November 17, 2004

Guardian: Compensation Culture Does Not Exist

Writing about web page,,1352227,00.html

Pretty interesting, and I think useful article from the Guardian, a few days ago, in its comments and opinions section.

I recommend anyone go take a look.

For those that can't be bothered, key points:

1. Evidence for the lack of a real, harmful compensation culture:

Despite the legalisation in 2000 of "no win, no fee" lawsuits, the total cost of compensation cases in Britain has remained, in real terms, static since 1989. The two biggest claims-marketing companies – the great beneficiaries of compensation culture – have both gone bust. Last year the number of accident claims fell by 9.5%. The government's Better Regulation Task Force, which at other times has taken the part of big business, bluntly reports that "the compensation culture is a myth".

2. Monbiot claims that the idea behind such things crippling innocent companies is invalid. Spurious claims almost never succeed, and so the legal companies willing to take up no-win-no-fee claims always end up shouldering any legal fees themselves. And so THEY go bust, not the companies. "It is no easier to win a case under the "no win, no fee" system than it was to win a case brought with the help of legal aid."

3. Notice the people behind the myth of the compensation culture. They are the ones with the most to gain, because they use the idea of the culture as an excuse to avoid litigation from their own victims. (Examples given are asbestos merchants in the US.) These companies deploy a different idea of a risk taking society:

"Sunderland is calling for precisely the "reduction in personal responsibility" he affects to despise. The entrepreneur shall not be held responsible for any of the risks he dumps on other people…. In opposing our mythical compensation culture, Sunderland and Letwin are creating something much uglier: a risk culture. They are glorifying the risks that the powerful impose on the weak. "

4. "Of course there is another way, and that is to stop big business exposing people to risk in the first place. But the state enforcement of health and safety laws is in the interests of neither businessmen nor lawyers; the money won't vote for it. Without regulation, compensation is often the only protection we have. "

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