"Compensation culture" is a pejorative term used to imply that, within a society, a significant number of claims for compensation for torts are unjustified, frivolous, or fraudulent, and that those who seek compensation should be criticised. It is used to describe a "where there's blame, there's a claim" culture of litigiousness in which compensation is routinely and improperly sought without being based on the application of legal principles such as duty of care, negligence, or causation. Ronald Walker QC defines it as "an ethos [which believes that] all misfortunes short of an Act of God are probably someone else's fault, and that the suffering should be relieved, or at any rate marked, by the receipt of a sum of money."
The notion of a compensation culture has also been conflated with health and safety legislation and excessively risk-averse decisions taken by corporate bodies in an apparent effort to avoid the threat of litigation.
The phrase was coined in an article by Bernard Levin in London's The Times newspaper dated 17 December 1993. The article, largely a polemic against the welfare state, carried the sub-heading: "We may laugh at ludicrous court cases in America, but the compensation culture began in Britain and is costing us dear."
The term is especially used in tabloid journalism and by advocates of tort reform to describe a perceived legal climate with regard to torts in the United Kingdom and Ireland. Lord Dyson, the second most senior judge in England and Wales, has dismissed the existence of a compensation culture in the UK as a false perception and a "media-created myth." James Hand, writing in the Journal of Law and Society, observed that sensationalist stories about compensation awards "evidently make for good copy; national newspaper articles concerning the compensation culture have increased exponentially since the mid 1990s," while statistics conversely demonstrated "a broad decline" in the number of claims during the same period.
Research published in 2006 examined the data held by the Compensation Recovery Unit, a government agency which enabled the state to recover from tort damages any social security benefits paid as a result of an accident or disease. This found "no evidence that the tort system has been flooded with an increasing number of personal injury claims in recent years" and concluded that "the number of claims [had] been relatively stable since at least 1997–1998," the first year for which statistics were available. George Monbiot, a British writer and political activist, said: "Compensation culture has usurped political correctness, welfare cheats, single mothers and New Age travellers as the right's new bogeyman-in-chief. According to the Confederation of British Industry (CBI), the Conservative Party and just about every newspaper columnist in Britain, it threatens very soon to bankrupt the country."
A Better Regulation Commission (BRC) report published in 2004 concluded that there was no compensation culture in the UK. The commission also found that the myth of the compensation culture was largely perpetuated by the media. Janet Paraskeva, then The Law Society's chief executive, commented: "Ironically, it seems that those who most decry the possibility of a compensation culture are probably responsible for perpetuating the belief that there is one – resulting in more and more of the bizarre decisions by schools and local authorities that journalists are so quick to mock." One analyst put it more bluntly: "Loose talk of a 'compensation culture' no doubt helps to sell the very sorts of newspapers that purport to despise it most."
Levin's 1993 article related the details of several personal injury claims which had succeeded in the United States, and warnings of 'American-style litigiousness' arriving in the UK were common in many articles in the domestic media during the late 1990s. This coincided with vigorous lobbying in the United States by special interest groups and business organisations in support of product liability reform which would place restrictions on laws allowing consumers to sue companies for damages caused by faulty products.
False perceptions and fear of litigation
Dr Kevin Williams, writing in the Journal of Personal Injury Law, said: "The fact that there may be no objective proof that we live in an increasingly 'blame and sue' society is beside the point when an 'urban myth' to the contrary is said to have taken hold. Thus, whatever the actual likelihood of being the target of litigation, many increasingly believe themselves to be at heightened risk of being unfairly sued." The 2004 BRC report came to the same conclusion, stating that the myth of a compensation culture in the UK was "a commonly held perception" which created an exaggerated fear of litigation and led to organisations becoming excessively risk-averse and "over cautious in their behaviour." However, research commissioned by the Health and Safety Executive (HSE) in 2008 to assess "the extent to which disproportionate health and safety management occurs" found that "most organisations do not report the examples of excessive [health and safety management] quoted in the media" but still perceived "a problem with risk aversion" in the UK in general. This, according to Sally Lloyd-Bostock, a professor of Law and Psychology, demonstrated that even the "perceptions of the effects of perceptions" were not based on evidence but instead on what Marc Galanter, professor of Law at the University of Wisconsin–Madison, dubbed "anecdotes, atrocity stories and unverified assertions" perpetuated by the media.
Common Sense, Common Safety, a 2010 report by Lord Young of Graffham to the Prime Minister reviewing "health and safety laws and the growth of the compensation culture" also found "there is no end to the constant stream of misinformation in the media" and that the "overriding opinion" of the organisations questioned (including the Confederation of British Industry, the Trades Union Congress, Families Against Corporate Killers, the Police Federation of England and Wales and the International Institute of Risk and Safety Management) was that "the health and safety agenda had been hijacked by the tabloid press, whose reports often contributed to misinterpretation and misunderstandings by regularly exaggerating and ridiculing instances which in reality have little or nothing at all to do with health and safety." The "broad consensus" of these groups was that "they did not believe there was a growing compensation culture in the UK" but that there was a "public perception of one that stifles opportunities and leads business to take an overcautious attitude when attempting to interpret health and safety regulations in the workplace."
- Liebeck v. McDonald's Restaurants
- Loaded language
- Lobbying in the United Kingdom
- Politico-media complex
- Propaganda model
- Tort reform in the United States
- Morris, A. (2007). "Spiralling or Stabilising? The Compensation Culture and Our Propensity to Claim Damages for Personal Injury". Modern Law Review 70 (3): 349–378. doi:10.1111/j.1468-2230.2007.00642.x.
- Almond, P. (2009). "The Dangers of Hanging Baskets: 'Regulatory Myths' and Media Representations of Health and Safety Regulation". Journal of Law and Society 36 (3): 352. doi:10.1111/j.1467-6478.2009.00471.x.
- Montague, Janice Elliott (12 Dec 2012). Torts (10th ed.). Abingdon: Routledge. p. 49. ISBN 9780415524612.
- Parliament: House of Commons Constitutional Affairs Committee (10 March 2006). Compensation culture: Third report of session 2005-06 2. London: The Stationery Office. p. Ev 188 ¶22. ISBN 9780215027801.
- Better Regulation Task Force (May 2004). Better Routes to Redress. London: Cabinet Office Publications & Publicity Team. ISBN 0711504571.
- Master of the Rolls (15 March 2013). "Compensation culture: Fact or fantasy?". Judiciary of England and Wales (London: Judicial Office Communications Team). Holdsworth Club Lecture.
- Walker, Ronald; Veale, Sarah (7 October 2003). "Compensation culture: myth or reality?". The Times Law Supplement (London). p. 8.
- Murphy, Joe (5 January 2012). "I'll end health and safety compensation culture says PM". London Evening Standard (London). Retrieved 29 July 2013.
- "'Compensation culture' myth examined by Leigh Day: Lord Young announces review of health and safety laws". Leigh Day (London). 5 October 2010. Retrieved 29 July 2013.
- "We are not amused... Queen’s Speech undermines UK worker safety and rights to fair compensation". Bonnar & Company. 13 May 2013. Retrieved 29 July 2013.
- Hand, J. (2010). "The Compensation Culture: Cliché or Cause for Concern?". Journal of Law and Society 37 (4): 569–591. doi:10.1111/j.1467-6478.2010.00522.x.
- Levin, Bernard (17 December 1993). "Addicted to welfare". The Times (64829) (London). p. 20.
- Hyde, John (25 March 2013). "Compensation culture is 'media-created' myth - Dyson". The Law Society Gazette (London). Retrieved 23 July 2013.
- Lewis, Richard; Morris, Annette; Oliphant, Ken (July 2006). "Tort personal injury claims statistics: Is there a compensation culture in the United Kingdom?". Torts Law Journal 14: 158–175.
- Monbiot, George (16 November 2004). "The risks of a killing: Compensation culture is a myth - ask the thousands who will die this year from asbestos". The Guardian (London). p. 25.
- Paraskeva, Janet (18 November 2004). "Exploding the myth". The Law Society Gazette (London). Retrieved 23 July 2013.
- Williams, Kevin (2005). "State of fear: Britain's "compensation culture" reviewed". The Journal of The Society of Legal Scholars 25 (3): 499–515.
- Rankin, Robert A. (3 May 1996). "Product-liability Limit Draws A Veto; Dole Points To Clout Of Trial Lawyers". The Philadelphia Inquirer (Philadelphia). Retrieved 24 July 2013.
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- Hipschman, David (4 May 1995). "Product Liability Reform: Boondoggle or Boon?". The Christian Science Monitor (Boston). p. 19.
- Williams, K. (2006). "Politics, the media and refining the notion of fault: section 1 of the Compensation Act 2006". Journal of Personal Injury Law: 347–354.
- Wright, Michael; Beardwell, Catherine; Pennie, David; Smith, Rachel; Doyle, John Norton; Dimopoulos, Evangelos (June 2008). Evidence based evaluation of the scale of disproportionate decisions on risk assessment management. London: Health and Safety Executive.
- Lloyd-Bostock, Sally (August 2010). Hutter, Bridget M., ed. Anticipating Risks and Organising Risk Regulation. Cambridge: Cambridge University Press. p. 94. ISBN 9780521193092.
- Galanter, Marc (1996). "Real World Torts: an Antidote to Anecdote". Maryland Law Review 55: 1093.
- Lord Young of Graffham (October 2010). Common Sense, Common Safety. London: Cabinet Office. Retrieved 26 July 2013.