The Rise of the Claiming Culture
Has the UK been taken over by a new compensation culture that uses frivolous claims to squeeze money out of organisations, or is it all merely a media storm?
Have-A-Go Claimant CultureSince the legalisation in 2000 of ‘no win, no fee’ lawsuits, commercials encouraging viewers to file compensation claims against a companies have become a familiar fixture of daytime TV. The adverts follow the line of that other daytime TV favourite, the phone-in competition, and attract a similar audience - if you have slipped over at work and hurt your ankle then you might have a case, and stand a chance to earn big money prizes!
The eagerness of opportunist citizens to try and squeeze some money out of an organisation with a frivolous claim, and the willingness of high percentage-earning compensation lawyers to help them do it, has given rise to a so-called ‘bang and claim’ or ‘have-a-go’ claimant culture.
The Damaging Effects of a Claim AbuseThis rise in claim abuse has led to a situation where people are scared of being sued, where companies avoid taking risks and cease perfectly sensible activities in fear of being taken to court. Even more severely, the efforts of grasping claimants and their goading lawyers mean that genuine and serious claims are being undermined.
The rise is a side effect of the general increase in compensation claims during the first part of the decade. Whilst it’s certainly a positive sign that people are more aware of their rights and more willing to take legal action, it has also reportedly led to dramatic increases in insurance premiums and so become a major sticking point for UK industry.
So the fact this is in part can be blamed on ‘bogus claimants’ must have been particularly galling? Or is it - are these bogus claimants actually being used as scapegoats for the very real damage certain businesses cause?
Or is it all an Urban Myth?But are people right to blame the increase in insurance premiums and the new fear of legal action on a ‘claiming culture’? Or is it in reality a very minor problem whose flames have been fanned all out of control by undue media coverage?
In the statistical reality, there has actually been very little change in the total cost of compensation cases since the legalisation of ‘no win, no fee’ lawsuits. In fact the claiming culture has been complete non-starter, with two of the biggest supposed beneficiaries of the ‘boom’ -‘the Accident Group’ and ‘Claims Direct’ - having gone bust.
The rise in the cost of claims for insurers has been largely put down to the rising cost of legal fees and medical bills.
The Lesser Reported FactThis is not to say that the general public aren’t as grasping as they are made out to be, it is simply that winning a case is a tough business. Under the current system, a claimant’s lawyers must fork out for all the legal costs for both prosecution and defence if they lose. Therefore they are not going put up with the humiliation of taking a frivolous accident case into court.
The newspapers may take great pleasure in reporting stories of wastrels suing their employers for slipping on an egg sandwich in the office, but they tend to avoid reporting the fact that, in the UK at least, nearly all such cases fail miserably.