Fact or fiction? Debunking personal injury myths

John Spencer sets the record straight on the notion that 'compensation culture' is rampant within this part of the profession

The term 'compensation culture' is one that has increasingly and unjustly crept into the British vocabulary, referred to by journalists and politicians alike.

However, if we examine the facts, I would argue against not only the principle of damning those who seek compensation, but also the existence of any evidence to support this 'rise' in a culture of claiming. In such an argument I find myself in good company, with the Master of the Rolls, Lord Dyson, Lord Young, and the government's Better Regulation Task Force, all concluding that 'compensation culture' is in fact a rampant myth.

Examining the facts

The government's Compensation Recovery Unit (CRU) collects comprehensive statistics for all personal injury claims and provides detailed evidence on just how the claims add up. Looking at the number of personal injury claims overall, there has been a 3 per cent reduction since 2011 - with claims falling from 1.041 million to 1.016 million for this year.

There has been an increase in some areas, including:

• claims for clinical negligence (up 16 per cent),

• employer liability ( up 16 per cent),

• and public liability (up 1 per cent), yet this has been offset by a much larger fall in other areas.

One such area is motor or road traffic accident (RTA) claims - an area often sensationalised - which have fallen by 7 per cent since this time three years ago, from 828,000 to 773,000. Within RTA, the most demonised injury type is often whiplash, yet this category has fallen by nearly a third in the past four years.

Estimating fraud

By its nature, fraud is difficult to identify. The only figures available are nebulous and unsubstantiated insurance industry produced figures, such as the Association of British Insurers (ABI), report that 'undetected general insurance claims fraud totals £2.1bn a year'.

Yet this is a speculative figure generated via interviews with insurers, and cannot be taken as fact - despite being presented as a ground-breaking revelation. The annual cost of 'crash for cash' fraud, for example, is estimated by the ABI at £392m, yet critically this figure is not based on any hard evidence and only reports the potential annual costs based on an estimation of suspected schemes that remain undiscovered.

One can see, therefore, that there is a lack of clarity with regards to the actual level of fraud in the system, prompted by speculative and misleading figures. The Transport Select Committee even went as far as to recognise questionable insurance figures in its recent report 'Driving premiums down: fraud and the cost of motor insurance'. They recommended that the government needs to ensure 'there exists better data about fraudulent or exaggerated PI claims, so that there is a stronger evidence base for policy decisions' and that 'since the government has added the ABI's figures for dishonest claims in 2013, it should explain how the figures have been arrived at and how dishonest claims have been defined.'

The pursuit of justice

The biggest danger of placing weight on the existence of a so-called 'compensation culture' is the potential damage that this can do in driving away genuine claimants. There is already a 25 per cent cap on success fees that can be charged against general damages and damages for past loss. This has the impact of making complex cases, particularly for vulnerable groups like children, commercially unviable. Similarly, the slashing of claimant lawyers' fees by 60 per cent has procured the same effect. These two facts alone have had a real impact on access to justice and mean those who need retribution the most are the first to be excluded.

The phrasing 'compensation culture' is unquestionably a direct attack on the integrity of those seeking compensation, with little to no consideration of the people that lie behind the claim. Instead of generically damning these people, we need to ensure better outcomes and rehabilitation, better care for patients, and rights in the workplace restored and improved. The Association of Personal Injury Lawyers (APIL) is committed to ensuring that the injured person remains central to all our activity, but this is hindered by repeated reference to a fabricated 'culture' that, as we have seen above, has simply no basis in fact. In giving any form of credence to this theory, the only people who gain are those who act with such negligence that innocent people suffer. SJ

John Spencer is chair at Spencers Solicitors and president of APIL