Thankfully Lord Young is no longer an unpaid adviser to David Cameron. Unfortunately he left behind a report which was supposed to look at Health and Safety but actually seemed to focus on “compensation culture”.
This is a much loved topic of libertarians and of the media. Any time anyone claims compensation which, due to the way the case is reported, seems barmy the media scream and shout about “no win-no fee”, “ambulance chasing” and “lawyers”.
Lets start with no win-no fee. These agreements were introduced at the behest of the insurance industry to stop claimants using legal aid to seek compensation for injuries sustained. The ABI (Association of British Insurers) seems to hate people being able to claim a reasonable amount for injuries sustained so screams wildly about any unusual claim and how ridiculous compensation payments are without mentioning that the award about which they complain is unusual and failing to mention in detail the circumstances surrounding the cause of the accident. The greatest irony is that most of these claims are backed by ATE insurance or BTE insurance (such as with DAS or Home Insurance) and before a claim proceeds the insurer reviews the potential for success.
“No win-no fee” does not mean that there is no risk to the Claimant. The Claimant could face a costs bill if the claim is unsuccessful. The “no fee” element relates to paying one’s own lawyers-and does not mean that there is no risk of having to pay the defendant’s lawyers. This is why costs insurance is usually so essential. Unfortunately most media coverage of “ compensation culture” screams about “no win-no fee” without understanding what it means.
Along with “no win-no fee” (actually called conditional fee agreements) came Claims Management Companies. They were unregulated, wide boys who would advertise hard, approach people in the street, at home via cold calling and then sell the claim to Solicitors if they couldn’t get a settlement before having to issue. Eventually they were regulated and many companies left the “industry”. Still ABI wasn’t happy.
The Government introduced a portal so that all RTA claims had to be commenced through it. Costs which had been fixed for RTA claims in an agreement between Insurers and Solicitors were reduced even more. Insurers started to approach claimants direct-even those who were represented-and attempted to settle claims at much less than the claim was worth. it is suggested that this portal be extended for other claims.
Still ABI whinged about “spiralling costs and claims”-yet remarkably now accepts that “compensation culture” does not exist. Lets say that again, all together now “compensation culture does not exist”. Lord Young says so in his own report!!
The problem of the compensation culture prevalent in society today is, however, one of perception rather than reality.The number of claims for damages due to an accident or disease has increased slowly but nevertheless significantly over recent years. Furthermore, there is clear evidence that the public believes that the number of claims and the amount paid out in damages have also risen significantly. [page 19]
Goodness!
The insurance industry is competitive. Those who run such companies seek business and profits. Premiums are too low. The money to pay claims in a low interest economy is not there-answer blame the “lawyers”, talk about excessive claims and excessive costs but don’t mention the fact that premiums are ridiculously low for most people.
What has this got to do with health and safety-absolutely nothing. The health and safety regulations are not oppressive, they are necessary and again if insurers charged proper premiums they would gather in appropriate sums to ensure that claims, including costs, could be paid.
Insurers need to work with the insured to address issues of behaviour to reduce claims whether this is motor car drivers or owners of companies with obligations to employees. Employers need to review and fully understand what the health and safety regulations are and what they require rather than listening to a consultant who may be motivated to be overly cautious. Educating employees is highly important.
The media needs to stop churning out old stories of “compensation culture” and analyse what is actually going on.
Can you get sued if you clear snow from in front of your house or shop that is on the public highway and someone slips? No-absolutely not. Could a local authority be sued if children came to school and slipped on snow? No. Those who make decisions fear, perhaps, being sued through ignorance. The reason schools close is that teachers cannot make it into school-or the boiler blows up!!
Can you be sued if a hazard remains on your property and someone who enters your property is injured and you do nothing about it? Perhaps?
Thanks for your information
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