Photo: The Right Honourable Dame Kathryn Mary Thirlwall
The wait is over. Lady Justice Thirlwall's (pictured) public inquiry into how nurse Lucy Letby was able to murder seven babies and attempt to murder seven more at the Countess of Chester Hospital published its final report this morning and the verdict on the institution around her is damning. There was, the report concludes, a "complete failure" to protect infants on the hospital's neonatal unit: dysfunctional management, a board more concerned with reputation than safety, and parents left "kept in the dark" for years.
The findings will be pored over by NHS trusts, regulators and families for months, but for readers in the insurance market, the report matters well beyond its immediate, tragic subject. It’s arriving in the same year that NHS Resolution, the body that indemnifies NHS trusts against clinical negligence claims, has posted record annual payouts, and it recommends a new personal duty of candour for managers that could reshape how liability for hospital governance failures is apportioned. Here's what was just announced, and what it could mean for cover.
The Thirlwall Inquiry was set up in 2023, after Letby's conviction, to examine not her crimes but the conduct of the hospital around her: its board, managers, doctors and nurses, from when she started as a neonatal nurse in 2012 to her removal from the ward in 2016. It heard from more than 130 witnesses and reviewed around 400 written statements over six months of hearings in Liverpool.
Lady Justice Thirlwall's conclusion was stark: safeguarding procedures were never properly triggered, even as suspicions grew, because, in her words, staff wrongly believed they needed to be certain of guilt before acting. She found that if a doctor's concerns over an abnormal insulin test result in August 2015 had been acted on, the police would have had to be called far sooner; and that if Letby had been moved off the ward after a later death in October 2015, several further attacks and two further deaths could have been prevented.
The report also found that hospital executives ran what Thirlwall called an exercise in downplaying a rising death toll to the board, and that police were not brought in until nearly two years after concerns first surfaced – a delay she suggested reflected a desire to protect the hospital's reputation. The Care Quality Commission, which inspected the hospital in February 2016 without spotting the problem, has since admitted its own record-keeping fell short when it came to supplying evidence to the inquiry.
The report – which runs to more than 1,100 pages across three volumes – sets out a package of recommendations, most prominently the fitting of monitors to every neonatal cot and incubator so parents can watch their babies remotely, and tighter control of access to insulin (the substance Letby used to attack two of her victims) through biometric checks or CCTV on storage areas. News agencies have reported the total number of recommendations inconsistently, 14 in the widely syndicated Press Association account, 17 according to the BBC, which most likely reflects how individual measures have been grouped rather than any real disagreement over their substance.
One recommendation with a direct bearing on liability is the call for an "individual duty of candour" that would apply to managers personally, not just to their organisations, alongside a code of conduct requiring managers to put patients first. That builds on evidence heard earlier in the inquiry from Sir Rob Behrens, Parliamentary and Health Service Ombudsman from 2017 to 2024, who told the inquiry the existing statutory duty of candour needs urgent reform because it attaches to organisations rather than individuals and carries penalties too small to change behaviour. The Department of Health and Social Care has separately been consulting on regulating NHS managers since before today's report, an idea NHS Employers has broadly welcomed while asking for clearer detail on what any new regime is meant to achieve.
If a personal, individually enforceable duty of candour for managers does follow, it would sit closer to the kind of exposure directors and officers cover is built for than the institutional indemnity NHS staff currently rely on – a genuinely new wrinkle for an already-shifting D&O and management liability market.
The inquiry's findings land against a backdrop of already-stretched NHS liability finances. NHS Resolution's annual report for 2025/26, published in July, shows the body paid out £3.24 billion in clinical negligence compensation and costs over the year, up almost 5% on 2024/25.
It received 15,236 newly notified claims and incidents, a 5.6% rise on the year before and, within its main scheme for hospital trusts, the largest volume of claims it says it has ever received. Its provision for the future cost of claims already incurred stood at £60.26 billion as of 31 March 2026, of which maternity and neonatal claims account for 58%, even though obstetric claims make up only around 11% of clinical claims by volume.
Letby's crimes don't fit neatly into that maternity-claims category, they were deliberate acts of harm rather than clinical error , and NHS Resolution's own data illustrates how unusual a case this is for its systems.
A Freedom of Information response the body issued in mid-2024 confirmed that, as of the 2023/24 financial year, 18 claims had been logged against a specific "Lucy Letby" case code – and that none of them had yet closed. Given NHS Resolution's own estimate that it typically takes around three years between an incident and a claim being reported, and considerably longer to resolve high-value claims involving long-term care, the true financial legacy of the case is still being written into the NHS's books, years after the events themselves.
Strip away the specifics of the Letby case, and the failures Thirlwall identified; concerns not escalated, whistleblowers discouraged, record-keeping that couldn't stand up to scrutiny, are exactly the pattern healthcare liability insurers and risk managers have flagged as recurring loss drivers well beyond this one hospital. Insurance Business reported earlier this year that rising NHS-linked litigation and slow escalation processes are already pushing up medical malpractice costs across the healthcare sector, not just within NHS trusts directly.
Lady Justice Thirlwall herself was notably guarded about whether her recommendations will actually be acted on, telling reporters she was not reassured that ministers would follow through given the abolition of NHS England and the resulting uncertainty over who is now responsible for implementation.
Richard Scorer, a solicitor at Slater and Gordon representing three of the affected families, made a similar point: public inquiry recommendations, he said, are too often left to gather dust, and this one cannot be allowed to join them.
