Hard knocks

It has become a commonly held misconception over the last ten years that the UK is in the grip of a 'compensation culture'. It is a perception stimulated by the press in familiar headlines such as 'Health and safety chiefs ban candy floss sticks' and 'Health and safety risks stop children playing pin the tail on the donkey', where, in reality, the Health and Safety Executive (HSE) has banned very little outright.

Despite the lack of actual evidence to support the existence of a compensation culture, the personal injury litigation system is attracting renewed attention with the report of Lord Young of Graffham into the operation of health and safety laws. His report will be the third event to shake up the area this year after the Jackson report into civil litigation costs in January, and the streamlining of the compensation system for low-cost road traffic accidents (RTA) claims in April.

However, unlike Jackson LJ's report, which followed a 12-month consultation period, Lord Young underwent a relatively short consultation period spanning only a few months, and was clear before the consultation about what he was likely to recommend '“ something which has led commentators to express concern about his approach to the review.

It was hoped that Lord Young's report would dispel the myth of the so-called compensation culture and calm the media-led hysteria, which has undermined objective attempts to rebut with proper statistic analysis what is essentially a lack of understanding of the difference between an accident and negligence. To understand the true position, one has to go behind the headlines to the statistical evidence and the case law.

The Compensation Recovery Unit statistics show the number of reported cases has declined from 2000 to 2010 in almost all categories except motor claims. The Association of Personal Injury Lawyers (APIL) believes this anomaly may be due to 'third-party capture', whereby defendant insurance companies approach prospective claimants directly to settle any potential dispute before the claimant has considered seeking redress.

The current provisions of the common law and the common sense of the judiciary have also so far ensured desirable activities and good faith activities are already fully protected by the law.

Statute governing health and safety is found in what practitioners refer to as the HSE's 'six pack' regulations, which consist of six of the most widely quoted health and safety regulations.

When determining the reasonableness of the defendant's actions the court had departed from the usual three-stage test under Caparo v Dickman [1990] 2 AC 605 to earlier authority; for example Denning LJ's judgment in the Court of Appeal decision of Watt v Hertfordshire County Council [1954] 1 WLR 835, where he said: 'One must balance the risk against the end to be achieved. The saving of life or limb justifies taking considerable risk.' Thus the authority goes not to the issue of duty, but to the issue of breach.

It is clear that the courts are conscious of and already manage the balance between a reasonable risk and the social utility of an action. So, the suggestion that the law somehow prevents people, like those in the emergency services, from taking risks to save people in need out of fear of litigation, is a just a myth exacerbated by the media.

Beyond the headlines

That the existence of a compensation culture is a myth perpetuated by the media is also the conclusion drawn by The Better Regulation Task Force in its report Better Routes to Redress. I also believe, as argued by APIL in its response to Lord Young's consultation, what is needed instead is increased public awareness of the difference between an accident and negligence and that no one will win a case against someone who they may think is responsible for an injury if that injury has been caused as a result of an accident.

It is right to periodically review whether we are, as a society, becoming over regulated with health and safety rules. But it is important for the government, when conducting this review, to give proper examples from actual statistics or cases where the courts have, for example, ruled in favour of a claimant seeking redress from an injury sustained during a game of conkers. This is necessary so that we can establish where we are and where we need to go based on actual evidence, without all the rhetoric.

If you go behind the headline-grabbing words used in some of the recommendations set out in the box on the right, and look at the research, you will see, for example, the concern over the number of school trips declining because of fear of litigation is highly exaggerated. The evidence in support of this comes from research conducted by the Countryside Alliance Foundation (TCAF) in October 2009, which published statistics demonstrating clearly that, of the millions of individual school trips taken over the past ten years, only 264 ended in legal action and in only 156 of those cases were schools found to be culpable. Further, between 1998 and 2008, the total amount of compensation paid, on average, by local authorities in relation to school trips was just £293.44 a year.

The recommendation that small shops, offices and other 'low-risk' workplaces should no longer face complex paperwork to meet risk assessment and other health and safety criteria is a poor basis for exclusion. It does not follow that, the smaller the business, the better the health and safety record. Equally it cannot be right that a bad employer who neglects the welfare of their employees gets a competitive advantage over good employers who do ensure safety at work. So, while it is right to encourage the start and growth of small businesses, they must be responsible and accountable and all employers should have the same responsibilities.

The recommendations made by Lord Young in his final report also need to be clearly worded if they are to hit the right target. From the preview of the likely recommendations above, it is surprising '“ if not a major concern '“ that the wording used is vague, open to broad interpretation and does not provide any more useful a definition or protection than we have at present.

Lord Young's acknowledgement of the need to address the role of referral agencies is, however, to be welcomed and the proposals made by APIL in its response to the consultation, set out further on the right, should be used as a template on which to base this review.

Finally, the recommendation to prevent lawyers recovering a success fee from the defendants again has not, in my opinion, been duly considered and will just shift liability from the insurer to the injured people, which, although may partly be resolved through competition between firms, can not overall be reconciled with the importance of the right of access to justice for all. This is especially pertinent in those cases where the risk of losing the case is high and recovering a success fee from the claimant is not an option, thus making the case not viable and leaving the claimant without redress. It could in turn lead to deterioration in the number of new cases firms receive and without a steady flow of new cases some departments or even firms may have to consider the financial viability of doing this important work.

Dispelling the myth

We must ensure that the issues of banning toothpicks in restaurants and people from knitting on aeroplanes are not mixed up with a very different issue '“ that of employer'sliability cases.

If implemented as they are, Lord Young's proposals risk increasing the number of accidents through reduced health and safety regulation while at the same time making it virtually impossible for an injured person to obtain proper redress.

It is not acceptable to put workers lives at risk simply to deal with a false perception about the law on the issue of taking risks. Rather than reducing the levels of protection health and safety law provides, the government should focus on educating the public to reassure them and explain how the law protects people, and the difference between an accident and a legal claim. APIL is already trying to tackle this problem by developing factsheets and working with consumer advisory groups as well as running a number of consumer initiatives, but leadership from senior political figures is also needed to dispel the compensationculture myth.