It is important to bear in mind the following data when considering attacking personal injury laws on the basis of an alleged compensation culture. It is often exaggerated, and hopefully the following data can undermine such allegations.
The Empirical Evidence for a Compensation Culture
(a) Claim Rate
The greatest problem in establishing the claim rate is the absence of systematic long-term surveys. As Lewis et al explain, there has been “no comprehensive empirical investigation of the system” since ‘the Oxford Survey’. However, the Pearson Commission of 1978 is of some use. It approximated that there were 250,000 claims for personal injury in the United Kingdom that year.
In 1988, the Civil Justice Review approximated the annual level of negligence claims at 340,000. Although this shows substantial rise, Morris points out that “there is no information… as to how it was obtained”. Moreover, according to Lewis et al, it was “very small-scale and paid disproportionate attention to tried cases”.
It can be inferred that although no comprehensive long-term data can be determined, the Pearson Commission can act as a yardstick from which to ascertain subsequent developments. Thus, the contemporary figures, which will be analysed next, can be extrapolated from the Pearson Commission to deduce a certain trend. However, this remains to some extent doubtful, because even if a broad trend can be identified, it cannot be very precise. Furthermore, its lack of certainty adds little weight to the assertion that a compensation culture exists.
Nevertheless, substantial evidence accrues from 1998 which may provide an answer to the question of whether compensation culture is a real problem. The Compensation Recovery Unit (CRU), which collects social security benefits back from those who receive compensation, and therefore records the number of negligence claims, ended its exemption from notification of small claims that year. Lewis et al argue that this holds “the most comprehensive and reliable data on the number of current personal injury claims”. The CRU’s responsiveness, together with the public interest in precision on the numbers acquired in order for resources not to be wasted, gives force to this assertion.
In 1998, there were 705,232 claims. This indicates almost a tripling in the claim rate between 1973 and 1998. However, after this period of relative increase, the statistics do not continue to reveal an upward trend, but stagnate:
This represents a 2.7% rise over 5 years, compared with an average 38.8% rise per 5-year period between 1973 and 1998. Thus, a plateau appears to have been reached.
Furthermore, accident claims (as opposed to all negligence claims) have actually reduced in this period:
This reversed trend – of a 5% fall in accident claims – counters the view that the issue is accelerating quickly; indeed, accident claims are reducing in number.
It is necessary to briefly consider more specific sectors of claims, which highlights which areas which are more susceptible to claims. If the above set of accident claims is divided up, the following trends are apparent:
With the exception of motor claims, every other sector has seen statistical falls. Employer’s claims have fallen by 21%, public liability claims by 7% and medical claims by 34%. Miscellaneous claims have fallen by 43%. Thus the overall 5% decline in accident claims is obscured by motor claims. As they represent 70% of all accident claims, and over half (53%) of all negligence claims, they appear to prevent the overall figure from dropping in the same manner that the other categories fall by.
As Williams point out, Datamonitor can provide an alternative insight into recent statistics. It puts the 2000/01 overall claim levels at 744,060; followed by a 7.4% fall to 689,000 in 2001/02; followed by a 2.6% increase to 706,914 in 2002/03 (due to an increase on disease claims bucking the generic trend of decline). They are very similar to those shown by the CRU, and thus lend support to the CRU figures.
Clinical negligence statistics provided by the NHS replicate this trend, continuing up to the latest figures from 2009. There were 6,932 claims in 1997/8, falling to 6,257 by 2003/04, 5,470 by 2007/8, and 6,080 in 2008/9, never rising above 7,215 (in 2002/03).
(b) Propensity to Claim
Another element of compensation culture is the individual likelihood, or propensity, to claim. This could be established by examining the claim rate relative to the rate of negligent injury. Morris suggests that the propensity to claim increased in the last three decades of the 20th century. She points to the traffic-related injuries, where claims rose despite casualties not increasing. Furthermore, clinical negligence claims rose 100-fold between the Pearson Committee and the new century, despite accidents not increasing.
However, she also notes that the propensity to claim for clinical negligence remains low: at 2% of all negligent events resulting in injury. Moreover, the overall propensity to sue has remained “relatively stable” since 2000, or potentially since 1997-8. Furthermore, these statistics cannot convey the worthiness of the claims. It cannot be assumed that there has necessarily been a rise in unmeritorious claims.
An Ipsos MORI poll in 2000 revealed that 72% of people would “consider pursuing a compensation claim if they suffered a personal injury which they felt to be someone else’s fault”. This percentage falls to 57% when the defendant is a school, whilst 48% would feel “concerned at the prospect of taking their doctor or hospital to court”. This may seem high, but it includes people who would only consider claiming, and ultimately, 27% would abstain altogether. As with other categories, there is no such poll from earlier decades in order to show a change, thus reducing the ability to make inferences.
Why is this idea important?
It is important to remember the importance of such regulation. Furedi argues that as trade union activity declined in importance, negligence law became an alternative forum for the vindication of rights. Thus, a link can be highlighted between regulating risks through negligence law in industrial and commercial environments – therefore making employers in those environments more accountable to their employees – and providing greater reciprocal recognition. The process of regulating risks and providing corrective justice to those afflicted by inadequate risk regulation can be interpreted as part of this trend towards greater mutual recognition, because it confers a greater degree of respect.
By providing greater mutual respect, greater equality is fostered. The two concepts are inextricably linked, because mutual respect provides legal consequences providing greater fairness. This greater equality can in turn amount to greater liberty for the employees, in the sense of providing freedom from unfair risk. A greater ability to seek corrective justice through negligence law is a manifestation of the process of greater fairness, a key aspect of the coalition's policy mantra.
Any attempt to cut business regulations must therefore be tempered with a concern to maintain corrective justice for employees in the private sector, or a key aspect of the coalition's ideology – fairness – will be undermined. A balance between responsibility and fairness is required – but that means putting fairness at the heart, to be then altered by concerns over responsibility, not the other way around.