A consortium of retailers and businesses led by the Association of British Insurers has called for an end to the ‘have a go’ compensation culture The group, which included Argos, ASDA, Ford, and Whitbread PLC, Lloyd’s, made it’s call on the day the ABI published a report ‘highlighting how the compensation system is failing too many genuine claimants, and the high price being paid by consumers, taxpayers and businesses’.
According to the ABI (which represents insurers who foot the bill for claims) the ‘growth in spurious and exaggerated personal injury claims and excessive legal costs’ had resulted in’ higher costs for consumers, local authorities and the NHS, as well as making it harder for genuine claimants to get compensation’. It reckoned that number of personal injury claims received by insurers leapt 72% between 2002 and 2010.
The context for the ABI report is the passage of the Legal Aid, Sentencing and Punishment of Offenders Bill which (if it goes on to the statute book in its current form), will radically redraw the way in which ‘no win, no fee’ works. There is no legal aid for accident claims however lawyers can act for you on a ‘no win, no fee’ or conditional fee basis. Ministers are proposing to scrap the rule that means that the losing side picks up the other sides’ costs – this means means that lawyers’ success fee (the extra a lawyer can charge for taking on a case ‘no win, no fee’) and insurance costs would come out of your compensation. Ministers are also proposing to slash £350 million from the £2.1 billion legal aid scheme.
Research has consistently pointed out that there is no compensation culture. That was certainly the view of Lord Young of Graffham. In December 2010, David Cameron, as leader of the Conservative Party, asked Young, who served in the Thatcher administration, to conduct a Whitehall-wide review of health and safety laws and the growth of the so-called ‘compensation culture’. His report found ‘behind the myth, the truth behind health and safety hysteria, the problem of the compensation culture prevalent in society today is one of perception rather than reality.’ ‘Many of the stories we read and hear either simply aren’t true or only have a grain of truth in them,’ claimed the government advisory body, the Better Regulation Task Force, in a 2004 report in a report on the compensation culture. Chapter titles included ‘Exploding the Urban Myth’ and ‘It’s all in the mind’. Less consolingly, the BRTF concluded we live in a ‘have-a-go’ society. Inaccurate press coverage, combined with the antics of claims companies, encouraged people to ‘have a go’ creating ‘a perception, quite inaccurately, that large sums of money are easily accessible’.
Jon is editor of the Justice Gap. He is a freelance journalist. Jon's books include The First Miscarriage of Justice (Waterside Press, 2014), The Justice Gap (LAG, 2009) and People Power (Daily Telegraph/LawPack, 2008). Jon is a journalism lecturer at Winchester University and a visiting senior fellow in access to justice at the University of Lincoln. He is twice winner of the Bar Council's journalism award (2015 and 2005) and is shortlisted for this year's Criminal Justice Alliance's journalism award