New National Patient Safety Agency figures reveal that in the six months from 1 April to 30 September 2010, an eye-popping 547,879 "patient-safety incidents" were reported by NHS trusts in England (and a further 30,000 in Wales).

Happily, the vast majority resulted in either little or no harm to the patient, but 33,310 caused "moderate" harm (defined as significant but not permanent) and 4,358 led to death or severe harm.

The most common types of incident were patients' accidents – slips, trips and falls (29%) – medication incidents (11%), and incidents relating to treatment and/or procedures (10%).

It is in the context of a substantial number of people suffering at the hands of the NHS that the way clinical negligence claims are handled has emerged as the key battleground for reform of legal costs and funding. In 2009-10, the NHS Litigation Authority received 6,652 claims for clinical negligence (and a further 4,074 in respect of non-clinical incidents).

For every £3 paid in damages to injured people, the NHS pays a further £1 to their lawyers – a legal costs bill now totalling more than £120m a year. However good the justification, it never plays well politically.

One of the main reasons is the growth in conditional fee agreements (CFAs), going hand in hand with a cut in legal aid. With their success fees (often high because of risky cases) and hefty after-the-event insurance premiums, CFAs can cost the taxpayer dearly. Litigation authority chief executive, Steve Walker, says he has seen lawyers rack up £90,000 in costs even before they issue a claim.

Of the claims settled by the authority in 2009-10, CFAs funded 5,843, with 1,822 paid for by legal aid and 1,509 either by before-the-event legal expenses insurance or by the claimant themselves. It was not too long ago that legal aid covered most claims, and many people think it would be cheaper for the public purse to go back to this, but one over-arching problem is a lack of co-ordination between the health department and the justice ministry.

In any case, lawyers are now caught in a nasty justice ministry pincer movement: from one side it has proposed removing clinical negligence entirely from the scope of legal aid (because of the availability of CFAs) and from the other it is looking to implement Lord Justice Jackson's reforms, which would mean paying success fees and insurance premiums out of the claimant's damages, and not the defendant's pocket.

There is broad opposition to both from the profession and the likes of the patients' charity Action against Medical Accidents , although the litigation authority is one of Jackson's prime supporters; Steve Walker disagrees with the contention that ending recoverability will reduce access to justice, arguing that lawyers will find other, albeit less lucrative, ways to do the work.

But some believe that litigation is not the best way to deal with some clinical negligence incidents. A lengthy, adversarial battle is less likely to secure the apology and commitment to change procedures that patients often want more than the money. It is in part because of this that a review group set up by the Scottish government last month advised the introduction of a no-fault scheme, meaning injured people would not have to prove negligence to gain compensation.

The idea has been investigated and rejected several times south of Hadrian's Wall, most recently in 2003 by the then chief medical officer, Sir Liam Donaldson. The main problem is simply that it would cost too much – experts estimate that only about 10% of people who have a claim actually bring it. If they did not have to prove fault, many more would seek compensation, which would be only partly offset by reduced legal costs. Donaldson estimated that the bill could be up to £1.25bn. Nonetheless, in 2009 the health select committee called on the government to reinvestigate no-fault.

Peter Walsh, chief executive of Action against Medical Accidents, sat on the Scottish review group. He says injured people in Scotland are in an even worse state than those in England and Wales, with no CFAs, low legal aid rates and just a handful of specialist solicitors.

No-fault has its appeal, he explains. It would give more people access to justice and encourage the learning of lessons by taking the heat out of mistakes. But what chance is there of the government embracing a scheme that is going to cost a lot more?

Alternatives are still needed, says Walsh, as "the current system doesn't serve patients or the state well". There is a consensus forming on the need for a fast-track scheme for claims worth up to about £25,000.

Walker says he is working with the Association of Personal Injury Lawyers on how a pilot scheme could work. The association president, Muiris Lyons, welcomes the initiative, saying these are cases that are not eligible for legal aid but are difficult to run on a CFA because of their disproportionate cost, and so it could improve access to justice.

The question mark is over the bigger cases involving the very seriously injured. The legal aid consultation paper says: "The government recognises that there are likely to be cases, with high disbursement costs [such as for expert evidence], which are currently funded by legal aid but for which clients may find it hard to secure funding under a CFA."

The association is pushing for stricter protocols to streamline procedures, while Walker is floating the idea of paying for a joint expert to carry out an initial assessment on the case's viability. Meanwhile, the government itself does not seem to have any answer. "We do not consider that this represents a sufficiently high proportion of cases to justify retaining clinical negligence within scope," it says.

If you're lucky, you may still be able to claim legal aid under the proposals for funding certain "excluded" cases, but otherwise the dismal message from the government to some people injured through no fault of their own is simple: tough.

Neil Rose is the editor of legalfutures.co.uk