The NHS Litigation Authority (NHSLA) spent £143m on legal fees relating to clinical negligence claims over the 2008-09 financial year.

The organisation's latest financial report shows that total legal costs for the year in cases where damages were paid out reached £143.3m, of which only £39.7m went to firms on the NHSLA's panel of defence solicitors.

The remaining £103.6m related to costs claimed by claimant lawyers, with the organisation blaming the increasing availability of conditional fee agreements on the high claimant cost rates compared with the level of damages awarded. According to the report, claimant costs equated to around one-third of damages, while defence costs equated to only around 13% of damages.

In total the NHSLA spent around £807m settling claims during 2008-09, compared with £661m the previous year, with clinical claims increasing by more than 11% and non-clinical claims by more than 10%.

Despite the increase in claims, the NHSLA estimates that less than 4% of the 8,885 claims received in 2008-09 will go to court.

The NHSLA was formed in 2005 to oversee all clinical negligence claims across the NHS. It operates two separate panels for clinical and non-clinical claims.

The clinical panel, which was last reviewed in 2007-08, comprises 10 firms – Barlow Lyde & Gilbert, Beachcroft, Bevan Brittan, Browne Jacobson, Capsticks, Hempsons, Hill Dickinson, Kennedys, Ward Hadaway and Weightmans. Eversheds came off the panel at the end of March.

The seven-strong non-clinical panel was revamped during the last financial year, with Kennedys a new entrant to the roster.