Tort Law: Compensation Culture in the United Kingdom

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Table of Contents

Introduction
Main Body
Conclusion
Bibliography

Introduction

People have a right to seek a legal solution when their rights have been violated. Moreover, everyone should be able to access justice. However, this does not mean that the court will grant damages for injuries caused by one’s negligence. Therefore, the ‘compensation culture’ is not exercised in the courts in cases of negligence. This paper aims to critically analyse the concept of the ‘compensation culture’ in the UK in order to find out whether the culture exists, or is just a myth. The paper brings out proof of the non-existence of the ‘compensation culture’ and how the courts in the United Kingdom deal with this concept. There are arguments that the United Kingdom has made compensation and litigation so common that they have become a custom in the society. The paper shows how the constant suits and compensations could affect a society negatively. Several court cases based on the ‘compensation culture’ phenomenon in the UK and how the UK courts have adapted to the ‘compensation culture’ have been employed in the analysis. The paper concludes that there is no sufficient historical proof or legal backing to show that the ‘compensation culture’ exists in the UK; therefore, it can be said to be a misguided theory in society. The culture is only present as a myth among the people, but it does not have any legal impact.

Main Body

There have been concerns about litigation becoming a culture in the United Kingdom. The compensation culture implies a society where people sort all disputes in the courts, even when it is not necessary and reasonable to do so. It signifies a nation where people seek litigation for even the most minor disagreements. Some of the leaders have openly expressed their concerns about this phenomenon. In 2004, Stephen Byers, who was then the Trade and Transport minister, stated that excessive suits and compensation would have tragic impacts on the economy and the people’s minds. However, there was a government report in 2003 that contradicted this argument by implying that the compensation culture was no more than a myth.

Statistics have shown a sharp increase in claims related to medical negligence. There has been an increase in the number of complaints against doctors, pharmacists, and dentists in both private and public health care institutions. The total amount of funds the National Health Service (NHS) spends on medical negligence claims have increased as well since the year 1996. Legal claims against the Ministry of Defence launched by members of the armed forces have risen since 1987. There have been many reasons for the increase in the number of legal claims in different fields. Road traffic accidents and claims against employers have also increased. An increase in the awareness of personal rights has pushed people to fight for their rights through constant legal claims. For example, increased awareness of employee rights and freedoms and the introduction of many laws to ensure the protection of those rights result in increased claims for violation of these rights.

A compensation culture may pose a problem because it attracts a lot of unnecessary costs. The compensation fees themselves may be high, and the payment of lawyers may also be too high. The culture may also limit the growth of businesses because it may strain business owners and auditors. Despite the worries that the ‘compensation culture’ in the UK may be resulting in unnecessary costs, a task force put in place by the government in 2004 compared the figures of the United Kingdom with other high income nations, such as Germany, Australia, Canada, and the United states and found interesting results. The task force concluded that the UK spent the least on compensations among these countries. The task force, despite finding that the UK had among the lowest numbers of legal claims, concluded that the compensation phenomenon was still a reason for concern because most people had the perception of litigation being a harmless and quick way to get money. The task force found that the media was the main source of the spread of the phenomenon.

The reports from the Compensation Recovery Unit showed a decline in claims for personal injury. The Compensatory Recovery Unit is a body where those sued for compensation have to report whenever a claim against them is made for personal injury or illness. The task force articulates that the term ‘compensation culture’ is a term that unjustly discourages victims from taking legal action. The task force is of the opinion that a person who suffers wrongful injury has a right to seek a legal solution, even though it causes the state to spend more or results in a high number of suits being filed. It expresses the concern that the fact that the United Kingdom has fewer actions brought to court may actually be a reason to worry, rather than rejoice, because such a situation may result out of a situation where victims of wrongful injury remain silent and do not receive the compensation they are rightfully entitled to. It may also be as a result of compensation being so low that it may not be fair and just to the injured victims. It is important to look more deeply into the situation in order to conclude that there is a problem. The unit should analyse whether the kinds of cases brought before the courts have merit or not. If the larger percentage of the cases presented are genuine, then it means that it is not a crisis.

Claims such as those against employers decrease with time, while those that result from car accidents increase. This may be presumed to mean that the employer liability actions decrease as a result of changes in the society and treatment of workers. Such change may be due to people abandoning the traditional methods of production and heavy industry. Claims such as medical negligence may result from a better understanding of injury and liability. An increase in the number of people who can bring claims has also greatly contributed to the rise in litigation. For example, the concept of equity came to remedy the weaknesses of common law. This means that equity increased the number of claims that people could bring before the court because it came to put the people on par in many aspects of life. This shows that the concept of equity provided a remedy for the wrongs that the common law did not provide a remedy for. The increase in the number of lawyers and their specialization has also widened the grounds for suits. It has given lawyers the chance to be keen on particular fields of law and be able to expand in the legal framework, thereby enabling more people to have more grounds for claims. An increase in the cost of compensation to match the rise of inflation has also led to an increase in claims.

In the case of Heil v Rankin, the court held that non-pecuniary damages would be increased to match the inflation. Though this decision did not cause a major increase in the amount paid for pecuniary damages, it still caused a minor increase in the compensations. The reduction of the discount rate for future financial losses caused an increase in the total amount of damages that would be rewarded. This reduction was based on the decision made in Wells v Wells.In that case, there was also a change in the multipliers, as the Ogden tables were approved. This caused an increase in the amount of damages rewarded. Legislation was introduced to increase the liability of those against whom a claim would be brought, thereby increasing the amount of damages that would be compensated.

Decisions have been made in different courts in an effort to quash the compensation culture. In the case of Brumder v Motornet, a mechanic failed in an application for damages against his insurer. Brumder tried to win damages for an injury that occurred in his workshop. He argued that the company that owned the machine had a duty to maintain it, thus he was injured as a result of the negligence of the company. The court held that Brumder had a duty to take reasonable care. He failed to perform his duty of protecting himself as a company director under the Companies Act, 2006. The case shows that even victims of an injury have a duty to ensure their own safety and such cases cannot rely on the compensation culture.

There is an effort to get rid of the mentality that people can run to the courts any time an injury occurs, even when they are responsible for the injury. The Brumder v Motornet case shows that courts do not support the compensation culture; instead, courts believe that one will only be compensated when there is actual liability. The compensation culture disregards the law and causes people to frown at the thought of litigation. Brumder could not be compensated for an injury that emanated from his own negligence. Instead, he should have been aware of his duties and responsibilities.

In a different scenario, a high court judge denied two women relief for their claims for whiplash. The judge stated that the compensation culture was unreasonably costly and needed to be controlled. The women had delayed reporting the injuries. They sued the Home Officer for damages after they had been involved in a minor crash with the company car. However, the women took long before going to hospital, in addition to delaying to report the incident. The court saw this as improper and evasive. Consequently, the women were denied claims because the claims were viewed to be too trivial to be granted relief. Granting relief to these women would have been unjust and misleading, as it would have continued the spread of the compensation culture. Moreover, there was no evidence showing that they would have, indeed, suffered serious damage. Additionally, none of the other passengers suffered injury. The evidence the women provided seemed unreal and opportunistic, thus the judge warned that he would not accept any of the evidence they provided.

The courts have shown that they do not openly and willingly accept the compensation culture into the justice system. The courts view this culture as one that undermines the rule of law and spreads injustice. Courts have employed efforts to try and make people understand that injury does not give one an automatic right to compensation. This way, the courts try to change the mentality of compensation and show people that everyone has a responsibility for their own safety. Therefore, people cannot be compensated if they breach a duty of reasonable care and safety to themselves.

Conclusion

The discussion shows that people believe that there are instances when an injury creates an instant right to compensation. People in the UK believe that as long as they have suffered injury, then they can sue and be granted damages. Developments in the legal field, an increase in knowledge, the expansion of the law, an increase in the cost of compensation, and the specialization of lawyers have led to the expansion of the idea of a ‘compensation culture’ in the UK. All these factors have increased the grounds on which a person can take another before a court. This concept has empowered people and equipped them with the knowledge that they have rights and the means to ensure these rights are protected. In the present scenario, the ‘compensation culture’ is not one that is welcomed by the courts in the UK, as shown in the cases that challenged the ‘compensation culture’. Courts have been strict in ensuring they do not encourage the growth of the ‘compensation culture’.

Bibliography

Books/Articles

Chen A, ‘Culture and Compensation—Unpicking the Intricate Relationship between Reward and Organizational Culture’ (2010) 52 Thunderbird International Business Review 3, 189-202.

Hand J, ‘The Compensation Culture: Cliché or Cause for Concern?’ (2010) 37 Journal of Law and Society 4, 569-591.

Kaminskaitė-Salters G, ‘Climate Change Litigation in the UK: Its Feasibility and Prospects’ in Faure Michael, and Marjan Peeters (eds), New Horizons in Environmental and Energy Law Series (pp. 165-188) (Edward Edgar Publishing 2011)

Lewis R, and Morris A, ‘Tort Law Culture in the United Kingdom: Image and Reality in Personal Injury Compensation’ (2012) 3 Journal of European Tort Law 2, 230-264.

Morris A, ‘’Common Sense Common Safety’: The Compensation Culture Perspective’ (2011) 27 Journal of Professional Negligence 2, 82-96.

Williams K, ‘State of Fear: Britain’s ‘Compensation Culture’ Reviewed’ (2005) 3 Legal Studies, 499-514.

Cases

Brumder v Motornet [2013] EWCA Civ 195

Heil v Rankin [2000] 2 WLR 1173

Wells v Wells [2002] EWCA Civ 476. B1/2001/1387

Statutes

Companies Act, 2006

Others

Aviva, Who Pays for the Compensation Culture? 2004. Web.

The Constitutional Affairs Committee, ‘Compensation Culture: Third Report of Session 2005’ (The House of Commons 2006), Web.

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