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To what extent is there now a so-called 'compensation culture' in negligence claims in the UK and if so, how are the courts reacting to this phenomenon?

Tort is about transferring the loss from the victim to the defendant. Torts play the main role in regulating the conduct of people in society. The defendant should pay compensation to the victim. Nowadays it is not the defendant who should pay the compensation, their employee’s insurance that has to pay it instead of them. The main question now when the compensation start to increase is whether the victim deserve compensation or not. This had made it easier to expand the area of liabilities which leads to so-called “Compensation Culture”. Compensation Culture is a term used to have a necessary consequences, within the society. A huge numbers of claims for compensation for tort are being forward to the court to seek compensation. A person should claim for compensation for an injury whether it was caused by fault, a pure accident, or by the victim himself. In 2003, The Law Society and the Federation of Small Business took action from the Lord Chancellor to cut the growth of “ambulance chasers” who were blamed for increasing insurance liability, by encouraging employers to sue for accidents in the working place under “no win no fee” arrangements. They called someone to maintain these companies. The tort system has been seen now not as efficient as it could be, for example, the social security system. The Pearson Commission in 1978 showed that the system is really expensive shown by the figures that the student had. There is another problem which is the delays in the claimant receiving compensation.1

UK citizens “considered themselves culturally allergic to litigation”.2 This means they do less litigating than other countries such as Germany and the USA, but they still do it increasingly often. The Better Regulation Task Force by Better routes to Redress in 2004, funded by the Government concluded that “there was no compensation culture but the perception that there was caused a fear of litigation”.3 “no win no fees” agreement has encouraged many claims to come out where before only the people who can fund the claims used to bring their case to the court. In The Report of an Enquiry into the Compensation Bill and the Compensation Culture (2005), all parties of MPs told the Law society to control over solicitors who are linked with the claim farmer. Then they introduced an Act in 2006, which clearly stated that when considering claims in negligence, the court can consider the wider social value of which the injury of damage being claimed. Courts mostly accept personal injury claims. Summers v Fairclough Homes (2012), it is a case of exaggerated injury. A claimant demanding £800,000 was caught on camera. “The UKSC said such claimants could expect imprisonment for contempt and for crime”.4

1 Richard Kidner, Casebook on Tort (12th edn. Oxford)2 Penny Darbyshire, Darbyshire on the English Legal System (10th edn, Sweet & Max-well 2011)3 Penny Darbyshire, Darbyshire on the English Legal System (10th edn, Sweet & Max-well 2011)4 Penny Darbyshire, Darbyshire on the English Legal System (10th edn, Sweet & Max-well 2011)

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As a result of the Compensation Culture, the Compensation Act 2006 introduced, in addition to section 1,5 deals with the claims and damages actions. It consider the impact of a decision on negligence. It might affect certain organisations or individuals of certain type of activities. The following cases will discuss the “Compensation for loss of earning for those injured in accidents may come from occupational sick pay schemes or state benefits”6, and how the judges and the courts dealt with such a cases. In Cole v Davies Gilbert (2007), this case showed how the court applied the Compensation Act 2006 when it got established. Cole was walking to go to the pub, when she stepped on a hole which was hidden in the long grass and broke her ankle. Cole brought an occupation liability action against the owner of the green and the Royal Legion. The trial judge found that the owner of the green and the Royal Legion were liable in 2005; however the court of appeal were against the trial judge’s judgment. As Scott Baker LJ said: accidents always happens and we cannot always consider them as “proper accidents” the victim cannot recover any damage because the fault is not the owner and the Royal Legion fault however, it is just an accident. Who also said “there would be no fetes, no maypole dancing and no activities that have come to be part of the English village green”.

There are other judicial reactions against the “compensation culture”, in cases of Bourn Leisure v Marsden (2009), two and half years old boy fell into a bond as a result of this he died. The court held that this was a tragic accident, the court said that the occupier was not liable and the parents not negligent. Another case was Tomlinson v Congleton BC (2004). There are other cases were Compensation Act 2006 was not cited in the judgment. We can see that in case of Harris v Perry (2008), which Court of Appeal revised, a decision was made regarding standard of care which was expected from the parents supervising their children on a bouncy castle at a birthday party. The standard of care was of reasonable carful parents. The risk was “less than serious” injury. This duty did not required constantly supervising children while playing.7

In Anns v Merton LBC (1978), Lord Wilberforce extracted from the case the Anns test, it is two stage test for imposing a duty of care “1. There must be a sufficient relationship of proximity between the wrongdoer and the person who has suffered damage. 2. It is necessary to consider whether there are any ‘policy’ considered, which ought to limit the scope of duty. This has since been overruled by Caparo v Dickman”8. In Caparo plc v Dickman (1990) case, Caparo plc purchased shares in fidelity Plc, which state that the company had made a pre-tax profit of £1.3 million. Caparo brought an action against (Dickman) the auditors, claiming they were negligent in certifying the accounts. The court held that there was no duty of care was owed. There are three stages of Caparo test were brought from this case, there must be “1. Foreseeability of harm, 2. A relationship of proximity, 3. It must be fair, just and reasonable to impose liability”.9

In case of Fairchild v Glenhaven (2002), the court held that if the claimant could

5 A court consider a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care, have regard to whether a requirement to take those steps might a) prevent a desirable activities from being undertaken at all, to a particular extent or in a particular way, or b) discourage persons from undertaking functions in connection with a desirable activities.6 Vera Bermingham, Carol Brennan, Tort Law (4th edn, Oxford)7 Vera Bermingham, Carol Brennan, Tort Law (4th edn, Oxford)8 Anns test 9 Caparo test

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prove that one employer had increased the risk of contracting mesothelioma then they have the right to claim for full compensation from that one employer. The court needs to consider these two tests as for the duty of care, when dealing with Compensation Culture as it really important when cases applying Compensation Culture needs to consider the duty of care that each party had.

The court reacted differently to “Compensation Culture” phenomenon. As it shows in the telegraph online newspaper reported under the headline of “Judge refuse’s whiplash damages as he criticises Britain's 'compensation culture'”. As it said on the newspaper, that The Higher Court judge dismissed claims of two woman’s for whiplash as lies as the judge said; “Britain's compensation culture, which costs billions every year, is getting out of control”. This clearly shows that The Higher Court judges are unhappy with the compensation culture phenomenon. Which as he explained it costs billions every year and he added it is getting out of control, as many people claiming for it even if meant to lies and give wrong evidence evidence like these two women, who did not take the Compensation from the Higher Court.

Bibliography

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Cases: Bourn Leisure v Marsden (2009)Caparo plc v Dickman (1990)Cole v Davies Gilbert (2007)Fairchild v Glenhaven (2002)Harris v Perry (2008)Summers v Fairclough Homes (2012)Tomlinson v Congleton BC (2004).

Articles:The Compensation Bill and the Compensation Culture (2005)

Acts:Compensation Act 2006

Books:Darbyshire P, Darbyshire on the English Legal System (10th edn, Sweet & Maxwell 2011)Kidner R, Casebook on Tort (12th edn. Oxford)Bermingham V, Brennan C, Tort Law (4th edn, Oxford)

Journal Articles:The Telegraph online Newspaper Wednesday 21 January 2015.