The Compensation Culture Myth
Everyone has heard of the compensation culture. Apparently, we are living in a litigious society and one regularly hears cries of ‘we are becoming like America and claiming compensation for everything’. Well, we know that this is not the real case. As I have blogged before, a claim is only viable when an individual, company or organisation has caused injury and losses through negligent actions. Any claim is made against a 3rd party insurance policy that is already in existence, in just the same way as you make a claim for damage caused to a car in a crash from the guilty party’s insurance. So why does the myth of the compensation culture exist? Who peddles this myth and what are their aims?
To get to the bottom of the reason for the creation of the compensation culture myth, we need to look at who loses out financially when a client successfully wins their legal claim for personal injury accident claim compensation. It goes without saying that the biggest loser when a claim is won, is the insurance industry. As always, insurers take the fees for the policies that they supply and accept the risks of insuring their clients, yet when it comes to paying out compensation to the genuine victims of injuries caused by negligence, they are not so quick to settle up. Sure, they should never settle a claim without fully investigating the matter and ensuring that the claim is genuine and honest. But when a claim is proven, settle it they should, and they do, albeit sometimes begrudgingly.
So, the infamous compensation culture, why peddle it? There are a whole host of reasons for this and many vested interests. Unfortunately, many people with viable claims caused by genuine negligent actions often don’t wish to pursue their rights and make a claim for personal injury compensation. That is fine and their right to do so, but it is a pretty sad state of affairs when individual legal rights are overruled by myth and pressure from massive wealthy corporations. We have often been told by clients that the reason that they don’t wish to claim is because they don’t want to be part of the compensation culture and they don’t want to be seen as getting something for nothing. Something for nothing? Why?
Again, I point out the car damage scenario. If your car was damaged, you would think nothing of making a claim for the repair work or write off settlement fee from the guilty 3rd parties insurance policy. Making a claim for personal injury compensation against an employers liability insurance policy or local authority public liability policy is no different.
In our view, the fact that people have been convinced that making a genuine claim is a dirty and cheeky thing to do suits everyone but the guilty party and their insurance partner.
Pressures on the claims industry
In 2006, the Labour Government passed the Compensation Act. We are in support of this. It introduced a regulatory authority to oversee our industry. Claims management companies must now be authorised to operate within the personal injury claims sector. This is right and proper and to be supported. However, there is a very strong lobby placing great pressure on our industry and Government from the Association of British Insurers to introduce further aggressive changes which they hope will squeeze even more companies out of the industry and prevent more people claiming compensation. It boils down to the fact that the insurance sector doesn’t like it when a claim is settled, not only do they pay the compensation to a client, but they also have to pay the client’s legal fees. What they want to do, is make it harder for solicitors to be involved in claims and get the clients to claim directly to the insurers.
Well, it is promised by the insurance sector, that any such move would lead to quicker insurance settlements and lower fees for the insurance sector to manage. They also state that claimant solicitors would not slow the process down in order to ramp up their fees.
Basically, they are claiming that solicitors are the problem. The way we see it is (unsurprisingly!) from a completely different perspective. If clients claim directly to an insurer, they MAY get their claim settled more quickly, but they may just as easily have their claimed turn down when maybe it should not have been. Surely, an independent solicitor is the best person to manage a claim. They will know if a claim is viable and genuine, how much a suitable settlement would be and what processes to follow to ensure that any settlement is made in the clients best interests.
Often, individual claimants who go directly to an insurer settle quickly, but have undergone NO medical assessment. A qualified specialist personal injury solicitor will ensure that a medical expert reviews the client’s injuries and likely recovery or otherwise and fight tooth and nail to ensure that a claim is settled in their client’s best interests. Sure, they earn fees by representing clients. But their fees are earned legally and by ensuring that they have represented their client properly. Fees are never paid by our clients as both we and our solicitors operate a genuine No Win No Fee claims service. But what is wrong with that? Don’t let yourself be fooled in to believing in the compensation culture myth. It may play into the hands of some if you do, but it won’t help you get the justice you deserve if you have a genuine personal injury claim.