Compensation culture – Could it be a good issue?

shutterstock_132429839‘Compensation culture’. In recent years these two words have turn out to be joined at the hip. They conjure up a society of serial claimants, egged on by shyster lawyers to adopt a “where there’s a blame there’s a claim” approach to life. Nonetheless there’s some debate no matter whether this compensation (or claims) culture really exists, or whether or not, as Lord Young suggests, it is much more a difficulty of “perception rather than reality.” In this quick post, part of which initially appeared in RoSPA’s OS&ampH journal, we appear at the problems surrounding compensation, as well as exploring no matter whether claims for occupational injury and ill overall health could truly help to drive good overall health and security adjustments.

Today’s workplace

According to HSE statistics, operate-connected injury or illness expense society £14.2 billion in 2012/2013, with the major fees to employers arising from productivity charges (equivalent to the occupational/statutory sick pay payments produced) and Employers’ Liability Compulsory Insurance coverage premiums.

Because 1969, when the Employers’ Liability (Compulsory Insurance) Act came into force, UK employers must have insurance in place to allow them to meet the price of compensation for their employees’ injuries or illness.

Is the fact that firms are not paying each and every claim straight from their own pockets a disincentive to improve workplace wellness and security? Jonathan Wheeler, president of the Association of Private Injury Lawyers (APIL), does not consider so: “There are monetary incentives [from insurers] in location to make sure that employers take the needed steps to lessen accidents and ill well being to the lowest achievable levels. Employers with a poor record could finish up with large excesses or improved [insurance coverage] premiums.

“I think that these days, insurers take fairly a massive function in assisting their clientele to make sure that accidents and negligence are at their lowest level.

“Responsible employers will want to minimise negligence anyway. But I consider it is accurate that, often, some employers need to be shamed or hit in the pocket to make essential modifications to decrease injuries to the lowest level.”


One advantage attributable to the ‘claims culture’ is that each effective claim saves the nation funds.

shutterstock_249974521How? The Government’s Compensation Recovery Unit (CRU) monitors every single frequent law claim and recovers any government rewards currently paid to the effective compensation claimant since of their injury or illness. In the spirit of “the polluter pays” principle common in environmental law, the CRU recovers the rewards paid from the employer, and we are not speaking about a trivial quantity. In 2014/15 the CRU effectively recovered practically £74 million from employers’ insurance coverage for the taxpayer.


Any monetary compensation that injured or ill workers can get is usually welcome but evidence shows it is not excessive. In spite of the occasional ‘jackpot’ headline, average compensation awards are not measured in millions of pounds or even hundreds of thousands, 75% are for significantly less than £10,000 and the majority of these are significantly less than £5,000, and no doubt these awarded justifiable compensation would always rather not have had the injury/illness than have the cash. In the words of a single Montana miner diagnosed with mesothelioma, “however considerably the companies paid, they will by no means have to pay like we did”.

The way ahead?

Compensation claims generate vast amounts of info, if only because defendant and plaintiff need the clearest and most detailed image achievable. The U.S. is presently pioneering an initiative to exploit this information to the complete.

The Centre for Workers’ Compensation Studies (CWCS) was established in 2013 by the country’s National Institute of Occupational Security and Wellness (NIOSH) following research into techniques workers’ compensation claims could be used to decrease occupational accidents and ill overall health. Since then it has been analysing information from function-related claims.

But what can compensation data tell us that health and security statistics generated by overall health and security regulators such as the HSE can’t?

“Compensation information incorporate an unstructured narrative that describes how the injury/ illness occurred,” explains Steve Wurzelbacher, director of the CWCS. “The narrative acts like a short story and if a massive sample of claims is read within an market, tips for prevention create that could never be achievable if you are basically looking at coded data.

“Compensation information are also one particular of the only sources of injury/illness data that supply data on the lead to of injury and resulting diagnoses and expense and remedy. There is a tremendous prevention potential to tap within workers’ compensation data.” This approach is currently bearing fruit, not least due to the fact it also encourages cooperation in between compensation insurers and organisations to minimize injury and ill well being.

But compensation claims don’t just supply information, they can highlight well being and safety troubles. This can be particularly essential for emerging problems, or situations exactly where the problem in question is not clear reduce. A current instance of the latter is the contamination of aircraft cabin air by organophosphate-containing engine oil. Campaigners claim this contamination is affecting the wellness of aircrew. The industry denies this. Compensation claims may soon help to resolve this impasse by subjecting the problem to the glare of publicity. In June this year the union Unite announced legal action against UK airlines on behalf of 17 crew members claiming ill overall health due to inhaling contaminated cabin air. This in turn could trigger a more stringent investigation. accident (the dictionary project)


It is tough to quantify the impact of compensation claims on health and security in the workplace. Even so, beneath the surface, insurance organizations nearly certainly try to bring influence to bear by offering better premiums to employers with fewer successful claims against them.

Maybe the most persuasive case for the positive effects of compensation claims comes from the truth that insurers and enterprise associations who issue bleak warnings about the ‘compensation culture’ also recognise the importance of good health and safety practice in stopping these claims. As one particular stated: “The greatest strategy is prevention. Performing issues properly need not be as onerous as many employers fear.”

This is an abridged version of an report by Nick Cook, which initially appeared in RoSPA’s Occupational Security &amp Overall health Journal. For much more vital wellness and security guides, information and tips, sign up to SafetyMatters, RoSPA’s free of charge fortnightly newsletter and acquire our collection of cost-free original e-books!


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