The Compensation Culture of the United Kingdom PDF

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An assignment about the compensation culture which received 23/25 marks....

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There exists a culture undenounced to many, it can be seen prominently in the United Kingdom where even the slightest inconvenience, they would seek compensation or damages to repay them. This is called the compensation culture of the United Kingdom. Although, there is no evidence of statistics which prove the above only the Pearson Royal Commission (1978)1. The compensation culture is defined as, when a misfortunate act which was brought upon a person by another, he has the right to seek repayment for the sufferings but the literal meaning is for people to seek compensation for the slightest inconvenience as stated by Baroness Hale of Richmond in Majrowski v Guy’s and St Thomas’ NHS Trust (2006)2. This culture is said to be one of the most detrimental aspects in a fair litigation process. It was noted in the case of Tomlinson v Congleton Borough Council (2003)3 where the increase of compensation culture was made aware by the judges and they were inclined to reduce the findings of liability. It came about due to the social attitude that the people in the United Kingdom have, it is more focused on personal injury claims but could go beyond that. The claims have risen ever since the 1970’s it might be due the they fact they found awareness towards their rights

The aim of tort is to compensate but to what extent. In compensation there are two theories that exist which are, compensatory and reparative theory. These theories state that if one party cause injury to another, he must be compensated not taking into account if the fault was on him or not. Based on the Better Regulation Task Force, Better Routes to Redress (2004)4, it was stated that compensation culture does have a negative effect in many sectors of the economy such as the legal sector and the draining of public sector resources as the amount of money needed to run a full case hearing is extremely expensive and will cost the taxpayer millions of pounds a year. It will also make businesses and organisations fear the litigation process as everyone can sue them and claim compensation as it is within their rights to do so. Moreover, insurance premiums will inevitably as the rise in claims will spark fear. Also, people with indisputable claims will have a problem as it will clog up the whole litigation system and in turn the people who have serious claims are forced to wait and not able to seek swift justice. 1 Pearson Royal Commission (1978) 2 Majrowski v Guy’s and St Thomas’ NHS Trust [2006] 3 WLR 125 3 Tomlinson v Congleton Borough Council [2003] UKHL 47 4 Better Regulation Task Force, Better Routes to Redress (2004)

In order for a claimant to establish negligence on the defendant’s end, he must first prove that the defendant had owed this a duty of care which is the legal responsibility to take reasonable care to make sure no harm would be inflicted to another which was stated in the case of Donoghue v Stevenson (1932)5. This duty makes sure that a legal obligation had already been formed and the said person has to be careful in the said circumstance the already formed legal obligation will provide a means for the claimant to sue the defendant for negligence. This will also help to establish that the said defendant is the actual person who owed a duty by ensuring that the necessary legal nexus or the relationship between the claimant and defendant is right, only then a liability is present. Duty is also a tool to ensure that the liability is limited by making sure that it only occurs when there is a pre-existing duty as seen in the case of McLoughlin v O’Brian (1983)6. The general understanding is that negligence brings the meaning carelessness. However, it was stated by Lord Wright in the case of Lochgelly Iron v McMullan (1934)7 that by only proving that the defendant was negligent is not merely enough as the tort of negligence requires a breach of duty that in turn causes damages and is not too remote. Thus, in order to claim for negligence there must be established duty of care, proof that the defendant breached the duty and the breach had caused the claimant damages which are worthy for compensation.

When a person does not take precaution while doing an act, and because of his actions another party gets injured, this is considered negligence. At specific times, the law has set out a set of rules where there is no need to prove fault as there already exists a duty of care which is a strict liability as per the case of Nettleship v Weston (1971)8 where a driver and road user by general rule owe a duty to each other. Occasionally, the law finds the other party to be responsible even if they are not as imputed negligence will bring forth vicarious liability. An example of this is employer-employee cases such as, McGhee v National Coal Board (1973)9. At often times, the act itself states the negligent actions which can be found in the doctrine of res ipsa loquitur. A breach in duty of care is defined as when a defendant

5 Donoghue v Stevenson [1932] UKHL 100 6 McLoughlin v O’Brian [1983] 1 AC 410 7 Lochgelly Iron v McMullan [1934] AC1, 25 8 Nettleship v Weston [1971] 3 All ER 581 9 McGhee v National Coal Board [1973] 1 WLR 1

falls below the standard of a reasonable man as per Simonds v Isle of Wight Council (2003)10. In deciding the behaviour of a reasonable man, the courts have to consider these factors, the special characteristics of defendant and claimant, size of rise, was it practical to protect against the risk, the common practice in the relevant field and the benefits towards society that may be gained as a result of taking the risk.

The compensation culture would not have existed without the tort of negligence. This encourages people to find a negligent act that caused their detriment by doing so, they are able to seek council and find whether the company breached the duty of care owed to the claimant and will lead to a lengthy battle in the courts which will inevitably be settled with compensation. The tort of negligence in of itself is in dire need of reform as any Tom, Dick and Harry is able to file for a lawsuit which lead to the floodgates of litigation. A breach in duty is very easy to find as such a claim would be even easier to justify. Moreover, the courts tend to be favourable towards the claimants rather than the defendants as such the people will “have a go” at trying to claim for compensation by stating the company or person was negligent on their end. These instances are seen in the actions of Michael Sams. In the case of Tomlinson v Congleton Borough Council (2003)11 it clearly shows the boundary of trivial litigation as by doing the act that was prohibited, he had already accepted the harm that might occur therefore he could not put the blame onto the defendant. This case is considered a milestone ruling where people have to take responsibility for their actions. And thus, shows the society’s belief in the compensation culture.

In other branches of tort however, a compensation culture is said to also be existent such as in the occupiers’ liability. It is defined as the duty of care owed by the owners of the land towards those who come onto the land. Despite that, the duty towards the land owners can go beyond simple land ownership and it is possible to transfer duty to other people. The occupiers’ liability is unique in the sense that a duty of care, a breach of said duty and damage caused has to be present for it to be considered negligence. Remoteness is also a crucial part of occupiers’ liability by way of omissions, the occupiers have relationships that forms a duty to carry out actions to ensure safety of visitors. This evolved from common law 10 Simonds v Isle of Wight Council [2003] QBD TLR 9 11 Tomlinson v Congleton Borough Council [2003] UKHL 47

and it can be found in the Occupiers Liability Act 195712 and 198413. In the case of Lowery v Walker (1911)14 the repeated trespass onto land while without permission, was deemed by courts that it did not matter as a licence was implied and as such the defendant was liable. A contrast case is the case of Edwards v Railways Executive (1952)15 where no licence was applied as the defendant had taken steps to deter people from trespassing.

These protections are limited and are not valid for trespassers, visitors who overstay their welcome and persons on land exercising public and private right of way. In the compensation culture, it is easy to say that the injuries that they have sustained are in line with the Occupiers’ Liability Act 1957 and seek for compensation for the injuries they had suffered. Although many claims have been made towards the courts in regards to occupiers’ liability, most claims are disregarded as seen in the cases of McGeown v Northern Ireland (1994)16 and Holden v White (1982)17 where both claims failed after sustaining injuries on public and private right of way. This however has not put a stop on compensation culture in occupiers’ liability as many people still seek for compensation if their injured in someone else’s land.

The question arises whether intentional infliction of emotional distress has promoted compensation culture. This brings meaning of extreme or outrages actions that intentionally or recklessly causes emotional distress and also bodily harm. Normally people have the ability to not succumb to such actions but there are instances where these distresses are too much for a person to take as per the case of Farley v Skinner (2001)18. The claim of emotional distress is extremely vague and there are not many past precedents for judges to use as a reference. As such, society is more than likely able to claim a compensation using this tort. This can corelate to personal injury claims as well. While it is easy to prove emotional distress, the courts have set out rules to deter people from seeking compensation such as, the person had to have suffered the distress that a normal person cannot take.

12 Occupiers Liability Act 1957 13 Occupiers Liability Act 1984 14 Lowery v Walker [1911] 15 Edwards v Railways Executive [1952] 16 McGeown v Northern Ireland Housing Executive [1994] 3 All ER 53 House of Lords 17 Holden v White [1982] 2 All ER 328 Court of Appeal 18 Farley v Skinner [2001] UKHL 49

Nevertheless, it did not reduce the claims towards this tort and a build-up of cases is apparent in today’s judiciary system. These claims have led to the increase in revenue for insurance companies selling personal and third-party insurance when being sued, for companies and personal use.

The judiciary and parliament have both tried to put an end to the so called “nonexistent” compensation culture. The judicial system has limited the scope of liability when deciding the cases which are under the tort of negligence. A case that illustrates this is the case of Gorringe v Calderdale MBC (2004)19 where an accident occurred as there were no visible road signs on the road warning the road users to be careful of a sharp bend coming up as the authorities are to warn the road users of potential dangers. The courts held that the driving of the individual should already be taking precaution while driving and not in a manner than would cause harm as such he should not blame the council for the lack of warning signs. Another case that demonstrates the concerns of compensation culture is the case of Miller v Jackson (1977) 20 where the claimant wanted the stop of all sporting activities as the cricket balls were entering Miller’s garden. The claim was first successful but later overturned and a small compensation was offered for previous and future occurrences.

Both the cases of Tomlinson21 and Gorringe had received widespread coverage as a result, Parliament has to intervene and implemented the legislation called Compensation Act 200622 where the contents of the legislation were defined by one Catharine Fairbairn which stated, in order to put a halt to the ever-developing compensation culture would actually lead to a misunderstanding and a fear of litigation and risk-averse behaviour. The aim of this legislation is to discourage and disprove bad or false claims and enhance the system for the legitimate and valid claims for compensations. This piece of legislation has been criticised as the aim of the legislation is to address and tackle a so-called myth which was brought to light by the media’s reports. Another legislation is The Social Action, Responsibility and Heroism Act 201523 whereby any claims to negligence must first face the

19 Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15 20 Miller v Jackson [1977] 3 WLR 20 Court of Appeal 21 Tomlinson v Congleton Borough Council [2003] UKHL 47 22 Compensation Act 2006 23 The Social Action, Responsibility and Heroism Act 2015

courts assessment on whether he was acting on the benefit of society or any of its members or responsibly protecting the safety of others which was not a good legislation.

In the academic standpoint however, numerous publications have surfaced regarding the compensation culture and its existence such as the Better Regulation Task Force, Better Routes to Redress (2004)24 which stated that the compensation culture came about for the people to ‘blame and claim’ should be frowned upon which is greed rather than trying to achieve justice and enforcing their rights. As the act of not paying the lawyer if the case is lost or in other words ‘no win no fee’ arrangements and also the claim managements companies have made accessing justice easier but this in turn will make people want to ‘have a go’ at claiming compensation for the wrongs they felt they had suffered. Due to the fact that society has developed rapidly over the past several years, the people are more than ever aware of their rights but there are still few who can be easily persuaded by the media or claims management companies to claim compensation when there is nothing to claim for which has led to various outcomes. On the positive side, schools do not cancel trips and outings as portrayed in the media but rather manage their risks accordingly.

It was stated in this publication that compensation culture is all in the mind and thus should not believe everything read as there is of little or no truth at all this is seen in the McDonalds coffee case25 as the newspapers highlighted this case for compensation culture. Litigation is not easy as majority of cases never make it to courts the claimant must prove negligence on the defendants end but new cases are likely to go to litigation unlike what the media is saying that it will not succeed. The perception of the compensation culture is fuelled by the media which only want to generate revenue though readers. Another such publication is ‘State of Fear: British “Compensation Culture” reviewed’26 by K. Williams it claims that too many successful claims have been given also, the legitimate claims are counted in as the ‘problem’. It also states that the real problem is whether a real irresponsible litigation is possible as many are afraid of being unfairly sued which in turn reduced risk-adverse behaviour. Companies are cutting relevant items in work ethnic and focusing more on safety precautions in order to negate all claims and liability. There is no 24 Better Regulation Task Force, Better Routes to Redress (2004) 25 Liebeck v McDonald’s Restaurants 26 ‘State of Fear: British “Compensation Culture” reviewed’ (2005)

doubt that the judiciary system is to blame for the rise of cases being able to claim compensation but insured defendants tend to be in the grey area with uncertainty.

In conclusion, as the data we are provided is not significant enough to make a solid and reliable answer, we can see that the British love their litigation system and praise it widely even if there are cracks in the system which is the never-ending compensation culture. The statistics proved the number of personal injury claims have risen over the years but none is about the false claims. Insurance companies are taking advantage of the broken system and it justifies them to increase the pricing. Even with the passed legislation by Parliament tying to tackle the so-called problem, it has been widely criticized and not being of importance as they state that the culture does not exist and is a blanket of lies for the public to throw shade on the legislative bodies of the United Kingdom. Although many people beg to differ, I think that the compensation culture has made people more careful in doing things such as driving and even while setting up the company’s health and safety plans which benefits the people largely. As stated by Lord Young, some if not numerous restrictions should be made on how claims companies have to advertise their products as to not spark fear in the public. I do believe that the compensation culture exists in the United Kingdom but to some extent only. Even though there is no hard evidence to be found and the media is adding to the fire, if you take a closer look into the law of tort, we can see many false claim cases coming to light and thus led me to make my assessment.

Although reforms have been made in order to tackle the compensation culture of the United Kingdom, most have failed and was not able to reduce or negate people from making false claims and bringing them into litigation. A further reform is required in order to set out straight what the people can and cannot do when wanting to claim for compensation a few examples to take into account while drafting a new reform is, to reduce the limitations period or claiming period for bringing cases to courts, normally it is 3 years but reducing it to 12 months can have drastic changes in the perspective of the public. Another is, making time limits and providing thresholds in which the claimant had to have suffered a significant injury or illness withstanding a set period of time in order to be eligible to claim as this will show that the injury was serious and not merely a fast cash grab. Next, medical evidence of the injury should be provided to the courts and only accepted if the symptoms last a set amount of time also, talking a stance in logic rather than human nature and understanding the percentages of actual disabilities that would lead to an actual claim. Lastly is to include a predictable damage clause in which he had to have been injured beyond the threshold for a claim to be succeeded this in turn, reduces the amount of people who come into litigation and make it run smoother and for justice to be served swifter. The government should also ban all referral fees which are kept in the dark with no actions from whistle blowers. And also reduce the fees in which a lawyer is able to charge in low-value personal claims and if this is not possible, then increase the small track claims from the small amount of £1000 to a minimum of £5000.

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Bibliography Primary Resources Cases and Statutes 1. Pearson Royal Commission (1978) 2. Majrowski v Guy’s and St Thomas’ NHS Trust [2006] 3 WLR 125 3. Tomlinson v Congleton Borough Council [2003] UKHL 47 4. Donoghue v Stevenson [1932] UKHL 100 5. McLoughlin v O’Brian [1983] 1 AC 410 6. Lochgelly Iron v McMullan [1934] AC1, 25 7. Nettleship v Weston [1971] 3 All ER 581 8. McGhee v National Coal Board [1973] 1 WLR 1 9. Simonds v Isle of Wight Council [2003] QBD TLR 9 10. Occupiers Liability Act 1957 11. Occupiers Liability Act 1984 12. Lowery v Walker [1911] 13. Edwards v Railways Executive [1952] 14. McGeown v Northern Ireland Housing Executive [1994] 3 All ER 53 House of Lords 15. Holden v White [1982] 2 All ER 328 Court of Appeal 16. Farley v Skinner [2001] UKHL 49 17. Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15 18. Miller v Jackson [1977] 3 WLR 20 Court of Appeal 19. Compensation Act 2006 20. The Social Action, Responsibility and Heroism Act 2015 21. Liebeck v McDonald’s Restaurants

Judges Names 1. Baroness Hale of Richmond 2. Lord Wright 3. Lord Young

Academicians 1. Catharine Fairbairn 2. K. Williams

Secondary Resources Websites 1. (Legislation.gov.uk, 2020)

accessed 29 November 2020 2. (2020...