Compensation culture myth
Labour & European Law Review Weekly Issue 366 13 April 2014
A new report published last week by the TUC and the Association of Personal Injury Lawyers has found that workplace compensation claims have dropped by more than half in the last ten years.
The study entitled The Compensation Myth, tackled seven common myths about compensation, disproving the notion that the UK is riddled with a compensation culture. It found that the number of claims had dropped from 183,342 in 2002/03 to 91,115 in 2012/13 - a fall of more than 50 per cent. The report also found that more than six out of seven workers who are injured or made ill at work get no compensation whatsoever.
Another common misconception is the size of compensation payments. According to an analysis of nearly 64,000 claims in 2011, the majority of workplace damages paid to injured workers totalled less than £5,000, and around 75 per cent of cases were for damages of less than £10,000.
Unlike some other countries, compensation payouts in the UK are designed to compensate for actual loss, including pain and suffering, loss of earnings and future losses, all of which are very carefully calculated. The report pointed out that these damages are not a gift or a windfall for the injured individual, but are calculated to put claimants back in the position they were in before they were injured.
In addition to tackling false impressions of compensation in the UK, The Compensation Myth also looked at ways the existing bill could be cut without unnecessarily penalising injured workers. It suggested:
- Employers should stop acting negligently and stop injuring (and in some cases killing) workers. Insurance companies could help by linking premiums much more closely to the actual risk within specific workplaces and offering risk-based premiums that reflect an employer’s health and safety history.
- Employers should ensure that someone injured or made ill through work has early access to proper rehabilitation, giving the worker more chance to make a full or early recovery.
- Insurance companies should admit liability – where justified – early and follow court rules to avoid running up costly medical and legal bills.
TUC General Secretary Frances O’Grady said: “The government is forever trying to brainwash us into thinking the UK has a rampant compensation culture, but – as this new report shows – the facts tell a very different story. Even those dying from work-related diseases have precious little chance of getting a decent payout.
“The true government motivation here is to weaken health and safety legislation and make it even harder to for victims to pursue claims against their employers. Unfortunately the end result is likely to be a much higher rate of workplace accidents, injuries and illnesses in the future.”
Judith Gledhill, Head of Personal Injury at Thompsons said: “This report highlights the fact that the bleating by insurance companies about a pervasive claims culture being responsible for increased premiums is totally without foundation.”
To access the report, go to: www.tuc.org.uk/sites/default/files/The%20Compensation%20Myth%202014.docx