. Our solution - Transitional Benefits - reduces subscriptions for GP members in England by 50%, while enabling them to seek assistance and indemnity for claims arising from incidents that happen in the period between 1 November 2017 and the launch of the state-backed indemnity scheme, provided they remain an active paying MDU member.

All the other benefits of MDU membership remain unchanged, which means those on Transitional Benefits can also continue to call on the MDU whenever they need our expert medico-legal advice, legal representation or help with a membership query.

Join the MDU in our fight to save general practice

Dr Christine Tomkins

Join the MDU in our fight to save general practice