Home News The Blame Game: Dealing with the UK’s growing compensation culture

The Blame Game: Dealing with the UK’s growing compensation culture

by Brian Sims

In recent years, so-called ‘compensation culture’ has become a part of the risk landscape for UK businesses and organisations. Genuine claims against businesses and organisation by staff and contractors do arise, and deserve to be correctly settled. However, an increasing number of false or exaggerated claims do affect a number of employers. Risk UK” with the help of Jonathan Chadwick, head of commercial law at national law firm Stephensons” considers the scale of the problem. Everyone will be familiar with advertisements on television, radio, the internet and other media encouraging the making of personal injury claims. An industry has grown up – in the last decade or so – around Claims Management companies that make a living by obtaining the details of accident victims and selling them onto solicitors for referral fees. This industry has subsequently created a phenomenon often described as the ‘compensation culture’, which is a term that is often associated with, and will be more familiar to, many on the other side of the Atlantic. One result of such promotional activities by the Claims Management companies has been an increased perception that it is very easy to make a claim and this, coupled with pressure on individuals to pursue any and every possible incident, has made litigation seem a profitable avenue to follow. Given the current difficult economic climate, this approach appears to be contributing to fraud against insurers and the businesses that they insure. A rising tide? Claims against businesses can come not only from customers” which is outside of the scope of this article – but also very often from employees, contractors and other business-related site visitors. Pursued litigation can be varied, but predominantly includes Employment Tribunals and accident claims. While the majority of claims are genuine, there are clearly a number which are fraudulent. The ABI” Association of British Insurers – estimates that detected insurance fraud rose by 9 per cent in 2010, totalling

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