Evidence submitted by Ken Oliphant, Cardiff
Law School
1. I am a senior lecturer at Cardiff Law
School, Cardiff University and a widely-published author on the
law of tort.[64]
I am also national reporter for the Yearbook of European Tort
Law, UK correspondent for the Torts Law Journal, and
convener of the Tort Section of the Society of Legal Scholars,
but I write here in a personal capacity.
2. One preliminary observation is warranted.
There is a great deal of uncertainty as to how the system of compensation
through the law of tort actually works in this country. There
has been no in-depth study of its operation for more than 20 years,[65]
and the empirical information that is available is fragmented,
limited in scope (including temporal scope), frequently contestable,
and open to widely differing interpretations. There is a pressing
need for further empirical work in this area. In the meantime,
it is possible to glean some information about claims numbers,
costs and trends from such material as is publicly-available,
and this is the subject of a research project that I am currently
conducting with my Cardiff colleagues Richard Lewis and Annette
Morris under the provisional title, "Statistics Concerning
Tort Claims: Is There a Compensation Culture in the United Kingdom?"
Much of the evidence cited below, and the analysis of it, comes
from that research.
I. Does the "compensation culture"
exist?
3. The term "compensation culture"
is too often employed uncritically, without any real effort to
explain the negative connotations that are clearly intended. That
there has been a rise in the number of compensation claims in
(say) the last 30 years is easy to establish. The Pearson Report
estimated that in 1973 approximately 250,000 personal injury claims
were pursued through the tort system. Compensation Recovery Unit
(CRU) figures now demonstrate that, in four of the last five years,
new personal injury claims have numbered in excess of 700,000.
But the mere rise in claims numbers does not itself provide evidence
of a debilitating compensation culture—it could be, for
example, that there was very significant under-claiming in the
past. It is frequently suggested in the media that much of the
increase is accounted for by claims that are in some sense unworthy,
but this seems to reflect urban myth rather than fact (consider,
for example, the case of "Winnebago man" that has been
reported as fact in British newspapers), and it should be noted
that successful tort claims must satisfy a number of stringent
requirements which have not (in my opinion) been significantly
watered down in recent years. In the personal injury context,
it is particularly worth noting that claimants must prove that
they have suffered an injury, and that feelings of grievance,
unhappiness, distress, etc, are insufficient basis on which to
claim.
4. I am, however, prepared to accept the
analysis of the Better Regulation Taskforce (Better Routes
to Redress, 2004) that the perception that there is a compensation
culture has in itself a number of negative consequences, though
I believe that these should not be overstated.
II. What has been the effect of the move
to "no-win no-fee"?
5. It is often suggested that the effect
of the move to conditional fee arrangements (CFAs) has been to
fuel the compensation culture. But in fact the number of tort
claims shows no real sign of having been affected either by the
introduction of CFAs in 1995, primarily because their take-up
was at first so low, or by their becoming the principal mechanism
for funding personal injury litigation from April 2000 on (as
a consequence of the Access to Justice Act 1999). The number of
tort claims for accidental personal injury has remained remarkably
constant over the period for which CRU figures are available,
and in fact was lower in 2003-04 and 2004-05 than in any of the
preceding three years. (By the way, this proposition does not,
as Better Routes to Redress has it, "ignore . . .
the fact that many claims are settled out of court" (p 11):
the figures are for claims notified to CRU, and includes the vast—in
fact, the overwhelming—majority of all claims that are made,
whether they are subsequently resolved in or out of court.) There
has, it must be admitted, been a dramatic rise in disease claims
in 2003-04 and 2004-05, with consequent impact on the total personal
injury claims figures for those years, but this seems to have
been wholly the result of the closing of the British Coal compensation
schemes for respiratory diseases and vibration white finger (with
a reporting time-lag likely to have been responsible for the inflated
figures in 2004-05 after the closure of the schemes, though I
cannot be certain of this.) It seems therefore that "the
apparent explosion of litigation in the latter half of the 1990s
and the early years of the 21st century", contrary to the
statement in Better Routes to Redress (p 11), was not attributable
to the rise of CFAs and the growth of claims management companies.
This is one of the key messages of the research I am engaged in
with Lewis and Morris, and has been more fully considered by Morris
in a forthcoming article ("The Compensation Culture Debate
and Tort `Lore': Lies, Damned Lies and Statistics"). The
rise in claims numbers is, in my opinion, most likely to have
occurred over the 1980s and early 1990s, though this is the precise
period for which reliable statistics are unavailable.
III. Is the notion of a "compensation
culture" leading to unnecessary risk averseness in public
bodies?
6. I have no expertise in this area, though
I would note that—if there is such risk averseness—it
is more attributable to the perception that there is a compensation
culture (and, more specifically, that unworthy claims are likely
to be upheld, or at least to require substantial pay-offs), than
to the reality (namely, that the courts will actually uphold such
claims). The decision of the House of Lords in Tomlinson v Congleton
Borough Council (2003) has sent a clear message to public bodies
that the courts are "on their side", though the facts
of the case (destruction of a valuable public amenity) illustrate
how some public bodies have responded in a detrimentally defensive
fashion to the prospect of litigation against them.
IV. Should firms which refer people, manage
or advertise conditional fee agreements be subject to regulations?
7. Again, I have no expertise in this area.
V. Should any changes be made to the current
laws relating to negligence?
8. I would be opposed to changes in the
current laws relation to negligence, at least for the time being.
I am rather sceptical of the claim that is sometimes made that
the courts, by adopting an over-lenient attitude to "unworthy"
claims, have contributed to the rise of a compensation culture.
Even if this contains a grain of truth, however, the Tomlinson
decision—followed up by Gorringe v Calderdale Metropolitan
Borough Council (2004)—has shown the House of Lords taking
the lead in calming undue fears connected with the potential liabilities
of public bodies. In my view, the Government has got it about
right in its current Compensation Bill, which reinforces the (reassuring)
message of the House of Lords decisions whilst not actually effecting
any change in the substantive law.
Ken Oliphant
Senior Lecturer
Cardiff Law School
November 2005
64 See, eg, A Mullis and K Oliphant, Torts
(3rd edn 2003), M Lunney and K Oliphant, Tort Law: Text and
Materials (2nd edn 2003), and A Grubb (ed), The Law of
Tort (2002), chs 1, 8, 20 and 27. I am general editor designate
of the second edition of the last of these titles Back
65
The two principal studies that have been conducted are Report
of the Royal Commission on Compensation for Personal Injury
(Chairman: Lord Pearson), 3 vols, Cmnd 7054, 1978 ["the Pearson
Report"], and D Harris et al, Compensation and
Support for Personal Injury (1984) ["the Harris survey"] Back
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