The compensation culture: Cliché or cause for concern?

Journal of Law and Society

Volumn 37, Issue 4, 2010, Pages 569-591

  Hand, James ^a  

^a UNIVERSITY OF PORTSMOUTH   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 78649951431     PISSN: 0263323X     EISSN: 14676478     Source Type: Journal    
DOI: 10.1111/j.1467-6478.2010.00522.x     Document Type: Article

References (80)

1. From three times, twice, and seven times, in 1995, 1996, and 1997, to highs of 259, 269, and 459 times in 2002, 2003, and 2004. The number has fallen since then but it is still much higher than in the late 1990s; there were 134 mentions in 2006 and 2007 and 111 in 2008 (LexisNexis search).
2. J. Peysner, 'Compensation crazy - too much claim and blame?'Times, 28 May 2002. Such fears fail to take into account that United Kingdom legal and social systems are very different from those of the United States. Indeed, Kritzer's study found these differences to be cultural as well as legal: 'the stereotypical images of the stoic English person and the complaining American are more than just stereotypes' (H.M. Kritzer, 'Propensity to Sue in England and the United States of America: Blaming and Claiming in Tort Cases' (1991) 18 J. of Law and Society 400). He went on to agree (p. 426) with Atiyah's dismissal (P.S. Atiyah, 'Tort Law and the Alternatives: Some Anglo-American Comparison' (1987) Duke Law J. 1002) of contingency fees as an explanation for Anglo-American differences, not least because contingency fees are also forbidden in Australia where the claiming pattern does not resemble the English one but is much closer to that of the United States.
3. See, for example, K. Williams, 'State of Fear: Britain's "Compensation Culture" Reviewed' (2005) 25 Legal Studies 499; R. Lewis, A. Morris, and K. Oliphant, 'Tort personal injury claims statistics: is there a compensation culture in the United Kingdom?' (2006) 30 J. of Personal Injury Law 87; A. Morris, 'Spiralling or Stabilising? The Compensation Culture and Our Propensity to Claim Damages for Personal Injury' (2007) 70 Modern Law Rev. 349-78; Better Regulation Task Force (BRTF), Better Routes to Redress (2004).
4. The earliest mention is in B. Levin, 'Addicted to welfare'Times, 17 December 1993.
5. Morris, op. cit., n. 3, pp. 350, 363.
6. Williams, op. cit., n. 3, pp. 500-1.
7. These allowed for a (more restricted) success fee as opposed to the American contingency fee whereby lawyers take a percentage of the award; the first CFAs appeared in 1995 (created by the Conditional Fee Agreements Order 1995 (S.I. 1995/1674) under s. 58 of the Courts and Legal Services Act 1990) but the system wherein the loser pays the winner's lawyers' success fee dates to the Access to Justice Act 1999.
8. A report compiled for the Department of Constitutional Affairs shows that 'Advertising, and in particular TV advertising, seems clearly to be the main source of awareness when it comes to personal-injury compensation' and that readers of tabloid newspapers are more likely to believe that there is a culture of falsely claiming compensation than those who do not regularly read a tabloid (C. Edwards and L. Holme, Report on quantitative and qualitative research conducted for the Department for Constitutional Affairs (2006) 15, 17).
9. W.V.H Rogers, Winfield and Jolowicz on Tort (1998, 15th edn.) 65. Loosely translated as 'the wise man does not act over trifling things'. There appears to be no space for Winfield's version of the aphorism in the more recent edition of the eponymous text.
10. For more on the 'host of bads', see M. Galanter, 'Law Abounding: Legalisation Around the North Atlantic' (1992) 55 Modern Law Rev. 1, at 1.
11. 'Parents will have to foot bill if they sue schools'Times, 22 March 2004, 7; B. Johnson, 'Knock some sense into the children'Daily Telegraph, 7 August 2003, 18.
12. D. Davis, 'Victim nation'Spectator, 21 August 2004, 16.
13. P. Almond, 'The Dangers of Hanging Baskets: "Regulatory Myths" and Media Representations of Health and Safety Regulation' (2009) 36 J. of Law and Society 352, at 356. Or as Haltom and McCann put it, in the context of the more rabid American tort reform debate, the underlying facts become 'truncated tales and polemical jeremiads': W. Haltom and M.J. McCann, Distorting the Law: Politics, Media, and the Litigation Crisis (2004) 147-8.
14. BRTF, op. cit., n. 3, p. 3
15. id., p. 14; for example in 2002, 38.8 per cent of County Court claims were for under £1,000 and 55 per cent were for under £3,000.
16. id., p. 15; between 1989 and 2000 United Kingdom tort costs amounted to 0.6 per cent of GDP (save for 1993 when it was 0.7 per cent) against a fluctuating figure of between 2.28 per cent and 1.88 per cent.
17. For defensive medicine, see P. Kennedy, 'Is This The Way We Want To Go' (2005) 29 J. of Personal Injury Law 117, at 126 and Davis, op. cit., n. 12. With regard to school trips, see A.L. Blair, 'Common sense culture not compensation culture', speech at University College London (26 May 2005), at <> ('in England in 2003 there were between 7 and 10 million pupil visits on school trips. Sadly, there was one fatality. But only one.'); Davis, op. cit., n. 12; and NASUWT press release, 'NASUWT reaffirms advice to members to avoid taking school trips', at <>. With regard to the punishment of writing lines, an investigation reported that of 50 state, private, and grammar schools contacted only two still allowed lines to be given out and that in one case, Repton School, the deputy head had been advised that 'setting lines was illegal under laws designed to protect children from degrading punishments' ('I Must Not Make Pupils Write Lines ... It's Degrading'Mail on Sunday, 10 July 2005, 45).
18. The Health and Safety Executive is seeking to combat some of these myths and has run a 'myth of the month' series since April 2007 (at <>) as well as rebutting stories as they occur. For more on regulatory myths see P. Almond, op. cit., n. 13.
19. BRTF, op. cit., n. 3, p. 13, the case that led Haltom and McCann to write their key work on the misrepresentation of cases in the United States media (op. cit., n. 13, p.ix).
20. Bogle and others v. McDonald's Restaurants Ltd [2002] EWHC 490 Q.B.; Field J 'found both Mr Hathaway and Mr Brazier [for McDonalds] to be truthful and reliable witnesses' (at 26) whereas he was 'bound to say I did not find Mr Ives an impressive witness' (at 25). See, also, for example, paras. 19-25, 39 and 51.
21. Tomlinson v. Congleton BC [2003] UKHL 47; [2004] 1 A.C. 46; Rhind v. Astbury Water Park Ltd [2004] EWCA Civ 756.
22. Martin (formerly Collier) v. Peterborough City Council [2003] EWHC 2925.
23. McTear v. Imperial Tobacco Ltd [2005] Scots CSOH 69; Lord Nimmo Smith held that she had failed to establish breach of duty and causation in relation to her husband's lung cancer.
24. The lamp-posts having been checked for metal fatigue and neoprene collars fitted (St. Edmundsbury Borough Council, 'Bury St Edmunds Will Be Blooming Beautiful Again This Summer', at <>. The story of hanging baskets being banned from lamp-posts is, as mentioned above, an off-cited example of the ridiculed 'compensation culture'. See, also, Almond, op. cit., n. 13., pp. 355-6. While there have been 'hanging basket' stories involving other councils, Bury would appear to be the first.
25. Department for Constitutional Affairs (DCA), 'Tackling the "Compensation Culture"' (2004).
26. Blair, op. cit., n. 18.
27. For example, the judgment in Tomlinson, op. cit., n. 22; it is interesting to note that a few months earlier the Home Office refused to support a change in legislation regarding intruders, insisting new guidelines would be sufficient to clarify the law (see, for example, <> and the debate surrounding the passage of Patrick Mercer's Householder Protection Bill).
28. The NHS Redress Act 2006 has similar aims and was announced in the same Queen's Speech but does not explicitly follow on from the BRTF report. The Act paves the way for an alternative to litigation, aiming to provide quicker redress for low-value clinical negligence cases, including investigations, apologies and, if appropriate, financial redress thereby reducing costs to the NHS and to claimants. However, the provision (s. 1) enabling the Secretary of State to set up such a scheme by regulations is, some four years on, not yet in force.
29. Ministry of Justice, Claims Management Regulation: Impact of Regulation - Initial Assessment (2007).
30. BRTF, op. cit. n. 3, p. 11; Lewis et al., op. cit., n. 3.
31. Lewis et al., id, p. 102. The occasional spike in claims relates directly to disease claims and the effect of the British Coal respiratory and hand-arm vibration syndrome claims under the DTI's Chronic Obstructive Pulmonary Disease (COPD) Scheme and the Vibration White Finger (VWF) scheme.
32. There appear to be two sets of CRU figures, the ones above are from the same set as those used by Lewis et al., id.; Morris, op. cit., n. 3; and in Jackson LJ, Review of Civil Litigation Costs: Preliminary Report (2009) ch. 6, para 4.3, at <> and as published on the CRU website (<>). The figures in appendix 25 to Jackson LJ's Preliminary Report covering 2005/06 to 2008/09 and sourced from the CRU show very different figures across the types of claim from those quoted in the report (for 2006/07 and 2007/08) and from those which appear in the above sources - with differences being up to +/- tens of thousands. However, the general picture is similar with claims being broadly stable or reducing apart from the motor-related claims which again see an increase, at a slightly lower rate (21 per cent for 2005/06-2008/09 as opposed to 36 per cent).
33. Constitutional Affairs Committee, Third Report, Compensation Culture HC (2005-2006) 754-II. See, also, references in H. Teff, 'Personal injury: Righting mental harms' (2009) 159 New Law J. issue 7384: 'Recent statistical data on the incidence of personal injury claims in general point to relative stability since 1997-8 (Compensation Recovery Unit figures for 2000-8), despite the marked growth in advertising and "no-win no-fee" arrangements'; M. Lyons, 'Jackson - an initial response' (2010) 34 J. of Personal Injury Law 74, at 78: 'Compensation Recovery Unit figures show that broadly over the past 10 years the volume of cases has remained stable'.
34. Furthermore, tort costs as a percentage of GDP would be expected to increase whereas they remained relatively constant between 1989 and 2000, see n. 17 above.
35. J. Matheson and C. Summerfield (eds.), Social Trends 30 - 2000 edition (2000) 162-3.
36. 1981 claims issued: County Court 1.996 m. Queen's Bench 0.183 m, total 2.179 m. (source: National Statistics, at <>; Industrial Tribunal figures going beyond 1985 are not available (a point noted by S. Burgess, C. Propper, and D. Wilson, Explaining the Growth in the Number of Applications to Industrial Tribunals, 1972-1997, DTI Employment Relations Research Series no. 10 (2001) 13).
37. The High Court and County Courts Jurisdiction Order 1991 (S.I. 1991 no. 724).
38. By the High Court and County Courts Jurisdiction (Amendment) Order 1999 (S.I. 1999 no. 1014), in force from April 26 1999.
39. N. Armstrong, 'The litigation myth' (1997) 147 New Law J. issue 6801.
40. Department for Constitutional Affairs (DCA), Further Findings: A continuing evaluation of the Civil Justice Reforms (2002), at <>.
41. See, for example, Armstrong, op. cit., n. 40; G. Slapper, 'Why We Need More Lawyers' (2003) Law Society Gazette 100.43 (15)
42. F. Furedi, Courting Mistrust: The hidden growth of a culture of litigation in Britain (1999); K. Qureshi, 'Opinion'The Lawyer, 14 June 2004, 15.
43. Compare the regional Bar as most mediation and arbitration specialists are based in London (The Lawyer, 21 May 2001, 6).
44. Furedi, op. cit., n. 46, pp. 9-10.
45. CEDR, 'CEDR mediation figures reach all time high' (press release, 24 February 2004), at <>.
46. See, for example, Lord Phillips MR, quoted in DCA, op. cit., n. 41, para. 3.24.
47. Morris, op. cit., n. 3, p. 356.
48. J. Spier (ed.), The Limits of Liability: Keeping the Floodgates Shut (1996) 2; Furedi, op. cit., n. 46, pp. 10-12; Morris, op. cit., n. 3, pp. 355, 357.
49. Williams, op. cit., n. 3, p. 504.
50. Burgess et al., op. cit., n. 37, p. 13.
51. 2005 is the most recent figure available from Social Trends but while the figures are ultimately derived from Judicial Statistics there appears to be a discrepancy in the 2005 figure. Cross-referencing the Social Trends figures with those in Judicial Statistics shows that the previous figures for County Court claims appear to include claims for recovery of land whereas the 2005 figure includes 'money' claims only.
52. V. Keter, Employment Tribunals, House of Commons Research Paper 03/87 (2003), at <>.
53. See, for example Lewis et al., op. cit., n. 3, p. 87.
54. The average number of professional negligence claims and originating proceedings issued in London for the 3-year periods 1996-1998, 1999-2001, 2002-2004, and 2005-2007 is 667, 220.33, 173.67, and 56.67 (Judicial Statistics reports 1998-2007).
55. Armstrong, op. cit., n. 40.
56. The percentage of trials with judgment for the claimant has remained reasonably constant over the same period averaging around 74 per cent in the County Court and 76 per cent in the Queen's Bench.
57. Furedi, op. cit., n. 46, p. 17.
58. The Law Commission, Liability for Psychiatric Illness, LC249 (1998) considered that their proposals to remove some of the restrictions with regard to liability for psychiatric illness (for example, removing proximity 'in time and space' and increasing the list of those deemed to have proximate 'ties of love and affection') would lead to an increase of just 10 per cent in motor accident claims.
59. Gleaner v. Abrahams [2003] UKPC 55; for such fears see, for example, 'And now it's payback time: are we set for a return to the huge libel payouts of the 1980s?'Independent, 12 August 2004: 'a landmark judgment by the Privy Council could open the floodgates for the rich, famous and litigious'.
60. Sweet & Maxwell, 'Number of defamation court cases on the decline' (press release, 26 August 2005).
61. Sweet & Maxwell, 'Proportion of defamation cases featuring celebrities continues to rise' (press release, 9 October 2008) at <>.
62. In Sweet & Maxwell, op. cit., n. 64.
63. The figures for the Royal Courts of Justice for 1996/97 and 1997/98 were 201 and 452.
64. Lewis et al., op. cit., n. 3, p. 99. Furthermore, Jackson LJ, in his preliminary report on costs, refers to a study by Fenn, Vencappa, O'Brien and Diacon (presented in written evidence to the Commons Select Committee on Constitutional Affairs in 2006) which found, with regard to employers' liability cases, that while costs had increased as a result of CFAs there was actually a lower propensity to litigate claims which are funded under CFAs with after-the-event insurance (Jackson, op. cit., n. 33, p. 96).
65. Ministry of Justice, Conditional Fee Agreements in Publication Proceedings: Success Fees and After the Event Insurance (2007), at <>, cited in Jackson, id., p. 342.
66. Indeed, Ashby and Glasser contend that the costs of a defamation action are such that, with the addition of the success fee, the defendant's costs may rise above the reasonable and proportionate level and thus be incompatible with the right to a fair trial (cited in A.A.S. Zuckerman, 'Cost capping orders in CFA cases improve costs control but raise questions about the CFA legislation and its compatibility with Article 6 of the European Convention on Human Rights' (2005) 24 Civil Justice Q. 1, at 12.
67. Musa King v. Sunday Telegraph [2004] EWCA Civ. 613 (affirming EWHC 1312); Zuckerman, id, p. 5.
68. See, for example, <> for a summary of the troubled existence of the draft Conditional Fee Agreements (Amendment) Order 2010.
69. Jackson LJ, Review of Civil Litigation Costs: Final Report (2009) 324-7, at <>.
70. The prospect of a comprehensive defamation bill was announced, in an unusually certain way, by Lord McNally, Minister of State, during the Second Reading of Lord Lester's more limited Defamation Bill, see 720 H.L. Debs. cols. 477, 480 (9 July 2010).
71. The total number of claims as a percentage of the total of the multi-jurisdiction breakdown of claims is: (98/99) 61.8 per cent; (99//00) 58.8 per cent; (00/01) 59.8 per cent; (01/02) 57.8 per cent; (02/03) 57.2 per cent; (03/04) 58.3 per cent; (04/05) 55.2 per cent; (05/06) 57.1 per cent; (06/07) 55.6 per cent; (07/08) 63.7 per cent.
72. Burgess et al., op. cit., n. 37, p. 3.
73. Following the ECJ cases of Vroege v. NCIV Instituut voor Volkshuisvesting BV (Case C-57/93) and Fisscher v. Voorhuis Hengelo BV (Case C-128/93) [1995] ICR 635 and the House of Lords decision in Preston & Ors v. Wolverhampton Healthcare NHS Trust and Others (No 2) [2001] 2 A.C. 455; such cases made up just under 50 per cent of the live applications outstanding each year for much of the first half of this decade.
74. Department of Work and Pensions v. Thompson [2004] IRLR 348; the peaks in other claims in 2000 and 2003 reflect the introduction of the part-time workers regulations (claims in subsequent years under which have been less than a twentieth of the 2000 figure) and a large multiple case under the Working Time Regulations heard at Watford (Employment Tribunal Service, Annual Report and Accounts 2003-2004 (2004) 23).
75. Employment Tribunal Service, Annual Reports 1999/00-2004/2005.
76. Although introduced by the Disability Discrimination Act 1996, as with the subsequent legislation, it takes a few years for the flow of cases to really start.
77. The increases due to the new jurisdictions were 1998 13.21 per cent; 1999 18.55 per cent; 2000 8.91 per cent; 2001 15.68 per cent; 2002 21.24 per cent; 2003 18.42 per cent; 2004 19.39 per cent; 2005 13.30 per cent; 2006 9.12 per cent; 2007 9.70 per cent. The low values in 2006 and 2007 correspond to the peaks caused by the mass Local Authority Equal Pay claims. The raw figures show an increase from 3,151 in 1998 to 10,073 in 2007 (the first full year of the Age Regulations).
78. Law Society, 'Memorandum submitted by the Law Society to Trade and Industry Select Committee', at <>.
79. Taking 2001 as an example, the median award in the United States for employment discrimination was $166,000 and the average $615,247 (from T.H. Cohen and S.K. Smith, Civil Trial Cases and Verdicts in Large Counties 2001 (2004)). Furthermore, the American Weeks v. Baker & McKenzie case saw an award which 'was over twice the total amount awarded to all successful claimants of sex discrimination in Britain for 1998' (J.M. Kelly and A. Sinclair, 'Sexual harassment of employees by customers and other third parties: American and British views' (2000) 31 Texas Technical Law Rev. 807, at 865; compare J.M. Kelly and B. Watt, 'Damages in Sex Harassment Cases: A Comparative Study of American, Canadian, and British Law' (1996) 16 New York Law School J. of International and Comparative Law 79, at 98-105).
80. This concern over increasing liability is by no means limited to the United Kingdom. In Spier, op. cit., n. 52, a marked trend in Austrian law of increasingly allowing injured parties to pass on their damage is noted, for example, along with the potential for 'delictual inflation' in Greek tort law and the 'extension de la notion de faute, multiplication de cos de responsabilité sans faute ... [et] générosité croissante des tribunaux pour l'indemnisation de certains dommages; ('the extension of fault and strict liability and the increasing generosity of tribunals with regard to some types of harm') in France (p. 2). It is also a big topic in the United States with much written about it on both sides of the debate, for example, Kritzer, op. cit., n. 2; Galanter, op. cit., n. 10; Spier, op. cit., n. 52; and J.T. Nockleby and S. Curreri, '100 Years of Conflict: The Past and Future of "Tort Retrenchment"' (2005) 38 Loyola of Los Angeles Law Rev. 1021. Belgium, by contrast, 'is apparently not inclined to find ways to keep the floodgates shut' (Spier, id, p. 3).