Spiralling or Stabilising? The Compensation Culture and Our Propensity to Claim Damages for Personal Injury
| Date | 01 May 2007 |
| DOI | http://doi.org/10.1111/j.1468-2230.2007.00642.x |
| Author | Annette Morris |
| Published date | 01 May 2007 |
THE
MODERN LAW REVIEW
Volume 70 May 2007 No 3
Spiralling or Stabilising? The Compensation Culture
and Our Propensity to Claim Damages for
Personal Injury
Annette Morris
n
The propensity ofaccident victims in England andWales toclaim compensation through the tort
system has generally increased since the 1970s. Contrary to popular belief, however, it has
remained relatively stable s ince 2000, if not since 1997/1998. The upward trend in claims abated,
therefore, when no-win no-fee advertising achieved prominence. Whether this long-term
increase in our propensity to claim supports the notion that a compensation culture has devel-
oped is largely a matter of interpretation. Our understanding of recent trends in our propensity
to claim has clearly, however, been distorted through the media.This distorted legal conscious-
ness may not only have a¡ected our views of the tort system but may also have in£uenced our
readiness to use it and thereby contributed to the stabilisation of accident claims in recent years.
INTRODUCTION
This article examines the widely-held notion that our propensity to claim acci-
dent compensation has increased signi¢cantly in recent years and particularly
since the explosion of no-win no-fee advertising in the late 1990s.
1
Resulting
complaints of a ‘compensation culture’ have sparked a media and political frenzy
but have received little academic scrutiny to date.
2
The article reveals that much of
n
LLM(Barrister), Lecturer, Cardi¡Law School. I wouldl iketo thank Bob Lee, Richard Lewis, David
Miers, Richard Moorhead,Donal Nolan, Ken Oliphant and the anonymous referees fortheir helpful
comments on earlier drafts of this paper. All errors and omissions remain my own.
1 The discussion is con¢ ned to Englanda ndWales, as it is in this jurisdiction that no-win no-fee
advertising has been most prevalentand concerns most acute. It should also be noted that whilst
there has been some controversysurrounding disease claims, there has been verylittle i ncompar-
ison with accident claims.See, for example, J.Robins,‘Insurers A¥icted byFee s Dilemma’ (2005)
37 Litigation Funding2; J. Robins,‘Enter the scan vans’The Guardian19 July2005; andY. Essen,‘Rise
in asbestos claims threatens i nsurers’The DailyTelegraph22 March 2004.
2 See K. Williams, ‘State of Fear: Britain’s ‘‘Compensation Culture’’ Reviewed’ (2005) LS 499.
This article relies mainly on secondary sources andpresents only a partial account of the evidence
that is available. For a statistical review, see R. Lewis, A.Morris and K. Oliphant,‘Tort personal
injury claims statistics: Is there a compensation culture in the United Kingdom?’ (2006) 14 Tor t s
LawJournal158. For a theoretical review,see R. Mullender,‘Negligence lawa ndblame culture: a
critical response to a possible problem’ (2006) 22 Professional Negligenc e 2. On the importance of
evaluating the tort system by reference to reliable statistical data, see D. Dewees, D. Du¡
r2007 The Author.Journal Compilation r2007 The Modern Law ReviewLimited.
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2007) 70(3)MLR 349^378
the furore has been unjusti¢ed.Whilst there has been a long-term increase in our
propensity to claim accident compensation, it has been relatively stable since the
late1990s. Contrary to popular belief, therefore,accident claims are not spiralling
out of control.Whilst there are still somegrounds on which itcould be said thata
compensation culture exists, it is not the foregone conclusion that the media and
others have led us to believe. Itis simplya sensationalised, politicised, selective and
romanticised interpretation of trends. The recent hype, it seems, has more to do
with commercial and political interests surrounding the tort systemthan with the
actual stateof a¡airs.The Government appreciates this but has not feltable to walk
away from the debate. Perceptions surrounding our propensity to claim may be
untrue but are real in their consequences. They have encouraged excessive risk
aversion and a sub-culture of spurious claims. The article moves on, therefore, to
consider the Government’s e¡orts to tackle these problems throughthe Compen-
sation Act 2006 and other initiatives.The article alsoexamines the dilemmaposed
by recent trends. The notion that widespread no-win no-fee advertising would
lead to an increase in claiming is convincing. Why then has this increase not
occurred?
THE MEDIA AND POLITICAL FRENZY SURROUNDING OUR
PROPENSITY TO CLAIM
Senior judges, politicians, commentators, journalists and a wide range of repre-
sentative organisations alike have bemoaned the development of a compensation
culture.‘Compensation culture’ is an amorphous term used in a varietyof di¡erent
contexts, but most markedly in relation to claims for personal injury compensa-
tion through the tort system.
3
Even here complaints concern a plethora of issues
including the amou nt of compensation awarded through the tort system,
4
the
expansive categories of liability within tort law
5
and most frequently the
increased propensity to claim accident compensation. This article con¢nes itself
to this latter aspect of the debate.
and M.Trebilcock, Exploringthe Domain of Accident Law:Taking the FactsSeriously (Oxford:Oxford
UniversityPress,1996).For a comparative perspectivese e, forexample, E.Wright,‘National trends
in personal injury litigation: Before and after Ipp’ (2006) 14 Torts Law Journal 233 (in relation to
Australia); and T. Baker, The Medical Malpractice Myth (Chicago: University of C hicago Press,
2005) (in relation to America).
3 It is also used i n relationto housi ng disrepairclaims, employment-related claims, educational neg-
ligence claims and the use of the Human Rights Act1998.
4 See for example,T. Brown,‘TheSocial Costs of a Compensation Culture’ in E. Lee (ed),Com pen-
sationCrazy:DoWeBlame and ClaimToo Much? (London: Hodder & Stoughton,2002); Institute of
Actuaries,‘Costof Compensation Culture’(Institute of Actuaries, 2002) at http://www.actuaries.
org.uk/¢les/pdf/giro2002/Lowe.pdf (last visited 23 January 2007); and Lord Justice PaulKennedy,
‘IsThis the WayWeWant to Go?’ (2005)JournalofPersonalInjuryLaw117.
5 See for example: F. Furedi, Courting Mistrust:The Hidden Growth of a Culture of Litigation in Britain
(London:Centre for PolicyStudies,1999)15 where he statesthat the‘most signi¢cantdevelopment
in British litigationis not the volumeof court cases but the extension of formalisedliability into
new areas’; D.Lloyd, in E.Lee, n 4 above,49 where he statesthat ‘. . . thelaw now condonesbeha-
viourthat in a di¡erent erawould have been consideredirresponsible and reckless’; C.Harlow,State
Liability:Tort Liability and Beyond (Oxford:Oxford UniversityPress, 2004) 8 where she argues ‘con-
sistentlyfor the restraint of tortlaw and for a less pro£igate use of damages as a remedy’.
Our Propensity to Claim Damages for Personal Injury
350 r2007 The Author.Journal Compilation r20 07The Modern Law Review Limited.
(2007) 70(3) M LR 349^378
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