Jeremy Hunt today said the new scheme – together with a raft of other measures – was a result of hospital managers and medics learning from their mistakes.
And he promised that a NHS culture of cover-up and secrecy will be replaced by honesty and transparency.
The Health Secretary Under the new plans, parents who believe medical blunders caused severe damage to their children – such as cerebral palsy or brain damage – would be able to join a voluntary “rapid resolution and redress” scheme.
Their claim would be assessed by investigators working independently from the NHS trust where errors occurred, and they would quiz NHS staff and parents and look at medical records.
Their findings would be presented to a panel of legal and medical experts who would decide whether any compensation is warranted and arrange for payments to be made to the family.
The scheme – which would assess around 500 cases a year – will be far cheaper for the NHS than the current route, which sees cases going to court or settled out of court, often for millions of pounds each.
Data from the NHS Litigation Authority shows the compensation bill is rising, reaching £509.3m in 2015/16 – up from £393.2m in 2014/15.
This includes damages plus the legal costs of dealing with claims and includes regular payments made due to previous years’ settlements.
The legal costs claimed by solicitors working for families as a percentage of damages paid has also risen in the past year and is “disproportionate” when compared with defence costs.
The new initiative – which will be the subject of a consultation – will not “lock” parents into the scheme.
This means they would still be able to go down the route of launching their own legal case against the NHS trust if they were unhappy with the voluntary scheme.
James Taylor, policy head at disability charity Scope, welcomed the move.
He said: “Finding out that your child has been affected by a birth injury can be a very traumatic time, so is very positive that the Government will be listening to disabled people and their parents on how the NHS can better support families when serious issues do occur during birth.”
Mr Hunt said; “We make it very difficult for doctors and midwives and nurses, when things go wrong, to do the one thing they really want to do more than anything else, which is to learn from their mistakes so that they can spread those lessons across the whole NHS.
“I want to create a safe space where NHS staff can talk about things that have gone wrong without fear of retribution.
“Sometimes when you have a litigation culture, what happens is the shutters come down, people get very nervous, very defensive, quite understandably.
“And the one thing that every doctor, every midwife, nurse, wants to do is to get to the bottom of what went wrong, why it went wrong, and how we can learn the lessons across the NHS to make sure that doesn’t happen again.”
In a speech at the Royal College of Obstetricians and Gynaecologists (RCOG), Mr Hunt also announced an £8m boost for training, and a £250,000 maternity safety innovation fund.
Maternity ratings for every part of England – using data that already exists – will be published and a new Healthcare Safety Investigation Branch, modelled on the Air Accidents Investigation Branch, will be launched.
Professor Lesley Regan, president of the RCOG said: “The UK is a safe place to give birth, however, the pressures on maternity services are growing and stretched and understaffed services affect the quality of care provided to both mothers and babies.”