Written by: Tom Jones
The ‘compo culture’ myth
What does a compensation culture look like? What is a health and safety culture?
Is it statistics which show road traffic accident (RTA) claims rising year on year? It cannot be the employers’ liability (EL) claim statistics, which are falling.
Is it television adverts for ‘no win,no fee’ claims, the text messages that persist in spite of the commitment of the Claims Management Regulator to stop them? If it is then won’t they be sorted by the proposed ban on referral fees which everyone seems signed up or resigned to?
God forbid that the perception of a compensation culture (and Lord Young and Professor Lofstedt – both commissioned by the Prime Minister to produce reports on reforming health and safety regulations – accept it is only a perception) is encouraged by the practices of insurance companies.
My firm (Thompsons) settled a claim recently for a client who suffered whiplash and back injuries when her car was hit by another vehicle. Before we were instructed, and within hours of the accident, the Royal and Sun Alliance – the other driver’s insurer – were on the phone admitting liability.
There followed what in any other circumstances would be deemed harassment. At 9.30 the next morning the injured woman was called by RSA and offered £1,000 in compensation for her injuries. Half an hour later they called again to confirm the offer and again at 4.30pm to ask if she would accept it.
Upset by this hounding, the woman resisted the temptation to take the money. She had not given a thought to a personal injury claim. She was in shock and pain and worried about her car and how she would get to work without it.
When RSA called again – only delayed by a weekend intervening – she had spoken to a colleague who advised her she should seek legal advice through her trade union. We were instructed, medical reports revealed the extent of her injuries and her claim settled for five times the amount first offered by the insurer.
Is systematically pursuing people for a claim after an accident evidence of a compensation culture? If it is then the insurers (along with the claims companies they condemn) have stoked it. The sense of crisis has been created by the very people who call for change.
The Association of British Insurers (ABI) choose to ignore Compensation Recovery Unit statistics which go to the core of the issue. Motor claims, which are 80% of all personal injury claims, increased by 43% between 2007 and 2011 to nearly 800,000 whilst EL claims – in other words, workplace accident and disease – were down 6.6% to just over one tenth of that. Conclusion? Motor claims are substantially up but there is certainly no workplace ‘elf and safety’ culture or compensation culture outside of RTA claims. But insurers are hoping that nobody spots that so they can maintain their attack on injury victims.
Judges, journalists, ministers, former justice secretaries, senior civil servants and members of the Civil Justice Council (who have a statutory duty to protect people) have all swallowed the insurer’s propaganda and hysteria about rising claims fuelling insurance premiums and the only solution being to implement the civil justice reforms proposed by Lord Justice Jackson in full.
Their immediate reward? Reforms that hit far beyond the realm of road traffic acidents. The Jackson amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill will hit claimants not those with straightforward RTA claims, even though it is those which are the problem.
And the government’s planned extension of the ‘RTA portal’ to all personal injury claims up to £25,000 is inappropriate. The RTA portal is an online claims process system intended to speed up low value (under £10,000) personal injury claims in road traffic accidents. The idea is to streamline the flow of information and reduce costs. But these are straightforward cases, where liability for the accident is rarely in dispute. Employers’ liability cases are too complex, too often disputed and denied by employers and their insurers, to be pushed through an electronic claims process
So what is the insurers’ ultimate reward? Increased profits and happy shareholders when the civil litigation reforms save them £bns.
If the industry was prepared to change its behaviour by acknowledging that employers’ liability claims are not the issue and that the Jackson reforms in the LASPO bill hit the wrong target, then access to justice campaigners and consumers might be a little less cynical about its motives.
Instead the industry is actively trying to sacrifice people injured or made ill by work on the altar of a mythical compensation culture.
Using the premiums stick to beat legitimate claimants is entirely disingenuous when the ABI has never guaranteed that a drop in compensation claims will reduce premiums. The RTA portal is acknowledged by the MoJ to be producing savings for insurers and yet premiums haven’t come down. They never have and they never really will.
The bottom line is that this is about profits and shareholder returns and nothing to do with concerns for consumers or claimants. This is the same industry that has spent a fortune in legal costs trying to escape its asbestos liabilities and which has only ever paid out on deafness, welders lung, stress, RSI, after litigation has forced them to do so. The leopard hasn’t changed its spots.