12 May 2005
The idea of a compensation culture is well and truly alive in todays media. The subject fills column inches in newspapers with reported claims for apparently exorbitant sums squeezed out of apparently unworthy and frivolous tort responsibility cases. Secondly, claims management companies encouraging people to have a go have added to this perception that compensation is easily accessible. One belief is that the Human Rights Act is to blame for this apparent trend.
The reality of a compensation culture, however, is not so evident. Statistics from the Compensation Recovery Unit show that the number of accident claims registered fell by nearly 60,000 in 2003-04, while over 55 per cent of county court awards in 2002 were for less than 3,000 (Compensation Recovery Unit 2003-04, at www.dwp.gov.uk/advisers/ compensation_recovery.asp).
However, in assessing the existence of a compensation culture, it should be taken into account that many claims are actually settled out of court. Furthermore, workload and associated costs of assessing the merits of every claim can pose a real burden on businesses and local authorities.
It is also argued that the blame culture has interfered with the liberty of the citizen. The danger, as warned by Lord Falconer on 10 November 2004, is that lots of organisations like schools, like the voluntary sector, like local authorities, are so worried about claims being brought against them that they dont do things that everybody would like to do.
On the other hand, the threat of litigation, or just a complaint, can have some positive effects. It may lead to improved risk assessments in the case of schools and maintenance work by local authorities. It can also help to improve the provision of goods and services without the need for government intervention.
But such positive effects of a compensation culture may be accepted with difficulty in cases where tort responsibility is so far-fetched that the real winners become the wrongdoers and undeserving. There are times where an individual can find no real fault, other than his own, for the tort he has suffered. But the compensation culture suggests that still he may blame and claim, that large sums of money may be readily available to compensate his loss from his supposed blamee. Is this because, now as an individual, he is much more informed about his rights and is aware of when there may be a case to answer, because the Human Rights Act was indeed passed in 1998 with the intent of bringing rights home? Has this fuelled the compensation culture?
The Human Rights Act 1998 came into force in October 2000, raising the question of whether it would herald a change of culture leading to a comprehensive awareness of human rights, with public bodies taking positive steps to protect the rights of vulnerable people. However, four years on, this ideal is still a long way off: multiple government departments continue to present Parliament with bills that push away the boundaries of compatibility with the Human Rights Act. Indeed, it is unsurprising that the Human Rights Act has failed to guarantee a culture of rights when there is so much ambivalence towards its principles within the Government itself. And so it is clear that, unsupported by a human rights culture, the Human Rights Act has been misunderstood and become a scapegoat for the compensation culture.
This is despite the fact that individuals had access to the European Convention on Human Rights long before the appearance of a compensation culture. Secondly, the Act, having now incorporated the Convention into UK law, has not altered the law of negligence.
What the Act has done is to provide a floor for human rights: what we believe we are all entitled to. And whereas the compensation culture is defined by frivolous and dubious claims, it is ludicrous to blame the Human Rights Act: the very Act that portrays our ambitions and the principles that we are to adhere to. One should wonder: how can a claim ever be frivolous when it is rightly based on one of those fundamental values?
The answer is: it cannot, unless claims are of course wrongly based on one of those fundamental human rights. The compensation culture clearly concerns those dubious and frivolous claims; therefore what is to blame cannot be the Human Rights Act but lawyer practice: arrangements that encourage individuals to blame and claim endlessly. In particular, the no win, no fee arrangements enable individuals to mount claims even though they may not have any reasonable chance of succeeding.
But the no win, no fee arrangements find their origin in the Access to Justice Act 1999s reforms, which shifted the burden of funding personal injury claims from the public to the private sector. In essence, a system was created where the client perceived no risks in lodging claims. And claims management companies have been quick to take advantage of this system. The Government has rightly recognised this problem inherent to the industry and has demanded self-regulation.
The argument may therefore have been made that the Human Rights Act is responsible for fuelling the so-called compensation culture: such reasoning is flawed. The term compensation culture refers to the flooding of the compensation system by unworthy claims; however, it is clear that a claim cannot be unworthy when it is based on the rights that we uphold as most fundamental in a democratic society.
This is an edited version of Theobald Naud's winning essay.
Full version to appear here soon.