Personal Injury, Serious Injury & Clinical Negligence

The Compensation Myth

It is common to hear stories generated by the Government and fuelled by the media of a “compensation culture” in Britain.  Claims are made that the country is becoming “risk averse” as a result of people claiming compensation. The truth is, in fact, very different.

Lord Young, asked to look at the problem by the Government, concluded in his report on health and safety that:

the problem of the compensation culture prevalent in society today is … one of perception rather than reality”.

Professor Lofsted, who was asked by the Government to review health and safety said:

the ‘compensation culture’ (or the perception of it) in the UK has been the subject of several reviews over the last few years, but no evidence has been presented for its existence”.

Earlier this year, the Trades Union Congress (‘TUC’) and the Association of Personal Injury Lawyers (‘APIL’) examined the myths around compensation in the workplace and produced a report of its findings.

Myth 1 – ‘compensation claims are spiralling out of control’

Workplace claims have halved in the last ten years, despite the Government making it even harder for workers to claim compensation after they are injured as a consequence of the actions of their employer.

Myth 2 – ‘workers are too ready to claim compensation’

Six out of every seven workers who are injured through work get no compensation at all.  About half a million people are made ill every year as a result of their job and a further 110,000 are injured, however the number who are paid compensation from their employer is around 90,000 a year.

Myth 3 – ‘compensation payments are too high’

Analysis in 2011 shows that the majority of workplace compensation claims led to the injured party recovering less than £5,000; around 75% of the cases analysed resulted in awards of less than £10,000.

Myth 4 – ‘compensation is paid for any old accident’

This is not the case.  For a claim to be successful the injured party has to prove that the other party has been negligent.

Myth 5 – ‘it is unfair that insurance companies should have to pay out for diseases such as asbestos related diseases where they could not have known the risks’

If an employer can show that he could not have known that there was a risk of injury by exposure to asbestos then he will not be liable to pay compensation.

There have been health and safety controls on the use of asbestos since 1931, and the risks have been known across the industry since the 1940s. Despite the known dangers many employers continue to use it, and even now too many fail to take adequate care where asbestos is present in their workplaces. Around 2,000 people a year are dying from the asbestos related cancer, mesothelioma, usually from exposure to asbestos many decades ago.  All these deaths would have been avoided if the industry had protected its workforce.

Myth 6 – ‘many compensation claims would not be taken if Unions did not encourage their members to claim’

One of the main aims of Unions is to prevent workers becoming ill or injured through their work, however if their member is injured through the negligence of the employer and suffers loss, then the Union should advise the employee about his or her rights if requested to do so.

Myth 7 – ‘lawyers often drag these cases on unnecessarily to keep their costs up’

Solicitors have a professional duty to act in the best interest of their clients, not to drag cases out unnecessarily to increase costs.  Furthermore, the majority of claims for compensation for injury now go through a new claims procedure in which legal costs which can be incurred by the Claimant are fixed.  Lawyers therefore have nothing to gain by dragging these cases out.

Insurers often complain about the level of legal costs involved in dealing with compensation claims.  Those costs could be reduced if Defendants and their Insurers, when liable, were to admit liability at an early stage.  Failure to do so not only increases costs, but means that early treatment and proper rehabilitation for the victim is not readily available when it is most needed.

APIL and the TUC identified three areas in particular which would serve to reduce the cost of compensation claims:

  1. If employers stop acting negligently and stop killing and injuring workers.  Insurance companies can assist by more readily offering risk based premiums that reflect an employer’s health and safety history; good health and safety should be rewarded with lower premiums.
  2. If, when someone is injured or made ill through work, the employer ensures the employee has early access to proper rehabilitation, which is more likely to lead to a full or early recovery for the worker.
  3. If employers/their insurers admit liability (where justified) at any early stage and cooperate in the assessment of each claim, so as to avoid increased medical and legal costs.

If you have any questions arising from an accident in the workplace, please contact Lee Hart, Partner.