This essay is taken from a recent university course where I studied the fundamentals of Industrial Law.
This essay discusses how the tort of negligence encourages a ‘compensation culture’ by first summarising the tort of negligence. Secondly, the ‘compensation culture’ is defined, it is then placed to discuss how this is encouraged; and finally it is debated whether the UK has a ‘compensation culture’.
Summary of Tort of negligence
Negligence claims rely on the following common law principles; that the defendant owes a duty of care to the claimant, that this duty of care has been breached by the defendant and that this has resulted in a loss or injury to the claimant. These have been established through a series of cases in the 20th Century.
The tort of negligence was established with the landmark case of Donoghue v Stevenson [1] where a woman fell ill from consuming a drink in a café after finding a snail in the bottle. At that point in time, there was no avenue for litigation as there was no contractual relationship between Donoghue (the woman) and Stevenson (the manufacturer). The only contractual relationship was between Donoghue’s friend, who purchased the drink, and the owner of the café. Famously, LJ Atkin quoted the Bible’s principle of “loving your neighbour” as reasoning for Stevenson’s duty of care to all eventual consumers of his products. This introduced the principle whereby one person owes another person a duty of care. The House of Lords also considered the case of MacPherson v Buick Motor Co [2], from the United States; however both of these cases would now fall under product liability rather than tort in negligence.
Further to the duty of care, Nettleship v Weston [3] formalised the principle of ‘breach of duty’, whereby one should expect a duty of care at a level of a reasonable person. In this case, this meant that even a learner driver should be expected to drive with a standard of care of a reasonable person despite their relative inexperience.
A tortfeasor may still be found liable for negligent damage even if the claimant has a pre-disposition that made the damage worse than otherwise would have been expected. In Smith v Leech Brain & Co [4] it was found that a burn to Smith’s lip occurred in the course of his work; where he is required to lift articles in to a tank of molten metal with the aid of a crane. The burn was a catalyst to a pre-existing cancer that, 3 years later, led to Smith’s death; and as was decided in the Wagon Mound case [5]: “the tortfeasor takes his victim as he finds him”.
The Wagon Mound case [5] also brought about the principle of ‘remoteness’; where the defendant cannot be found liable if a reasonable man could not foresee the damage. In this case, oil had spilled in the harbour and was set alight by a spark from welders. The resulting fire caused a considerable amount of damage. It was decided that this damage was unforeseeable to the reasonable man and therefore the compensation could be limited to the damage that was foreseeable.
Definition of ‘compensation culture’
A ‘compensation culture’ can be defined as a culture where people are quick to use litigation to resolve minor incidents with the hope of gaining compensation. This is often extended to include incidents that have tenuous links between the claimant and defendant. These cases can be described as frivolous or unfounded, where they have little chance of succeeding, and are therefore ‘opportunistic’. As the Better Regulation Task Force [6] said:
“The term compensation culture is not used to describe a society where people are able to seek compensation. Rather a compensation culture implies that a decision to seek compensation is wrong.”
A ‘compensation culture’ has been found to be damaging due to the increased requirement for insurance, and the increased cost of insurance [7]. This has been seen to prevent some potentially hazardous activities from taking place, such as school trips; as these would require large insurance costs that are unaffordable. A ‘compensation culture’ is also seen to brood a rather undesired greed economy as stated by David Fisher [8]:
“While there may not be a compensation culture, there is a “vulture culture” in respect of legal fees. Figures from the Association of British Insurers (ABI) show that across motoring and liability, for every £1 spent on injury claims, 43p is spent in legal costs.”
This greed can be extended to insurers and the general public who think of compensatory claims as a way to make easy money. A ‘compensation culture’ has also been equated with a ‘blame culture’ [9] and raised concerns over decreasing personal responsibility.
Discussion on how tort of negligence encourages a ‘compensation culture’
A ‘compensation culture’ could not exist without the tort of negligence, as this is the route for compensatory litigation for negligent acts. The potential outcome of large damages encourages prospective plaintiffs to find a negligent act as a cause of their misfortune. However, there are many legitimate and deserving cases for negligence, especially in the realms of clinical negligence. Recent examples include Fallon v Wilson [10] where the defendant doctor neglected to notice the symptoms that should have resulted in a referral to hospital and led to the premature baby’s brain damage. Similarly, in Kirby v Ashford and St Peter’s Hospital [11] the defendant had spastic quadriplegia as a result of negligence at the time of his birth. Further cases demonstrating the value of tort of negligence have been seen in the claims of those suffering after the deaths of loved ones at war in Iraq and Afghanistan, for example Regina (Smith) v Oxfordshire Assistant Deputy Coroner [12]. In this case Smith died from hyperthermia sustained whilst carrying out his duties in Iraq, when he should have been equipped to the conditions that he would have to endure.
Along with deserving cases for negligence, there are those that encourage the concept of a ‘compensation culture’, that meet my earlier definition as frivolous, unfounded and opportunistic. One plaintiff, that was a popular subject for the media, was Michael Sams; who three times attempted litigation whilst he was held in jail, succeeding once in gaining compensation after the prison authorities lost his artificial limb. However, he failed in his attempt to sue for his prison bed being ‘too hard’ [13].
Tomlinson v Congleton BC [14] was considered a key case in determining the boundary of frivolous litigation. Tomlinson had dived in to a lake that was on Congleton Borough Council property, where swimming was prohibited. Tomlinson argued that the council had not taken enough steps to prevent his injury, and that the notices prohibiting swimming were ineffectual as they had been ignored by others in the past. However it was shown that he had made the decision to dive whilst fully aware of the dangers of doing so, and therefore could not attribute the blame to the council. The Telegraph [15] described the case as “a landmark ruling which decrees that individuals must take responsibility for their own actions”.
Role of judiciary in limiting liability to prevent a ‘compensation culture’
The judiciary are very aware of the reputation of a ‘compensation culture’ and are keen to avoid this situation, so when considering cases of negligence they act to limit the scope of ‘floodgates’ liability. One such case where this would have been considered was Gorringe v Calderdale MBC [16], where Gorringe was injured after crashing in to a bus on a sharp crest in the road. Gorringe argued that the highway authority should warn drivers of the potential dangers on this section of road, and were negligent in not doing so. However, the court decided that Gorringe should have been driving with proper care, and could not blame the council’s lack of warning notices.
An earlier case that demonstrated the potential concerns of a ‘compensation culture’ was that of Miller v Jackson [17] where Miller attempted to prevent cricket from being played at the village cricket club, as occasionally cricket balls had entered Miller’s garden. Initially Miller was successful, but the injunction was overturned on appeal, and instead Miller was offered £400 compensation for any previous or future damage that might occur due to cricket balls entering Miller’s garden.
Tomlinson [14] and Gorringe [16] encouraged legislative action with the Compensation Act 2006, and when introducing the bill Catherine Fairbairn described its desired actions as follows [18]:
“to prevent a compensation culture from developing, to tackle perceptions that could lead to a disproportionate fear of litigation and to risk-averse behaviour, to discourage and resist bad claims and to improve the system for those with a valid claim for compensation.”
However, the Compensation Act has been criticised [19] for attempting to tackle an urban myth, which has been perpetuated by media reports. This leads me to discuss whether the UK has a ‘compensation culture’.
Discussion on whether a ‘compensation culture’ exists in the UK
Some attempts have been made to quantify whether the UK suffers from a ‘compensation culture’. Lewis et al [20] looked to trends in numbers of claims being made for personal injuries and saw no significant change between 1997 and 2006. However, Williams [21] states that we may have the opposite of a ‘compensation culture’:
“It may be that too many wrongful harms in some areas go uncompensated or that compensation levels are low, comparatively speaking.”
This agrees with the Better Regulation Task Force [6] where the United Kingdom has the second lowest figures for compensation when compared relative to GDP. Williams also argues that “legitimate, well-founded claims” should not be considered as part of the problem; as these are examples of justice being served.
There is some agreement that the perception of a ‘compensation culture’ is founded in media reporting and television advertising for claims management companies [7,19,22]. Lord Young suggests that restrictions should be placed on how claims management companies can advertise their services, as this drives a fear of litigation.
Despite this evidence that a ‘compensation culture’ does not seem to affect the UK, it is clear that public perception thinks otherwise [23]; and this means that insurers and the public have to deal with some of the outcomes of this. This will lead to scare stories [24,25] and further perpetuate the myth of the ‘compensation culture’.
Conclusion
In conclusion, it is clear that the principles of tort of negligence would encourage a ‘compensation culture’ if they were kept unchecked. However the actions of the judiciary and the government will look to prevent this from occurring, and have so far been successful in their attempts.
[1] Donoghue v Stevenson (1932) UKHL 100
[2] MacPherson v Buick Motor Co (1913) 111 N.E. 1050, 217 N.Y. 382
[3] Nettleship v Weston (1971) 2 Q.B. 691
[4] Smith v Leech Brain & Co (1962) 2 Q.B. 405
[5] “Wagon Mound” – Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (1961) A.C. 388
[6] “Better Regulation Task Force: Better Routes to Redress” (2004) available from http://www.claimscouncil.org/system/files/4/original/BRTF_-_Better_Routes_to_Redress.pdf
[7] Lord Young (2010) “Common Sense, Common Safety” Report on health and safety laws and the growth of the compensation culture, p19-23
[8] David Fisher (2008) “The future of personal injury: an insurer’s perspective” Journal of Personal Injury Law 2008, 2, 164-175
[9] Richard Mullender (2006) “Negligence law and a blame culture: a critical response to a possible problem” Professional Negligence 2006, 22(1), 2-31
[10] Fallon v Wilson (2010) EWHC 2978 (QB)
[11] Kirby v Ashford and St Peter’s Hospital (2008) EWHC 1320 (QB)
[12] Regina (Smith) v Oxfordshire Assistant Deputy Coroner (2010) UKSC 29, 3 W.L.R. 223
[13] Robert Verkaik (2000) “Killers get their own court to sue prison” The Independent 26th March 2000
[14] Tomlinson v Congleton BC (2003) UKHL 47, 3 W.L.R. 705
[15] Charlotte Edwardes (2003) “End this compensation nightmare, say judges” The Telegraph 3rd August 2003
[16] Gorringe v Calderdale MBC (2004) UKHL 15, 1 W.L.R. 1057
[17] Miller v Jackson (1977) QB 966
[18] Compensation Bill – Research Paper 06/28 (2006) available from http://www.parliament.uk/documents/commons/lib/research/rp2006/rp06-028.pdf
[19] Kevin Williams (2006) “Politics, the media and refining the notion of fault: section 1 of the Compensation Act 2006” Journal of Personal Injury Law 2006, 4, 347-353
[20] Richard Lewis et al (2006) “Tort personal injury claims statistics: is there a compensation culture in the United Kingdom?” Journal of Personal Injury Law 2006, 2, 87-103
[21] Kevin Williams (2005) “State of Fear: Britain’s ‘compensation culture’ reviewed.” Legal Studies 2005, 25(3), 499-514
[22] Lee McIlwaine (2004) “Tort reform and the ‘compensation culture’” Journal of Personal Injury Law 2004, 4, 239-249
[23] Julian Lowe (2002) “The cost of compensation culture: Working party report” Institute of Actuaries
[24] “Clearing ice? You’ll get sued” The Sun 10th January 2010
[25] “Fattest man is suing the NHS for ‘letting me grow’” The Sun 7th January 2011