April 24, 2018

Do we have a growing ‘compensation culture’ in this country? Government figures suggest we don’t

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The so-called rise in claims made by individuals is being blamed for the rise in insurance premiums, particularly motor insurance.

When we think compensation culture we tend to think of the US, where individuals are constantly in fear of being sued. This is a country where doctors are afraid of writing notes for their patients in case they are later sued for the advice they have given.

So far the courts in this country have prevented a runaway claims culture like the one you might find in the US. However, the general perception is that we live in a compensation culture. Is this really the case though?

The Compensation Recovery Unit figures

The Compensation Recovery Unit, which recovers social security benefits and NHS costs in compensation and injury cases, has updated its figures on claims this week and they make interesting reading.

The figures suggest that there has been an overall drop of 125,000 in claims registered in 2017/18 when compared with 2016/17. Total claim numbers (including motor claims) are down approximately 20% since 2013, and there has been a significant decrease in the number of claims registered in most sectors including clinical negligence, employer liability claims and motor claims.

The only area where there has been a slight increase in claims registered is that of public liability, which may be due to the recent increase in holiday illness claims made. The overall figure is, however, still lower and this cannot be ignored.

So, why do we keep hearing about our ‘compensation culture’?

Insurance companies have for some time blamed spiralling claims for premium increases and the public perception is that this is becoming a real problem for the country.

However, as things stand, the number of claims being made seems to be decreasing.

On the other hand, insurance premiums continue to rise, motor insurance especially; all the while the number of motor claims has dropped 17% since 2010/11.

Sadly, the media, government and public as a whole continue to blame the so-called ‘compensation culture’ for the rises. But how can this be the case when the figures show otherwise?

If the current trend continues, with claim numbers decreasing and premiums continuing to rise, then surely the general perception must change?

It is likely to take some time for the general perception of compensation culture to be altered but, hopefully, over time the figures will speak for themselves.

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