Compensation culture
Encyclopedia
"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:
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:
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."
The report also suggests the factors which led to an increase in litigation in Britain in the 1990s were:
there has been both a legislature and a judicial push back against the perception of a compensation culture. The Compensation Act 2006
http://www.opsi.gov.uk/acts/acts2006/ukpga_20060029_en_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.
Annette Morris, January 2006
Personal injury
Personal injury is a legal term for an injury to the body, mind or emotions, as opposed to an injury to property. The term is most commonly used to refer to a type of tort lawsuit alleging that the plaintiff's injury has been caused by the negligence of another, but also arises in defamation...
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
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
by advocates of tort reform
Tort reform
Tort reform refers to proposed changes in common law civil justice systems that would reduce tort litigation or damages. Tort actions are civil common law claims first created in the English commonwealth system as a non-legislative means for compensating wrongs and harm done by one party to...
.
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 insuranceLiability insuranceLiability insurance is a part of the general insurance system of risk financing to protect the purchaser from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy...
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 defendantDefendantA defendant or defender is any party who is required to answer the complaint of a plaintiff or pursuer in a civil lawsuit before a court, or any party who has been formally charged or accused of violating a criminal statute...
's legal costs may be awarded against the plaintiffPlaintiffA plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
. - It may be difficult to disprove the existence of certain claimed injuries, such as neck and back strainsStrain (injury)A strain is an injury to a muscle or tendon in which the muscle fibres tear as a result of overstretching. A strain is also colloquially known as a pulled muscle...
or emotional distress, increasing the likelihood of perjuryPerjuryPerjury, also known as forswearing, is the willful act of swearing a false oath or affirmation to tell the truth, whether spoken or in writing, concerning matters material to a judicial proceeding. That is, the witness falsely promises to tell the truth about matters which affect the outcome of the...
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.
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."
The report also suggests the factors which led to an increase in litigation in Britain in the 1990s were:
- the abolition of legal aidLegal aidLegal aid is the provision of assistance to people otherwise unable to afford legal representation and access to the court system. Legal aid is regarded as central in providing access to justice by ensuring equality before the law, the right to counsel and the right to a fair trial.A number of...
for most personal injury claims; - the introduction of conditional feeContingent feeA contingent fee or conditional fee is any fee for services provided where the fee is only payable if there is a favourable result...
arrangements; - the appearance and growth of claims management companies. The largest of these, Claims Direct and The Accident GroupThe Accident GroupThe Accident Group was a Manchester based personal injury claims management company that went into administration in May 2003. The firm gained notoriety for informing its 2,400 workers of their redundancy by text message, which, according to BBC reports, led to the firm's offices being emptied of...
, collapsed.
Backlash against compensation culture
In the United KingdomUnited Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
there has been both a legislature and a judicial push back against the perception of a compensation culture. The Compensation Act 2006
Compensation Act 2006
The Compensation Act 2006 is an Act of the Parliament of the United Kingdom, introduced in response to concerns about a growing compensation culture but conversely to ensure that the public received dependable service from claims management companies...
http://www.opsi.gov.uk/acts/acts2006/ukpga_20060029_en_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
Court of Appeal of England and Wales
The Court of Appeal of England and Wales is the second most senior court in the English legal system, with only the Supreme Court of the United Kingdom above it...
struck down a damages
Damages
In law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
claim against the hosts of a party where the applicant fell off a climbing wall, rendering him tetraplegic.
Further reading
Spiralling or stabilising? the compensation culture and our propensity to claim damages for personal injury,Annette Morris, January 2006