Produced jointly by the Association of Personal Injury Lawyers and the Trades Union
Personal injury compensation is the subject of much myth and misunderstanding. APIL
fights negative perceptions when possible, and actively tries to educate the public
about the difference between a simple accident, which can never result in a successful
claim, and negligence which causes injuries which could have been avoided.
The Compensation Myth is a joint document with the TUC, aimed at setting the record
straight on seven common misunderstandings about the compensation system.
The Compensation Myth
It is common to hear stories of the “compensation culture” or claims that Britain
is becoming “risk averse” as a result of people claiming compensation.
In May 2013 the Justice Secretary, Chris Grayling said that recent changes to the
way claims are dealt with “will not be the end of the Government's work to tackle
the growth of compensation culture”1. The DWP website also claims “a
damaging compensation culture is stifling innovation and growth.”2
The truth is very different. In fact there is no compensation culture. Even people
asked to look at it by the Government have concluded that it is a problem of perception
– in other words a myth. Lord Young, in his report on health and safety said. “The
problem of the compensation culture prevalent in society today is …… one of perception
rather than reality.”3 While Professor Lofsted, who was also asked to
review health and safety by the government said “The „compensation culture‟ (or
the perception of it) in the UK has been the subject of several reviews over the
last few years,, but no evidence has been presented for its existence”.4
In this report the TUC and the Association of Personal Injury Lawyers examines 7
myths around compensation in the workplace – and suggests three simple ways of ensuring
Workers are too ready to claim compensation
The simple truth is that, despite what the press and politicians may claim, workplace
claims have halved in the last ten years. Government figures show that there has
been a fall from 183,342 claims in 2002/03 to 91,115 in 2012/13.5
Despite this the Government is making it even harder for workers to claim compensation
after they are injured or made ill because of the negligence of their employer by
changing the law in favour of the employer by changing the burden of proof.6
Even those who win a case will be affected by additional costs. In the past, the
cost of bringing a claim was met by the wrongdoer – now, a significant part of that
cost will be borne by the victim. Even if they win, they face a cut in damages of
up to 25% to cover legal fees which, in the past would have been paid by the guilty
party. So, not only have workplace claims actually fallen, but the process of claiming
compensation has become tougher.7
Compensation claims are spiralling out of control
Six out of every seven workers who are injured or made ill through work get no compensation
at all. Each year around half a million people are made ill as a result of their
job and a further 110,000 are injured8. The most common injuries are
musculoskeletal disorders such as back injury or repetitive strain injury (RSI),
injuries from slips and falls, skin diseases, and deafness. Many people will get
better, some will not. Over 25,000 people are forced to give up work every year
as a result of work-related injuries or illness.
However the number who gain compensation from their employer is around 90,000 a
year9. A further 20,000 will make a successful claim for industrial injuries
benefit, which is a government funded “no fault” scheme10.
Compensation payments are too high
According to an analysis of nearly 64,000 claims in 2011, the majority of workplace
damages paid to injured workers are for less than £5,000 and around 75 per cent
of cases are for damages of less than £10,000.11
Unlike in some other countries, compensation is strictly based on what the claimant
has lost. Payments are based on guidelines and evidence and are designed to compensate
for actual loss, including pain and suffering, loss of earnings and future losses,
all of which are very carefully calculated. Future losses can include future loss
of earnings, pension loss, cost of care, medical treatment, and accommodation and
vehicle adaptations. Where the victim has died, bereavement damages, funeral expenses
and dependency claims would be considered.
Very occasionally there are settlements of over £250,000. These are, however, the
minority of cases and relate to people who have been very badly injured, people
who may require permanent around-the-clock care for many years and will probably
never work again. Often they will have lost the use of their limbs and/or be significantly
These damages are not a gift or a windfall for the injured individual and his family:
every case is calculated to the penny with the sole aim of putting claimants as
far as it is ever possible back to the position they were in before being needlessly
Litigation can be a difficult and stressful process for all concerned, and injured
people often express the view that all they want to do is wind the clock back to
a time before the injury and to put their lives back on track.
Compensation is paid for any old accident
In today's society, many people think it is possible to sue for compensation whenever
there's an accidental mishap, and that damages are just dished out automatically
by the courts. This is not the case.
For a claim to be successful the injured party has to prove that the other party
has been negligent, and this can be incredibly difficult. For negligence to have
taken place the incident must have been foreseeable and the actions or inactions
of the defendant must have led to the injury.
Proving an employer has been negligent can be particularly difficult for an employee.
Employers always have the upper hand as they are the ones who control the workplace
and the work equipment, and who hold all the information about systems in place.
This difficulty was recognised by the courts more than a century ago, and the legal
process changed to reflect this so that, if an employer caused an injury by breaching
health and safety regulations, the employee could rely on that breach as the basis
of his case.
The Government has now turned the clock back, in favour of employers, by changing
the law to require the claimant to prove the employer was negligent, which is much
So, not only is compensation not available for an accident but, where there has
been negligence, it is likely to be even harder to obtain than it was in Victorian
times, because of this change in the law.
There's a strong likelihood that many injured workers will be put off from making
claims for compensation for their injuries entirely, allowing many negligent employers
to avoid making amends, and leaving the state to pick up the tab for medical care
and any benefits arising from the injury.
It is unfair that insurance companies should have to pay out for diseases such as
asbestos-related diseases where they could not have known the risks.
The insurance market is about assessing risk, pricing premiums accordingly, investing
premiums collected, and hoping that the risks don‟t become a reality. If the employer
can show that he could not have known that there was a risk then he will not be
liable for damages. For example, claims for hearing loss can only be brought for
damage caused after the Health and Safety Executive (HSE) produced guidance on this
There have been health and safety controls on the use of asbestos since 1931, and
the risks have been known across the industry since the 1940s. Despite the known
dangers many employers continued to use it, and even now too many fail to take adequate
care where asbestos is present in their workplaces. Around 2,000 people are year
are dying from the asbestos-related cancer mesothelioma, usually from exposure to
asbestos many decades ago.
All these deaths would have been avoidable if the industry had protected its workforce.
The insurers insured these companies, and took their premiums, despite the knowledge
that exposure was occurring and that many would die. There is no reason why these
workers should be denied compensation just because the exposure took place many
years ago. The insurers were happy to take the risk and should meet their obligations.
There is no justification for the taxpayer having to pay the bill.
The insurers took their premiums, despite the knowledge that exposure was occurring
and that many would die. They were happy to take the risks and should meet their
obligations: there is no justification for the taxpayer having to pay the bill.
Many of these cases would not be taken if unions did not encourage their members
One of the main aims of unions is to prevent members becoming ill or injured through
their work. That is where most of their focus goes. However, if a member is injured
through the negligence of the employer and suffers financial loss, then the union
should advise the employee about his rights if requested to do so. The prospect
of compensation claims is a major factor in ensuring that employers protect the
health and safety of workers.
Unions offer high quality legal services that are tailored for speedy resolutions
of claims. At the same time, unlike a claims company, the lawyers will work with
the union to try to ensure that the employer takes action so that the cause of the
illness or injury is not repeated.
Lawyers often drag these cases on unnecessarily to keep their costs up.
Solicitors have a professional duty to act in the best interests of their clients.
This includes not dragging out cases simply to increase their costs without falling
foul of their regulatory body. That duty notwithstanding, it is important to note
that most personal injury cases now go through a new claims procedure, in which
legal costs which can be incurred by the claimant are fixed. For workplace claims
worth between £10,000 and £25,000 the maximum cost which can be incurred is £1,600.
Lawyers have absolutely nothing to gain by dragging cases out.
Costs could be reduced still further if defendants, when liable, were to admit liability
early. The failure of employers and insurers to do this also has other adverse effects.
It means that early treatment and proper rehabilitation for the victim cannot always
be offered when it is most needed. This means the condition may become worse and
the chance of recovery greatly reduced.
The compensation bill can be cut:
- if employers stop acting negligently and stop killing and injuring workers. The
insurance companies can help here by linking the premiums much more closely to the
actual risk within specific workplaces. Insurance companies should more readily
offer risk-based premiums that reflect an employer's health and safety history.
Good health and safety should be rewarded.
- If, when someone is injured or made ill through work the employer ensures the employee
has early access to proper rehabilitation. This means the worker will be more likely
to make a full or early recovery. Rehabilitation must not, however, be used as a
stick to beat the claimant with, to force the claimant to accept an offer or return
to work early. It must only be used as a means of enabling an injured person to
cope again either with work, or with family, domestic life and society.
- if insurance companies admit liability (where justified) early and follow court
rules so that costly medical and legal bills are not run up.
3 Lord Young, „Common Sense Common Safety‟ report 2010
4 Reclaiming health and safety for all: An independent review of health
and safety legislation. Professor Ragnar E Löfstedt, November 2011
5 Compensation Recovery Unit statistics, May 2013
6 Section 69 of the Enterprise and Regulatory Reform Act
7 Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2013
8 HSE annual statistics 2013
9 Compensation Recovery Unit statistics, May 2013
10 DWP Industrial Injuries Disablement Benefit statistics, September
11 Professor Paul Fenn, Nottingham UniversityBusiness School
12 Section 69 of the Enterprise and Regulatory Reform Act