Compensation culture


Compensation culture

"Compensation culture" describes a society in which it is acceptable for anyone who has suffered a personal injury to seek compensatory damages through litigation from someone connected with the injury. The term is especially used to describe the legal climate with regard to torts in Britain and Ireland by advocates of tort reform.

Tort reformers criticize legal systems they deem to represent a "compensation culture" as resulting in:

  • Frivolous lawsuits that may be settled out-of-court if the cost of defending a case is greater than the settlement amount.
  • Liability insurance becoming prohibitively expensive where there is a high risk of compensation claims, making it impossible to host mildly dangerous activities such as children's sports or other public or community events.
  • Lawyers who offer to take cases on a "No win, no fee" basis may encourage the misleading belief that such cases are risk-free, when in fact the defendant's legal costs may be awarded against the plaintiff.
  • It may be difficult to disprove the existence of certain claimed injuries, such as neck and back strains or emotional distress, increasing the likelihood of perjury by plaintiffs feigning such injuries.

Some critics of the concept of a compensation culture believe it is largely an urban myth perpetuated by sensationalist media coverage of a small number of cases. For example:

The Government is determined to scotch any suggestion of a developing ‘compensation culture’ where people believe that they can seek compensation for any misfortune that befalls them, even if no-one else is to blame. This misperception undermines personal responsibility and respect for the law and creates unnecessary burdens through an exaggerated fear of litigation.[1]

Others criticize the implication that seeking compensation for injury is always suspect. A report by the Better Regulation Council states "The compensation culture is a myth; but the cost of this belief is very real."[2]

The report also suggests the factors which led to an increase in litigation in Britain in the 1990s were:

  • the abolition of legal aid for most personal injury claims;
  • the introduction of conditional fee arrangements;
  • the appearance and growth of claims management companies. The largest of these, Claims Direct and The Accident Group, collapsed.

Contents

Backlash against compensation culture

In the United Kingdom there has been both a legislature and a judicial push back against the perception of a compensation culture. The Compensation Act 2006[1] provides a number of statutory factors to reduce the perception that there should be an implicit right to compensation against somebody in the event of an accident. A number of judicial decisions in the United Kingdom have also moved towards an "accidents sometimes just happen" approach. In Poppleton v Trustees of The Portsmouth Youth Activities Committee [2008] EWCA Civ 646 the Court of Appeal struck down a damages claim against the hosts of a party where the applicant fell off a climbing wall, rendering him tetraplegic.

See also

References

  1. ^ Tackling the “Compensation Culture”: Government Response to the Better Regulation Task Force Report: ‘Better Routes to Redress’ (PDF)
  2. ^ Better Regulation Task Force Report: Better Routes to Redress

Further reading

Spiralling or stabilising? the compensation culture and our propensity to claim damages for personal injury, Annette Morris, January 2006

External links


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