The Chief Medical Officer's (CMO's) report, Making Amends, has excited much interest from lawyers since it appeared last month. Some have seen it as foreseeing the end of clinical negligence litigation. But how much of an impact it will in fact have may turn out to be a question of resources.

One premise of the report is that the National Health Service should pay compensation in all cases where patients have suffered harm as a result of sub-standard care. The trouble is that there are rather a lot of these: according to research carried out some years ago, there are 850,000 cases a year in which patients suffer harm following an adverse event.

It is thought that only half of these were avoidable, and that a substantial proportion did not cause permanent damage to the patient. Nevertheless, if there were only 200,000 cases a year, the cohort would be substantially larger than the 7,000 claims made to the Litigation Authority last year. However, the picture is even bleaker than that, because two-thirds of current expenditure is devoted to birth asphyxia which is to be dealt with under a separate Redress Scheme adumbrated in Making Amends.

All cases of birth injury should get compensation irrespective of whether there is fault. The compensation that they should get is probably around half to two-thirds of the entitlement on legal liability. Where there is liability it is hard to envisage why any properly advised parents should accept such an award, or how a judge could approve it as being in the child's interests. Thus all children who have properly founded claims will be likely to reject the Redress Scheme and those who are paid will make a new demand on resources.

Inevitably, in any far-reaching programme of reform like this, the devil is in the detail and there will have to be a great deal of work done, not least with Her Majesty's Treasury, before any scheme based on these proposals can be made to work. What is of more immediate and practical value to all people concerned with clinical negligence litigation is the data that has been assembled by the CMO and published for the first time.

For example, many believe that the National Audit Office's (NAO's) report in 2001, which found that the average case took five years to be resolved, and that the average case worth less than £50,000 involved costs greater than the damages, painted a fair picture of clinical negligence litigation in this country. What was not so widely appreciated was that the NAO's report only looked at one scheme run by the NHSLA, the Existing Liabilities Scheme, which deals only with cases arising prior to 1 April, 1995, and at cases settled in the year 2000-01. Since the facts of the cases varied between five and 30 years in age, it is not surprising that this cohort had on average taken five years to resolve. Since they were the most intractable cases and those most likely to come to trial, it is not surprising that they cost far more than the typical case to dispose of as well.

The CMO has looked at the up-to-date picture by reporting on the length of time that the average case takes to settle under the Clinical Negligence Scheme for Trusts, the scheme that deals with post-1995 cases. The answer is 14 months. Not only is this a quarter of the time described by the NAO, it is not much longer than the 41 weeks that the New Zealand no-fault system takes to dispose of a claim involving a medical mishap.

People also think that there is an epidemic in the volume of cases reported to the NHSLA. It is true that there were steep rises in the years from 1997-98 to 2000-01, which may have been a reaction to the Bristol and Alder Hey Inquiries and the Ledward scandal.

There has now been a substantial fall both in 2001-02 and 2002-03. Where, at the peak, more than 8,000 such cases arose per year, 7,000 were reported to the NHSLA last year. This is matched by a fall in the number of complaints to the General Medical Council, which, having gone up rapidly between 1995 and 2001, has also now fallen.

Making Amends describes a number of ways in which things are plainly getting better but there is one area in which the CMO rightly recognises that the system is not working. Claimants' costs are now about 80% higher than defendants' costs. We often see cases where the hours recorded are extravagant, which suggests incompetence. Yet they claim much higher rates per hour, which strongly implies the market is not working.

Mr Justice Gage noted in the Nationwide Retained Organs Group litigation (NOGL) judgment last month that the claimants' costs sought in that case were excessive and unreasonable and the CMO says it is high time that something was done about this.

While the market for lawyers on the defendants' side works effectively, there is no market in reality on the claimants' side and rates are fixed by costs judges on the basis of what they think is fair.

Until some way is found of making the market work on the claimants' side, I suggest that the costs judges should be asked to see the defendants' bills and costs rates and use these as a basis for approaching the reasonability of claimants' costs. Where they have done different things, of course they should be paid for it. Where they have not they should not.

The courts should start to set costs limits in advance as in NOGL. This report should send a warning shot across the bows of claimant lawyers that society will not tolerate their excesses in future.

Another overdue reform put forward by the CMO is the Law Reform (Personal Injuries) Act 1948 s2(4). This says that the judge should disregard the possibility of medical treatment being provided by the NHS when considering a claim for the cost of remedial treatment. This is an illogical exception to the rule, that a claimant should prove his damage on the balance of probabilities.

Suppose two claimants go to the Law Courts and sue for personal injuries. One of them can win and be awarded £10,000 for the cost of having remedial surgery. The other may lose. They can leave the court arm in arm, take a taxi to St Thomas' Hospital and express the same demand for NHS remedial treatment.

There is no logic or fairness underlying this provision. Where people have used the NHS all their lives and received a modest capital sum for the first time, it is idle to suppose that they are likely to spend that money on private medical treatment rather than adhering to the habits which have served them all their lives. If the NHS has to pay for them to have remedial treatment and then provide the treatment gratuitously, it has to meet the cost of that treatment twice.

It may have been reasonable in 1948 when the NHS was new and untested. It cannot be reasonable now, and its abolition would be a vote of confidence in the NHS.

Bertie Leigh is the senior partner at Hempsons.