I have been asked to sit on a 'question time' type panel on the subject of the compensation culture and would welcome views on the subject. For example, is it or is it not a myth and is there anything to substantiate the public/employer/employee perception that there is such a thing? Ta

decimomal, When I worked for a contractor in a previous life, Solicitors letters were a weekly occurrence. Interestingly, more so in certain geographic regions! Based on this, I would consider the problem is real and more opportunist than anything. However, examples of motorists crashing into other 'innocent' members of the public at roundabouts / lights, are not so opportunist.

I work for a national retailer, insurance administration is contained within our department. I know there have been reports that have concluded that a compensation culture does not exist based on the amount of successful claims etc. however this doesn't tell the true story. There is definitely a culture within the UK whereby the public feel that they are always owed something. In addition, and arguably in more cases than not, the public also feel that even when something is there fault they might as well put a claim in to "try their luck". Clearly this attitude has spawned from the no-win-no-fee set up. It is also a myth that because businesses have EL / PL etc insurance, claims are an issue for the insurers to deal with. We get many many "letters of claim" each and every day, pretty much all quote alleged H&S failings. There is a team employed in our head office purely to administer the claims, the team has trebled in the last 6 years or so, these employees are only administering the claims and not defending etc! Lots of letters concern nothing to do with H&S, but quote a general H&S failing (even when there was no duty of care in the first place in relation to the situation) and a proportion actually invent a scenario (which we rebuke when CCTV is reviewed). It is this culture that is the problem. Those letters that aren’t fraudulent are often due to a lack of common sense and not due to a breach of H&S legislation or a failure in the duty of care, however the insurance companies and solicitors require documentation that is grossly in excessive of that which is required by law and even in some circumstances that which is deemed best practice! When developing policies and procedures it saddens me that we have to take a cost / benefit analysis view of what checks / monitoring ect. we need have in placed NOT based on what is legally required, NOT what is even necessarily required for optimum H&S “performance” but based on expected civil claims and how best to defend these.

I believe one of the other panel members (in fact I know) is such a being - should make for an interesting event.

If you want objective evidence; I have seen increase in claims going across my desk in excess of 200% in last 12 months. But not in the ones I think are genuine!

It doesn't matter whether it is a myth, or fact. It is costing business money whichever way. Laws should be put in place forbidding anyone with an income lower than 60K from being able to employ legal assistance for anything. I promise not to mention the thousands dying every year from asbestosis/mesothelioma, nor the several hundred thousand injured by poor, or more likely non-existent, health and save-the-tea-for-me. Just so long as business, in all its inefficiencies, immorality and illegality, can save a fiver. Try stopping tax and vat fraud first...that'll bring more cash in. http://www.tuc.org.uk/extras/compensationmyth.doc

I very much doubt that the culture is a myth, not when the legal mechanisms stay in place to provide the main winner who is always the legal representative in 99.9% of the cases!

I second this!!

Frankly I find this response inappropriate in what was a reasonable question to health and safety professionals. Your reply makes you look far from that, serves no purpose and does you no credit. It has been said before, but posters do like to see a professional reply to our queries and this sort of thing does not help anyone.

On what grounds? Should only the rich be entitled to legal representation? Or have I completely misunderstood the statement? My experience is that the claims culture is alive and well, but there are genuine cases out there as well.

From my experience the claim culture is certainly out there and is alive and kicking. I work for a construction company and the claims received are ridiculous, I recently had a claim for severe whiplash caused by a member of the public walking in to a scaffold pole, now with the best will in the world I cannot walk that fast. There are genuine claims out there and we deal with these accordingly, however the problem lies with the claims where the balance of probability seems to favour the claimant. I have a good relationship with our insurers and we both seem to agree that these individuals are just seeing an opportunity to make money, let alone the cost incurred due to time and resources to deal with the false claims. please give feedback on the event as it would be great to see if there is opposition to this. Regards PaulR

For context, this landed on my desk today; The claimant is alleging that an accident occurred in a place they would never of had access to. The injury was allegedly caused when they were struck by an item we don't stock, dislodged by a piece of plant we don't use. I told our legal dept to send the claimants solicitors an invoice for admin costs (but what really knarks is that nothing will be done to hold these people to account and they will just try elsewhere)

Funnily enough, the insurance companies squealing about the costs are the ones selling information to the claims solicitors. Nothing like shooting yourself in the foot and then moaning about the pain. Quite simply, the legal costs are far too high in practically all civil claims. £40,000 compensation for a permanently damaged wrist and forearm and the legal costs are £70,000 ? Fortunately, the government say they will cap "success" fees (more squealing from solicitors and insurers) Not to forget that settled claims also include a "no more later if it gets worse" clause....which I consider the prime driver to settle a case. As to the actions to reduce soaring insurance premiums, maybe the government would also like to look at insurance premium taxation ? At the end of the day the losers are those who are injured and will be unable to claim compensation. Not the solicitors. Not the insurers. Not the employers (don't forget that employers liability insurance is subsidised by others....have an accident claim against you and your premium will not rise enough to reflect the increased liability) Not the H&S "consultants" Don't forget the 25 million that got diverted in miners compensation....by a legal company. But then...there is more than a hint of hypocrisy attached to this anyway......from a government owned and run by the financial industry.

Just to set the record straight: Victor Meldrew said "...companies have settled prior to court proceedings, mainly due to the high costs of disproving the claim, so obviously these incidents are not in the stats." Not sure about that - breach of EL policy conditions for employer not to pass claim onto their insurer. Vast majority of claims - both EL & PL - are dealt with by an insurer. Exception is generally the (few/rare) situations where a large firm has some form of self insurance arrangement. "Very few claims ever get to court" - that is the norm, court hearing is the exception. And why? Because costs rise exponentially and defendant loses ocntrol.... judge prefers claimant's expert, your witness "folds" giving evidence etc etc. And what is meant by "such claims are not in the sats"... what stats? Even if claim is settled out of court state benefits have to be rerpaid so that case willappear in claim stats prepared by the Compensation Recovery Unit. Phil

Just to test this topic - how many of you have recieved claims for industrial deafness over the last three months?

Victor, Global business - yep that's going to be able to do things that the 99% of normal i.e. typical UK SME type businesses can't. But - they still have to take out EL insurance with what is known as an authorised insurer i.e. one authorised to transact EL business. In such cases the employer can choose to handle claims themselves but it is not possible to opt out of repaying the Govt any state benefits paid to the injured employee. That is irrespective of whether the settlement is made with/without an admission of liability. Once benefits are repaid then the case is a "claim" in the CRU stats... and organisaitons such as Datamonitor that report on whether there is a rise in claims use such stats as the basis for their analysis. Phil

Decimomal, Some stats for you... look up Datamonitor on Google. Thier 2010 report on the state of the EL market is most up to date that is to hand. In 2009 year they observed a small fall in overall costs of EL claims - down by 0.3%.... as opposed to an increase of 9.6% in the 2008 year. They commented that the volume of claims i.e. numbers continues to decline. Using Compensation Recovery Unit figures they were able to report the total number of EL claims. In 2005/06 - 118,692 (inc Disease 43,715) In 2009/10 - 78,744 (inc disease 13,294) Compensation Culture? I leave you to decide They also commented that in 2009 a typical claim was £10k - comprising £3k of damages/compensation plus £7k of legal costs. PS As for comments about insurers... we collect money (premiums) and then give it back (compensation), hhoping for a "turn" a small proft on the transaction. Generally as a class of business EL has lost money for most of the past 25 years. Phil

Compensation Culture? I leave you to decide - I already have and it exists and is growing They also commented that in 2009 a typical claim was £10k - comprising £3k of damages/compensation plus £7k of legal costs - 7k of legal costs is typical in my experience and for what? Printing out a standard form with every piece of legislation imaginable and just the name and address changed PS As for comments about insurers... we collect money (premiums) and then give it back (compensation), hhoping for a "turn" a small proft on the transaction. Generally as a class of business EL has lost money for most of the past 25 years - seriously, are you expecting us to believe that Insurers have been making a loss for a quarter of a century? That is an unsustainable business model. What is not measured is the time and costs associated with successful defence of a claim. If these costs were recoverable many solicitors would not even attempt the 'fishing' claims.

Yep losing money is not a sustainable business model. No (well hardly any) insurers underwrite EL and nothing else... they look to cover the property and perhaps the motor risk for a firm and try to make a profit across all the classes of insurance. But sometimes the "pips squeak" - those with longish memories may recall the EL Crisis back in 2000-2002. Almost overnight EL premiums went up. By 20/30/70%... big outcry all around. Investigations by OFT (regarding possible collusion/anti-competitive approach amongst insurers) DWP (to investigate whether the "model" worked) etc. HSE investigated whether rising premiums were driving firms to not take out EL insurance (no evidence that levels of non-insurance had risen). Insurance is a funny old business! Not quite as simple as collecting premiums and paying claims. And it should be remembered that legal costs are paid from premiums thus all firms are paying in the long run. Phil

Decimomal, Back in 2001/2002 I remember that the ratio of insurance costs for a small scaffolding company represented about 10% of the total turnover of that company and for small asbestos companies it was possibly even higher. It may be worth investigating this link again as another example to measure the compensation culture.