Does the UK really have a compensation culture?
20th January 2014
The next 12 months are sure to see many UK law reviews and legislative changes that allegedly aim to clamp down on the UK’s ‘compensation culture’. Media reports suggest that a huge number of feckless scam artists are pursuing false and fraudulent compensation claims as a way to earn an income, that almost everyone involved in a car accident makes a whiplash injury claim, and that employers are dealing with a burgeoning number of accident at work compensation claims involving foolhardy employees that are entirely to blame for their own injuries.
But is this true? Despite government ministers’ and media figures’ claims of a compensation culture, statistics do not seem to back this argument up. Many of the outrageous lawsuits people discuss when referring to compensation culture are either complete urban legends, or are based on a true story but twisted beyond all recognition, with the few genuine ‘outrageous lawsuits’ people have made failing at the first hurdle and with the claimant not receiving a penny of compensation.
Data also indicates that the number of compensation claims made in the UK has fallen dramatically over recent years. A TUC-backed investigation published in workplace health journal Hazards revealed that the number of successful accident at work compensation claims in the country fell by nearly 60% in the last decade, dropping from a total of 219,183 in 2000 to 2001 to fall to 87,655 in 2011 to 2012.
The lack of a compensation culture is starkly illustrated by the fact that over 4,000 people die of work-related emphysema and chronic bronchitis in 2011 to 2012, but just 59 of these succeeded in a compensation claim over the year. While there were 221,000 cases of work-related depression, anxiety or stress from 2011 to 201, only 293 successful industrial illness claims cited these conditions as the illness during this timeframe. It appears a vanishingly small proportion of genuinely-injured people actually claim compensation.
Figures like this must be why Master of the Rolls Lord Dyson said compensation culture is a “media-created perception”, and that the government, the legal profession and the courts should work together to counteract this notion. He stated that no developments in UK personal injury law could be said to have encouraged the creation of a compensation culture, and that the recent Jackson reforms will further discourage people from making unmeritorious compensation claims. Nonetheless, Lord Dyson argued that the country is unlikely to see any reduction in the number of media reports about the rising ‘compensation culture’, regardless of any decline in the number of personal injury claims.
Perhaps the common complainers about the UK’s alleged compensation culture have ulterior motives. Insurers would certainly like fewer people to claim personal injury compensation, as this would increase their profit margins. Unscrupulous employers may wish to dissuade people from claiming compensation so they can ignore workplace safety measures. The continual media narrative about compensation culture is likely to make people who have got a genuine claim for compensation feel like making a claim is somehow shameful or unacceptable, causing further unnecessary reductions in the overall number of claims.
Very few people would suggest that people who have genuinely been injured due to an organisation’s negligence should be prevented from claiming compensation against that organisation’s insurance company, but if the Coalition’s UK law reviews into tort reform continue in the same vein, this may well be the case in the future.