Compensation Culture: A Storm in a Coffee Cup

AuthorHarriet Ann Williams
Pages45-70
S.S.L.R. Compensation Culture: A Storm in a Coffee Cup
43
Vol. 1
Compensation Culture: A Storm in a Coffee Cup
Harriet Ann Williams
The existence of a compensation culture in the United Kingdom (UK) is a
controversial and widely debated topic. Whilst some commentators argue
that the „compensation culture is a reality, others believe it is merely a
perception fuelled by a frenzied media and a succession of changes that have
been made over the last ten years. These changes include those made to the
system of claiming compensation, such as the introduction of conditional fee
agreements and growth in claims management companies, as well as a range
of more general alterations made to society as a whole, such as the global
economic downturn. These changes have collectively affirmed and amplified
the public per ception of a compensation culture in the UK. The Compensation
Act 2006 is briefly examined, in order to discuss its effects on the public‟s
misconception. In respect of this paper, its main significance is that
Parliament felt it necessary to legislate on the matter. Furthermore, the
introduction of the Act may have even been a stimulant to the view that there
is a compensation culture in the UK in recent years.
Finally, the current situation is summarised and the issue of whether or not
there is a need to alter the public perception is considered. It is submitted by
this paper that the current perception that there is a compensation culture in
the UK should be altered in accordance with the reality of the situation.
Potential methods of redress are proposed and discussed in order to suggest
possible approaches to this problem in the future.
Introduction
„Reality doesn‟t bite, rather our perception of reality bites.‟
- Anthony J. D'Angelo.
ontrary to popular belief, no compensation culture exists in the United
Kingdom, but a strong public perception of the prevalence of this
culture does exist. This paper is a result of changes that have been made
to the process of claiming compensation and to more general social changes,
over the last ten years.
C
[2011] Southampton Student Law Review
44
Vol. 1
Compensation culture has been described as „an amorphous term‟
1. Although,
there is no widely accepted definition, the term compensation cultureis
generally used to connote a society in which there is a propensity for anyone
who has suffered a personal injury to seek punitive damages through litigation
from someone connect ed to the injury, whether or not anyone was actually at
fault.2 Due to the plethora of interpretations, this paper construes the term „to
suggest that we are much more likely to claim than in the past‟3 rather than
„using short-term trends to defeat the notion of a compensation culture‟ 4 The
fact that this culture concerns accidents where the connection between the
defendant and claimant, or accident and cause, is merely tenuous means that
the term is mainly construed in a pejorative way5 and this tendency towards
more fraudulent and spurious claims6 also adds to this definition of a
compensation culture.
There have been many changes over the last ten years including t he growth
and decline of claims management companies,7 the increased profile of
conditional fee agreements (CFAs),8 a worldwide recession, and various
technological advancements.9 These changes have been radical in altering
both the way in which claims can be made and the publics‟ perception of
claiming. Therefore, they have had effects on genuine claimants who have a
legitimate, worthwhile claim and society as a whole. In this respect, the term
“society” is very inclusive, defining the totality of social relationships among
humans with mutual interests, shared instit utions, and a common culture.10
As a result, the period of 2000-2010 is an ideal focal point to analyse and
prove the declaration that a compensation culture exists only in the mind of
the public.
Actuaries have described a compensation culture as „the desire of individuals
to sue somebody, having suffered as a result of something which could have
been avoided if the sued body had done their job properly.‟11 The implicit
criticism in this quotation evidences the negative manner in which the culture
of claiming compensation is viewed by many people. To challenge the
statement and to conclude that this desire only exists as a public
1 Morris, A, „Spiralling or Stabilising? The Compensation Culture and Our propensity to Cl aim
Damages for Personal Injury‟ (2007) 70(3) MLR 349-378, 350
2 This stance on the interpretation of the term “compensation culture” will be used for the
purposes of thi s paper.
3 Ibid.
4 See N1 above p363.
5 See Chapter 5 for discussion of if this is justified or not.
6 See Chapter 3, Part II I.
7 Growth: Money Advice Trust, Office of Fair Trading Financial Services Strategy
Consultation Paper,
htt p:/ / www.mon eyadvicetrust.or g/i mages/M AT_ response_to_ OFT_Financial _Servi ces_ St r
ategy_consultation_paper_ (2).pdf, accessed 16 February 2010, Page 5, an d decline: Gener al
Insurance Communicati ons Committee of the UK Actuarial Profession , The Cost Of
Compensation Culture, (October 2002) Page 26.
8 General Insurance Communications Committee of the UK Actuari al Profession, The Cost Of
Compensation Culture, (October 2002) Para. 3.4.
9 See Chapter 3 for furth er d iscussion.
10 http:/ /www.thefreedictionary.com/ society, accessed 16 February 2010.
11 See N8 above Para. 2.1.

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT