Compensation Myths | Paul Rooney

Compensation Myths

We recently published a news article on The Compensation Myth, a report released by the Trade Union Congress (TUC) in conjunction with the Association of Personal Injury Lawyers (APIL). The report debunked common myths about compensation claims and raised interesting ideas on how the compensation bill can be reduced.

Over the next seven weeks we’ll look at each of the myths in more detail, starting with: 

Myth 1: Compensation claims are spiralling out of control

We’ve heard it all before. If it isn’t Justice Secretary Chris Grayling talking about ‘the Government’s plan to tackle the growing compensation culture’, it’s the Department for Work and Pensions claiming that: “a damaging compensation culture is stifling innovation and growth”.

The simple truth is that the total number of compensation claims has actually fallen from 183,342 in 2002/3 to 91,115 in 2012/13.

Although claims have dropped by almost 50% over the last 10 years, the Government has changed the law in favour of the employer, making the claimant responsible for burden of proof. For example, let’s say that you have a potential claim and may be entitled to compensation. In the past, the cost of making a claim would be met by the guilty party. It’s not so straight forward now as that cost is transferred to the client, with up to 25% of the total damages being deducted to pay for legal fees.

While many people believe that compensation claims are spiralling out of control and damaging innovation and growth, the numbers tell a different story; compensation claims have actually fallen in the last 10 years. New laws have been introduced to discourage bogus claims and the process is now aimed toward rehabilitation and care with less focus on monetary compensation. These facts speak for themselves.

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