Compensation culture – Could it be a good point?

shutterstock_132429839‘Compensation culture’. In recent years these two words have grow 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” method to life. Even so there’s some debate whether or not this compensation (or claims) culture really exists, or regardless of whether, as Lord Young suggests, it is more a issue of “perception rather than reality.” In this short post, element of which originally appeared in RoSPA’s OS&ampH journal, we look at the concerns surrounding compensation, as nicely as exploring whether claims for occupational injury and ill health could actually assist to drive positive well being and security adjustments.

Today’s workplace

According to HSE statistics, function-related injury or illness expense society £14.2 billion in 2012/2013, with the key charges to employers arising from productivity expenses (equivalent to the occupational/statutory sick spend payments created) and Employers’ Liability Compulsory Insurance premiums.

Because 1969, when the Employers’ Liability (Compulsory Insurance coverage) 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 reality that firms are not paying each and every claim straight from their personal pockets a disincentive to increase workplace overall health and security? Jonathan Wheeler, president of the Association of Private Injury Lawyers (APIL), does not feel so: “There are economic incentives [from insurers] in location to make sure that employers take the necessary steps to decrease accidents and ill health to the lowest achievable levels. Employers with a poor record might finish up with massive excesses or increased [insurance coverage] premiums.

“I believe that these days, insurers take quite a large function in assisting their consumers to make positive that accidents and negligence are at their lowest level.

“Responsible employers will want to minimise negligence anyway. But I think it is true that, occasionally, some employers require to be shamed or hit in the pocket to make required alterations to reduce injuries to the lowest level.”


One benefit attributable to the ‘claims culture’ is that each and every effective claim saves the country 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 successful compensation claimant since of their injury or illness. In the spirit of “the polluter pays” principle frequent in environmental law, the CRU recovers the advantages paid from the employer, and we are not speaking about a trivial quantity. In 2014/15 the CRU successfully recovered nearly £74 million from employers’ insurance for the taxpayer.


Any economic compensation that injured or ill workers can get is often welcome but evidence shows it is not excessive. Despite 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 much less than £5,000, and no doubt these awarded justifiable compensation would constantly rather not have had the injury/illness than have the funds. In the words of 1 Montana miner diagnosed with mesothelioma, “however a lot the companies paid, they will in no way have to spend like we did”.

The way ahead?

Compensation claims produce vast amounts of info, if only since defendant and plaintiff require the clearest and most detailed picture achievable. The U.S. is at the moment pioneering an initiative to exploit this data to the complete.

The Centre for Workers’ Compensation Research (CWCS) was established in 2013 by the country’s National Institute of Occupational Safety and Wellness (NIOSH) following analysis into techniques workers’ compensation claims could be utilized to decrease occupational accidents and ill health. Considering that then it has been analysing information from function-connected claims.

But what can compensation data tell us that well being and security statistics generated by wellness and safety regulators such as the HSE can’t?

“Compensation information consist of an unstructured narrative that describes how the injury/ illness occurred,” explains Steve Wurzelbacher, director of the CWCS. “The narrative acts like a brief story and if a huge sample of claims is study within an industry, suggestions for prevention develop that may in no way be possible if you are basically searching at coded information.

“Compensation data are also a single of the only sources of injury/illness information that supply information on the lead to of injury and resulting diagnoses and cost and treatment. There is a tremendous prevention prospective to tap inside workers’ compensation information.” This method is already bearing fruit, not least since it also encourages cooperation amongst compensation insurers and organisations to decrease injury and ill health.

But compensation claims do not just supply data, they can highlight wellness and security concerns. This can be specifically essential for emerging troubles, or circumstances exactly where the problem in query is not clear reduce. A existing 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 market denies this. Compensation claims may possibly soon aid to resolve this impasse by subjecting the situation 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 much more stringent investigation. accident (the dictionary project)


It is difficult to quantify the effect of compensation claims on overall health and security in the workplace. Nonetheless, beneath the surface, insurance coverage firms virtually certainly try to bring influence to bear by supplying greater premiums to employers with fewer successful claims against them.

Possibly the most persuasive case for the optimistic effects of compensation claims comes from the truth that insurers and business associations who issue bleak warnings about the ‘compensation culture’ also recognise the importance of excellent well being and safety practice in stopping these claims. As a single said: “The very best method is prevention. Carrying out things effectively need to have not be as onerous as several employers fear.”

This is an abridged version of an report by Nick Cook, which initially appeared in RoSPA’s Occupational Safety &amp Health Journal. For much more crucial overall health and security guides, facts and guidance, sign up to SafetyMatters, RoSPA’s free fortnightly newsletter and receive our collection of free of charge original e-books!


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