OBJECTIVES: To describe the pattern of preventable in-hospital medical injury under the "no fault" system and to assess the level of serious preventable patient harm. DESIGN: Cross sectional survey using a two stage retrospective assessment of medical records conducted by structured implicit review. SETTING: General hospitals with over 100 beds providing acute care in New Zealand. PARTICIPANTS: A sample of 6579 patients admitted in 1998 to 13 hospitals selected by stratified systematic list sample. MAIN OUTCOME MEASURES: Occurrence, preventability, and impact of adverse events. RESULTS: Over 5% of admissions were associated with a preventable in-hospital event, of which nearly half had an element of systems failure. The elderly, ethnic minority groups, and particular clinical areas were at higher risk. The chances of a patient experiencing a serious preventable adverse event subsequent to hospital admission were just under 1%, a figure close to published results from comparable studies under tort. On average, these events required an additional 4 weeks in hospital. System related issues of protocol use and development, communication, and organisation, as well as requirements for consultation and education, were pre-eminent. CONCLUSIONS: The risk of serious preventable in-hospital medical injury for patients in New Zealand, a well established "no fault" jurisdiction, is within the range reported in comparable investigations under tort.