Is the Compensation Beast about to be tamed?

The UK compensation culture has grown exponentially and some would say is out of control. Not only are the public aware of their “rights” but the blame culture has become part of modern day living.

People seem to have forgotten that they have a responsibility for themselves and their actions, they believe they have a “right” to claim and that the faceless insurance companies pick up the bill so it doesn’t really cost anyone anything.

We all know how wrong they are as insurance claims invariably mean an increase in insurance premiums.

Insurance companies often find themselves between a rock and a hard place. They’d like to fight the claims where possible, and do so successfully in a number of instances, but all too often they know that the legal system will favour the claimant. Fighting a claim can waste an awful lot of money on legal costs, only to lose in court and often on a technicality, so they end up throwing good money after bad and vastly escalate the cost of the claim.

The cheapest option is usually for the insurers to pay the claim without too much of a fight and there’s no doubt that this has resulted in them being seen as an easy touch and probably contributed to the claim culture, but they are just using economic common sense and fighting a losing battle.

This has led us into an almost strict liability scenario i.e. it happened, therefore you are guilty and liable to pay compensation. The first thing that goes through many peoples’ minds now when they have an accident either in a car, at work or in a public place is “I can get something for this” and don’t even consider it may have been their own fault. Accidents don’t happen anymore…..negligence does.

The Government are finally attempting to address this problem which affects every one of us. Many insurance companies don’t make any profit from insurance anymore so have to increase their prices which is generally passed on to businesses, and where possible, ultimately to the consumers …….perhaps even those people making the claims.

The Government are starting the realise this is a painful and costly burden to businesses and the country and one which must be tackled. They are proposing to raise the limit where lawyers’ fees for “no-win no fee” civil claims are capped and tackle Health & Safety overkill.

Culture change doesn’t happen overnight but at least we can take some hope from the fact that the problems are finally recognised as needing action.