Wednesday, 22 February 2012

Compensation Culture Kills

In my last post, I wrote about some possible changes in the UK insurance industry. The post was prompted by the news that the prime minister was meeting with representatives of the insurance industry to discuss rising policy prices.

One of the things to have come out of this meeting is that the insurance industry is becoming more weary, perhaps fearful of the rising compensation culture in the UK.

For once, it seems that the insurance industry and I can find some common ground.

For many years now I have been aware of the compensation culture that is beginning to hold a grip on western society, particularly the population of North America.

The majority of these claims are to do with small road accidents, those where two cars have collided at a speed under 30 miles an hour. As is the design of the seat belt fitted in most modern cars, even the smallest bump can lead to mild discomfort in the neck. In times gone by, these little niggles would be shrugged off, but compensation culture and the ambulance chasing lawyers that fuel this particular economy will instantly see a claim for whiplash, a claim worth upwards of £1000 to the claimant and far more for the successful legal firm.
It is the cost of these sorts of trials, perpetuated regardless of any real claim of negligence, that is driving up the cost of insurance. Government money, or more to the point, tax payers money, is also taken out of the system by the use of legal aid.

Another cost of this sort of case is that a court of law that would usually be working hard to rid the streets of "real" criminals are swamped with these trials, and the strain on the system means that said "real" criminals are still on the streets. How many times have we heard of a criminal committing a crime while awaiting sentence for an earlier offence!

Another cost of this culture which goes almost unnoticed by the majority is the cost on orgnisations such as the NHS. In the financial year of 2010-2011 the National Health Service handed over more than £1.8billion in compensation claims to the British public. While some of these claims may have been genuine, my cynical mind has me believe that many, if not a majority, will have been false or elevated claims.

In one particular case, a man was granted more than a million pounds because his doctor had prescribed a drug not knowing that the defendant was allergic to the main ingredient. The man had clearly suffered injury, but as much as was initially claimed, we will never know. This, like so many other claims never had its day in court, and was settled prior to defence lawyers being involved. On the one hand, it does reduce the cost to the NHS if a legal battle had resulted in them losing. But on the other hand, giving money blindly without putting up a defence will surely pave the way for other, in some cases less worthy claims to be presented in the hope of an early settlement. And while this continues, the cost to the National Health Service will only increase.

I wonder what the human cost, through lost beds and closed or understaffed hospitals is, and how much better spent that £1.8billion could be.

1 comment:

  1. Yes, I think people are too quick to sue doctors and perhaps get too much money. We shouldn't really expect doctors to be perfect. They are only human. I also agree, the 1.8 billion could have helped many thousands of people.


Please leave a comment!