Microsoft word - furedi.docCourting Mistrust The hidden growth of a culture of litigation in Britain CENTRE FOR POLICY STUDIES 57 Tufton Street London SW1P 3QL T H E A U T H O R
Frank Furedi is a Reader in Sociology at the University of Kent atCanterbury. He is currently researching why people become litigiousand what happens to their lives in the course of litigation. His manypublications include The Culture of Fear – Risk-Taking and the Moralityof Low Expectations (Cassell 1997). He has written widely oncontemporary sociological issues in newspapers and provides regularcomment on radio and television.
This project has benefited from the advice and information provided by individuals too many to mention. The Legal Aid Board and The Law Society provided important information, which otherwise would have been difficult to access. Mr Bruno Waterfield, who worked as a researcher on this project, managed to track down important information from the most unlikely places. I am particularly grateful to Tracey C. Brown, co-ordinator of The Litigious Society Project for sharing so much of her knowledge of the subject. Support towards research for this Study was given by the Institute for Policy Research.
The Centre for Policy Studies never expresses a corporate view in any of its publications. Contributions are chosen for their independence of thought and cogency of argument. ISBN No. 1 897969 95 3 Centre for Policy Studies, April 1999 Printed by The Chameleon Press, 5 – 25 Burr Road, London SW18 C O N T E N T S
The Changing Contours of Litigation in Britain Complaining Britain The Hidden Litigation Crisis The Liability Explosion A New Legal Culture The Politics of Claims-Making The Impact on British Society The Problem of Trust Blame and Responsibility 1. Attitudes towards litigation and compensation have changed in the last 15 years. The numbers of complaints and claims aresteadily increasing in a number of important areas. Everysector of public life is affected.
2. Expenditure on both compensation and legal fees has grown significantly. Estimates range from £6.8 billion, to, at the mostconservative, £3.3 billion. The public sector alone is forced topay out around £1.8 billion in compensation.
3. The most significant single development in the rise of the culture of compensation is the expansion of liability to areasthat were previously immune from it. Claims forcompensation against schools by former pupils alleging thatthey were let down by the system; claims by soldiers allegingtrauma based on events 15 years in the past; claims innegligence against banks for not warning property speculatorsof a downturn in the market; all these add up to a grossmisuse of the law of tort to compensate for every misfortune.
4. This explosion of litigation now has formidable momentum.
The inexorable upward trend will be exacerbated by theclassification of psychiatric distress as a basis for demandingcompensation; by the implementation in April 1999 of theWoolf reforms of civil procedure – particularly its furtherdevelopment of the conditional fee system; and by the adventof the Human Rights Act.
5. The growth of the culture of litigation has been paralleled by the expansion of the legal profession. During the past twodecades, the number of practising barristers and solicitors hasmore than doubled in England and Wales. Turnover in legalbusiness in England and Wales now represents around 1.3% ofthe Gross Domestic Product of England and Wales.
6. Litigation is only in small measure conducted through the court (as many as 98% of cases are settled out of court). Thescale of the litigation crisis remains hidden from public view. 7. Contrary to the arguments of some of its advocates, there is little evidence that litigation contributes towardsorganisational efficiency. It does, however, create a climate of‘litigation-avoidance'. The dynamic of litigation-avoidance, inturn, leads to the diminishing of the quality of life. The closureof playgrounds and the imposition of restrictions on youngpeople's outdoor activities are some of the untowardconsequences of the dictates of litigation-avoidance.
8. A most damaging consequence of the culture of compensation is its impact on human relations. It promotes suspicion andconflict and directly undermines relations of trust and the senseof personal responsibility.
9. Despite the claim of legal professionals, litigation does not empower the individual. On the contrary, it places people in adependent relationship to professional advisers.
10. The present system of litigation is arbitrary and unfair. It represents an unacknowledged tax on the British public and itdeprives the public services of resources which couldotherwise be used to improve the public services.
1. The roots of the culture of compensation can be found in a combination of political, social and legal developments. Therewill be no easy solutions to the problem.
2. However, greater publicity of the extent of the problem (particularly in the public sector) will at least reveal thoseorganisations who have the worst performance in attractingand resolving compensation claims.
3. In addition, some areas of compensation – such as psychological injury – ought to be restricted. Similarly, theconcept of contributory negligence could be reviewed.
4. Upper limits for compensation claims could be set by Parliament (as already happens in the case of employment law).
5. Guidance from the Lord Chancellor or the Lord Chief Justice could recommend that the judiciary should also consider thewider impact on society of compensation payments.
6. However, it must be recognised that changes to the law will not in themselves be enough to reverse a trend which is nowrunning deeply through British society. A wider public debateis needed to bring about the change in attitudes which isnecessary if the culture of compensation is not to underminemany of our traditional freedoms.
See Chapter 11 for further details on these and other recommendations C H A P T E R O N E
DURING THE PAST YEAR, a new term has crept into the Britishpolitical vocabulary: the ‘culture of compensation'. Newspapershave begun to debate and try to make sense of this ‘new'phenomenon. Considerable public disquiet has been expressedabout the large compensation payments received by members ofthe police and other essential services. As pay-outs for medicalnegligence have reached record figures, many observers haveraised questions about how far Britain has gone down the road ofAmerica's culture of compensation.
Until now, very little research has been conducted into the impact of litigation on British society.2 Legal professionals – whohave seldom considered the wider social and cultural impact oflitigation – have written most of the published material that exists.
Since most compensation settlements are made out of court, thereare no figures on either the total sums involved, or the rate ofincrease in the number of new cases. Many of the parties involvedare disinclined to discuss the issue of litigation in public. Fearingnegative publicity, they are reluctant to disclose the sums involvedor even to acknowledge publicly the number of claims mountedagainst their organisation.
The primary research undertaken for this pamphlet suggests that the lack oftransparency regarding claims-making points to a concealed culture of litigation.
In many instances, investigations have been hindered by the hesitation ofrelevant bodies and authorities to provide ‘on-the-record', quotableinformation.
The main justification for tort law is that it provides the means for holding individuals and organisations to account for thedamage and injury that their negligent action has inflicted onothers. Yet the issue of compensation has, in recent years,overtaken this function of allocating responsibility. Sadly, thetransformation of the tort law into a system of compensationmeans that it no longer serves as an efficient instrument forallocating individual responsibility.
The culture of compensation is increasingly becoming separated from legal principles. It is interested mainly in findingsomeone who can be held liable and who can pay – and not in theissue of responsibility. That is why a campaign launched on behalfof British POWs held in Japan has opted for suing the BritishGovernment. Having concluded that the Japanese Governmentwill not pay them compensation, the campaign has reoriented itsenergies towards a target that is more likely to pay compensation.
A similar course of action was adopted in the pursuit ofcompensation for women allegedly experiencing problems with acontraceptive implant, Norplant. Here compensation was soughtnot from the doctors who had prescribed the product (and whowere arguably more responsible for many of the claimedproblems), but from the manufacturers of the product (who wereseen to be more likely to make a generous settlement of the case).
Clearly the link between the demand for compensation and actualresponsibility has become negotiable.
In a just society, individuals must be held accountable for the harm they do to others, and so must corporations. Largecompanies have the power to affect the lives of many people, andcan also use their power to evade responsibility for their actions.
Paradoxically, the culture of compensation actually encouragesboth individual and corporate irresponsibility. Whencompensation becomes the fundamental objective of a legal claim,issues of responsibility and accountability become negotiable.
Through the present system of out-of-court settlements,corporations are often able to avoid taking direct responsibility for the damages they inflict on the public and the community.
Moreover, the tendency to attribute every misfortune to the actionof a private or public organisation creates a climate where thepublic finds it difficult to distinguish between a company caughtup in a trivial compensation case and one that has causedforeseeable damage to the community.
This pamphlet is not written by a lawyer for the legal professional. Although the issues raised in this pamphlet aredirectly connected to the system of tort, the concern here is withthe much wider subject of compensation.3 The focus is not onquestions of jurisprudence but on the sociological and politicalimpact of compensation culture on British society.
Many lawyers, especially those involved in the field of personal injury contend that the problem facing British society is not toomuch, but too little, litigation. This pamphlet might raise a fewquestions that will stimulate the legal world to think again aboutthe issues – for the culture of compensation is a subject that is fartoo important to be confined to the legal profession.
See Appendix A for an analysis of how this study relates to the system of tort.
C H A P T E R T W O
IT IS EASY TO FORGET that not so long ago people who hadsuffered an injury, even a terrible one, did not automaticallyconclude that they should go to court to seek compensation.
Relatives of the 116 children and 28 adults, who died during the1966 Aberfan disaster, took the view that they did not want topursue prosecutions because that would be ‘to bow to vengeance'.
Despite the horror of a village school engulfed by a coal-tip slide,nobody demanded compensation for their trauma or theirpsychological distress.
Back in the 1970s, individuals who were injured through an act of crime were often puzzled, when they were informed that theywere entitled to compensation from the Criminal InjuriesCompensation Board. Twenty years ago, the Board was perplexedat the low response to its compensation scheme. By the 1980s, andcertainly in the 1990s, attitudes towards complaining, blaming andlitigating had changed. So while at the time, the Aberfan parentsdid not litigate, a woman, who witnessed the disaster as a child of11, issued a writ against British Coal in September 1990 on thegrounds that the horrific scenes of this tragedy caused her to suffera nervous breakdown 12 years after the incident.
Today, it is inconceivable that a group of people caught up in a major disaster would reject the option of claiming damages.
Compensation is now systematically pursued for a variety ofexperiences that in the past would not have been interpreted asworthy of litigation. Today, holiday-makers claim compensationfrom tour operators when their vacation fails to meet their expectations; young adults demand compensation from educationauthorities in the belief that their poor school performance wasthe fault of their education authorities; and military andemergency services personnel demand compensation for thetrauma that they experienced in the course of carrying out theirunpleasant duties. Employees now go to court to claim damagesfor the stress they have suffered as a result of being overworked.
Clients unhappy with a hair cut or perm sue hairdressers.
The precise scale of litigious activity in Britain is a source of some controversy. There is little consensus even within the legalprofession. Many personal injury lawyers claim that talk of alitigation explosion is misplaced; after all, they maintain, mostpeople who have been injured do not engage in legal action.
However, while the exact dimension of litigation can be disputedthere can be little doubt that British attitudes towardscomplaining, blaming and litigating have been transformed.
It is impossible to quantify precisely the scale of this change as most cases – possibly as many as 98% – are settled without a fulltrial. Such out-of-court payments are often subject to aconfidentiality clause, at the defendant's insistence, and suchsettlements are seldom disclosed to the public. This makes itdifficult to obtain the precise facts in this shadow quasi-legalworld. Nevertheless, it is possible to garner sufficient informationto begin to identify trends.
THE TRADITIONAL VIEW OF BRITAIN as a nation of the stiff upperlip, where people rarely complain bears little relationship to thecontemporary situation. Many public sector bodies andprofessional, voluntary and business organisations report that theyare receiving a growing number of complaints.
This trend is not restricted to high-profile providers of public services, such as the recently privatised railway companies.
Organisations such as the Guild of Professional Beauty Therapistsreport a rise in ‘professional complainers'. Published surveyssupport a wealth of anecdotal evidence on the subject. ResolvingCivil Disputes, a survey published by the Lord Chancellor'sDepartment, is categorical on this matter. It noted that the 1980ssaw a ‘complaints explosion' which materially increased theworkload of a diverse range of institutions in the private andpublic sectors.4 Organisations, such as the Trading StandardsDepartments, Banking Ombudsman, Local GovernmentOmbudsman, ABTA and the Independent Television Commissionhave all reported a steady rise in complaints.
It appears that virtually no public organisation is immune from the complaints explosion. The number of complaints against thepolice in England and Wales has increased steadily between theyears 1973 to 1996 from 12,886 to 35,840. The health sector has T. Goriely & T. Williams, Resolving Civil Disputes: Choosing Between Out-Of CourtsSchemes And Litigation; A Review Of The Literature, Lord Chancellor'sDepartment, Research Series no. 3/97, 1997, p. 13.
become particularly vulnerable to complaints from the public. In1997, the General Medical Council reported a 25% increase abovethe previous year in the number of inquiries and complaintsagainst doctors. Complaints received by the Health ServiceOmbudsman have risen by an average of 20% each year for thelast five years. The Office for the Supervision of Solicitors is facinga major crisis as complaints against solicitors have reached recordlevels. Unable to deal with the 35,000 complaints it receives a year,the Government has threatened to create a new agency to dealwith the problem.
During the past five years complaints in the Gas Industry are up by 48%, in telecommunications, up by 178% and in financialservices up by 40%. In 1991, fewer than 8,000 people complained tothe Office of Fair Trading about their tour operator. Six years later,in 1997, this figure had nearly doubled to 14,000 complaints.
This culture of complaint is driven by a new industry of complaint advocates, who are dedicated to discovering newproblems to complain about. In recent years, various reports haveaddressed what their authors perceive as a need to ‘raise publicawareness' about the fact that too few people complain. Forexample, a recent report by the National Consumer Councilincludes a section headed: ‘Why Don't You Complain?' Consumerorganisations and many legal professionals now assume thatcomplaining is by definition a positive and constructive act of civicresponsibility because it can alter and improve the way thatservices are provided to others in the future.5 In recent years, politicians across the political spectrum have promoted complaining as useful source of input for the efficientdelivery of services. A statement approved by a ConservativeCabinet seminar in February 1993, to the effect that ‘complaintsare jewels to be cherished', would probably meet with theendorsement of leading New Labour and Liberal Democratpoliticians. But the suggestion that the institutionalisation of _5 See ibid. p. 29.
complaining is inherently a positive and constructive socialdevelopment is highly questionable. On the contrary, it is arguablethat the promotion of complaining may well divert energy awayfrom the search for solutions, and towards the formalisation ofgrievances through litigation.
A CURSORY INSPECTION of the number of people directly involvedin litigation suggests that, rather than British society becomingincreasingly litigious, it is in fact turning its face against the courts.
Rather than the number of people involved in litigation being onthe increase, as one might expect from what has been written above,the number of litigants is falling. However, such a conclusion wouldunderestimate the full extent of the culture of litigation.
In reality, the majority of litigious activity takes place through alternative dispute resolution, out-of-court action and quasi-legalarenas such as arbitration and mediation boards.
The past decade has witnessed a decline in the number of cases reaching courts under the tort system. Civil cases, disposed of inthe High Court decreased by 78% from a high of 19,538 in 1988,to just 4,229 in 1997. The number of personal injury casesdisposed of has declined at a similar rate, from 14,410 in 1988 to2,850 in 1996. One reason for fewer cases entering the HighCourt is that due to new rules, more cases can be heard in thelower (and cheaper) courts. Since July 1991, county courts havebeen able to deal with all contract and tort cases, regardless ofvalue. Previously there was a limit of £5,000. However, the workof the county courts has also been declining since the early 1990s,from a recession-led high of 26,722 disposals by trial in 1992, tojust 15,511 disposals by trials in 1997.
From these lower figures, many legal commentators conclude that Britain is not experiencing a litigation crisis. But a closerexamination of developments provides for a very different interpretation of contemporary trends. The full scale of litigiousactivity can not be grasped from judicial statistics dealing with theHigh and County Courts. Most litigious activity now takes place inthree important areas: court linked arbitration, mediation schemes and settlements; use of quasi-legal arenas and other mediation schemes; out-of-court settlements.
Much of the claim-making in these three sectors remains hidden from public scrutiny. Data on private sector settlements isnot even collated.
One of the most important innovations in litigious activity is the growth of arbitration and Alternative Dispute Resolution(ADR). In an effort to reduce the cost of the legal system,government reforms have promoted arbitration as cheapalternative to resolving cases in the courts. Many of the proposedWoolf Reforms, being implemented by the Lord Chancellor at thetime of writing, are devoted to expanding out-of-court resolutionsthrough improving support, funding and incentives.
Since the late 1980s, several organisations linked to the legal profession have emerged to promote and support alternativemeans of dispute resolution. In 1989, the Alternative DisputeResolution Group was founded to provide solicitors trained inmediation and out-of-court dispute resolution. In 1990, theCentre for Alternative Dispute Resolution (CEDR) was establishedwith the support of the Confederation of British Industry.
Last year, the CEDR reported that the number of mediations in the year ending April 1998 had risen by 106% over theprevious year. Figures available for the current year indicate asimilar rate of increase. The annual combined claims valuehandled by the CEDR now exceeds £4 billion with a settlementrate of 85%. Many of the cases handled by the CEDR involve tortclaims. Medical negligence accounts for 2% of all cases, whileprofessional negligence has leaped from 19% in the year ending April 1998 to 29% of all cases in the current year.6 Claims-makingfor medical and professional negligence represent precisely thetype of litigious activity that is overlooked by studies that equatelitigation to formal court proceedings.
There is considerable evidence that many claim-makers prefer to pursue their case outside the formal court system. A new breedof claims-brokering initiatives has promoted the possibility ofclaiming compensation, with little risk of going to trial. The largeresponse to these initiatives suggests that avoiding the court is amajor attraction for potential litigants. The Law Society launchedAccident Line in 1994 to put members of the public in touch withits personal injury panel of solicitors. From its first year ofoperation until 1998, the average calls received per month rosefrom 1,000 to just over 2,000. Claims Direct, a commercialfranchise scheme offering claims management to accident victims,was launched in 1996 and claims to have settled 2,600 claims todate, with an overall compensation value in excess of £8 million.
The lack of connection between the propensity to sue and court action is well illustrated in the case of medical negligence.
The NHS litigation authority estimates that no more than 5% ofclaims reported to the authority by NHS trusts reach trial status.
The overall number of negligence and personal injury casesreaching the High Court has declined by 40%, from 1,600 in 1988to 960 in 1996 (excluding road accidents and accidents at work).7However, this fall in court-related activity is not reflected througha lower volume of claims. The National Audit Office projects thecosts of clinical negligence litigation against NHS trusts to rise488% from £85 million in 1991 to £500 million in the comingyear. This rise includes an increase in both the volume of claimsand quantum levels. Several NHS trusts have reported a steadyrise in the number of solicitors' letters they have received in recentyears. Compensation and legal payments made by the mutual Annual Report 1997/98, CEDR, 1998.
Lord Chancellor's Department, Judicial Statistics, Annual Reports, HMSO, 1988-96.
funds of the Medical Defence Union have increased from £29million in 1992 to £67 million in 1997. This represents a rise of231% over 5 years.
A survey carried out by the National Audit Office covering hospitals in Wales reported that the cost of incidents which couldlead to a claim of medical negligence have increased by 700% injust one year. The escalating cost of these claims has left Welshhealth authorities with an estimated debt that could amount toalmost £50 million by the end of March 1999.
According to most estimates, only one or two per cent of claims, even among accident victims with serious injuries, lead to acontested court hearing.8 The rest are conducted out of court onthe basis of private negotiations between the two sides. Forexample, a recent study of 150 sample personal injury cases foundthat all of them were dealt with out of court.9 With so many claimspromoted informally and behind the scenes, it is impossible toquantify the full scale of Britain's concealed litigation culture.
The finances of public organisations, such as NHS trusts and the police authorities, are a matter of public record and thereforesome general data is collated about the cost of compensation andclaims-making. But in the private sector, other indicators oflitigious activity have to be used, particularly where settlementsare reached ‘off the record' and hidden from public scrutiny.
Settling is often done ‘without prejudice' – that is with noadmission of liability by the party making an offer of claimsettlement. Such arrangements are also often the subject of strictsecrecy clauses. In some situations, a claim-maker provides nosubstantial evidence of negligence, but still the case is settled. Suchsettlements are often motivated by a company's fear of bad _ 8 Even the Legal Aid Board Research Unit can only make a ‘guestimate' of thepercentage of cases that go trial. One of its reports notes that ‘the precise figureremains unclear'. See P. Pleasence, S. Maclean & A. Morley, Profiling Civil Litigation,Legal Aid Board Research Unit, Research Paper 1, London, 1996, p. 33.
Report of the Case Profiling Study, Personal Injury Litigation in Practice, Legal Aid Board Research Unit, London, 1998, p. 15.
publicity and the concern that publicising an actual or impendingcourt case could lead to a collapse of public confidence in aspecific product.
Personal injury lawyers know that companies do not want bad publicity. Lawyers identify such concerns as weaknesses they canexploit and use it to pressurise companies to settle in order toavoid litigation. This approach is promoted in a well-knownhandbook, Pollution & Personal Injury: Toxic Torts which offersadvice to would-be litigates in the field of environmental law. Theauthors argue that since companies have to worry about their‘own public image' and ‘their relations with the media', they maynot pursue an avenue ‘potentially fruitful in the litigation' butwhich may harm their ‘wider interest'.10 The authors have rightlyconcluded that the threat of negative publicity places pressure onorganisations to come to secret out-of-court settlements.
Nervousness about litigation means that insurance companies, public corporations and businesses are reluctant to discuss thevolume of claims made against them. They are also concerned toavoid publicity regarding the size of awards reached through out-of-court settlements. Off-the-record interviews with senior managersindicate that insurance companies actively encourage privatesettlements on the grounds of saving legal and other costs. In oneinstance, a senior manager, who was a fervent believer in the valueof his product and who regarded a claim for damages as a welcomeopportunity to demonstrate its safety, was placed under strongpressure from his head office to settle. It was only when he madethe matter an issue of confidence in the product and the companythat he was allowed to contest the claim. This he managed to pursueto a successful conclusion. Such examples are rare in a climatewhere even the potential threat of negative publicity encouragesmany companies to offer a behind-the-scenes deal.
C. Pugh & M. Day, Pollution & Personal Injury; Toxic Torts, Cameron May, 1995,pp. 56-57.
Information gained from Local Authorities indicates that this sector has also become an important area for litigation.
Consequently, Local Authorities are facing problems with theirinsurance cover due to the inordinate rise in claims against theiremergency and public services and education authorities over thelast ten years. This has caused their main insurer, Municipal MutualInsurance to cease trading and, in education cases, authoritiescannot now insure against the first £100,000 of any claim.
The problem faced by local authorities is not the cost of individual claims, which tend to be quite small – on averagearound £1,750 – but their cumulative cost. Some large authoritiesface around 1,000 total claims a year and this can cost them over£2 million in compensation and legal fees.
Litigation is also on the increase in the workplace. In 1997, 110,000 people took their grievances to an industrial tribunal, afourfold increase over the 1990 figure. Personal injury claims areon the rise in the emergency services. The armed forces have seena steep rise in such cases. In 1987, the legal immunity of thearmed forces from personal law suit was scrapped, leading to thegrowth of a compensation culture into the military. There werefour personal injury cases in 1989. By 1994, it had risen to 136.
Three years later, this figure rose to more than 1,000 claims andlast year, nearly 1,500 law suits were initiated. The total cost ofcompensation payments paid out by the armed forces last year was£65 million.
A similar pattern is at work in the police force. It is estimated that between 3,000 and 4,000 officers are currently seekingcompensation for injury, with total claims in excess of £40 million.
The compensation bill for the armed forces and the police alonenow exceeds £105 million.
THE MOST SIGNIFICANT DEVELOPMENT in British litigation is notthe volume of court cases but the extension of formalised liabilityinto new areas. As a result the number of scenarios which can nowlead to a demand for compensation has expanded dramatically. Asone important review of this phenomenon observed: We are now seeing whole new types of claims which were simply notconsidered by practitioners twenty or thirty years ago.11 The examples alluded to in this review includes the case of a manwho won legal aid to sue, for ‘personal injury and loss', a councilhe claims negligently failed to have him adopted when a child.
Another example of this trend was the case of a man who secured£45,000 in an out-of-court settlement from Trafford HealthAuthority on the grounds that one of the causes of his killing hismother was the Health Authority's negligent discharge of him.
The expansion of litigation has had an important impact on the work of even voluntary organisations and sporting bodies.
Organisations like the Boy Scouts now take the threat of litigationseriously. In recent years there has been an upsurge in sportsrelated-litigation. As a result sportsmen and women are now advisedto take out full public liability insurance against any potential claims:as a result of a number of test cases, a referee can be subject to civilaction if he fails to send a player off for an offence and later that See J. Stapleton, ‘In Restraint of Tort' in P. Birks (ed.) The Frontiers of Liability,Oxford University Press, 1994, pp. 83-84.
player caused an injury to another. According to a leading sportslawyer, gymnastics, golf, tennis and track and field trainers ‘arerisking potential litigation if an athlete who is paying for tuition doesnot improve, or even worse, loses form'.12 In some cases, new liabilities have been the product of new British or European regulations. In 1992, a European Directive(incorporated into British law as the Package Travel Regulations1992) made package holiday operators legally responsible for allaspects of the holidays they sell. A landmark High Court actiontwo years later set a new precedent when a plaintiff brought anaction against a tour operator after she suffered food poisoningwhile on holiday in the Caribbean. The operator was eventuallyforced to settle and paid compensation to around 100 claimants.
Although it was kept secret, the total settlement was rumoured at£750,000. This action helped encourage a wave of similar claimsover recent years. One of the largest claims is being co-ordinatedby a firm of solicitors in Nottingham, and involves the cases of 600people who suffered food poisoning on holiday in Bodrum.
In 1996, legal aid was granted to two young women to pursue their claim against the company, Thomson Tours afterexperiencing sexual harassment on holiday in Tunisia. Thomsonwas eventually ordered by the court to pay £3,000. The success ofthis case has also led to a rise in the number of distress claimsagainst tour operators. Not surprisingly, holiday companies nowface an explosion of claims, including a multi-party action claimfor damages for post-traumatic stress, following a plane over-shooting the runway. The tourism industry does not compilefigures for compensation payment, though it is estimated that in1997 a record £50 million was paid to dissatisfied holiday makers.
Most often, new liabilities are constructed and defined by the courts through the cases that are given leave to proceed. Forexample, in 1996, a 59 year-old cancer sufferer from Portsmouth,Cyril Smith, was granted legal aid to pursue a case against the _ 12 See R. Elvin ‘Laying Down the Law', Leisure Management, October 1998, p. 19.
NHS because he was still alive. He claimed for loss of earnings andtrauma because he had been told, upon diagnosis of his cancerthree years before, that he had only three to six months to live.
The Cyril Smith case symbolises the new legal consensus thatcontends that individuals can assign blame on service providersfor the unexpected consequences of their misfortune. Thereallocation of blame through litigation helps endow thecomplainant with moral authority.
Recently, a man who was paralysed when his car skidded on black ice gained legal aid to sue a local authority for damages ofup to £3 million. In this precedent-setting case, for the potentialliability of local authorities, the Court of Appeal ruled that EastSussex County Council had failed in its statutory duty as thehighway authority.
The extension of liability has also had a major impact on employers. An important focus for litigation against employers isthe surge of claims from staff claiming compensation for sufferingfrom stress. The important legal precedent was set in April 1996,when John Walker, a senior social worker received £175,000compensation for the ‘psychiatric damage to a normally robustpersonality'. The High Court ruled that an ‘impossible workload'placed on Walker was the cause of his nervous breakdown. Thisrise in stress claims may help to account for the fact that, despitethe decline of heavy industry and dramatic improvements inhealth and safety standards, the number of cases going toemployment tribunals is on the increase. The trade unions havebeen at the forefront of promoting stress claims, and now activelyencourage their members to sue for compensation.
One of the most extraordinary innovations of the culture of litigation has been the acceptance of an ever-wideningunderstanding of psychological distress. Claims based on a newgeneration of psychological injuries are on the rise, and seem setto continue to do so. Mental distress, trauma, stress, and loss ofconfidence and self-esteem are increasingly presented aslegitimate grounds for compensation.
Recently a deputy head teacher received £100,000 in an out-of court settlement after allegations that a bullying head teacherdrove him to a nervous breakdown. The central incident in thesaga occurred when he was asked to present a wrapped Christmasgift to a former teacher. It turned out to be a chocolate penis,which he was asked to hand over with the words: ‘I hope youenjoy a nibble this Christmas'. The incident apparently caused thelitigant so much distress that he could no longer continue in theteaching profession. Many were drawn to ask whether this sort ofbanter was worthy of a £100,000 pay-out. The culture ofcompensation, however, leaves such scruples trailing in its wake. Itis the subjective standard of how people feel that seems to be thenew motor of litigation, rather than any more objective standardbased on genuine damage after a meaningful harm.
IN THE PAST, IT WAS CLAIMED that one of the reasons whylitigation was more prevalent in the USA than in Britain wasbecause the latter lacked a contingency fee system, or amechanism for class actions. It was also argued that restrictions onadvertising prevented British lawyers from going down the roadof American style ambulance-chasing. Today, all thesemechanisms are in place in Britain and lawyers and their clientsare actively borrowing from the American experience of litigation.
1995 saw the introduction of the Conditional Fee Agreements Order. Since then, the conditional fee system has expanded tocreate a restricted version of the American ‘no-win, no fee' system.
On 26 April 1999, the date for the implementation of the Woolfreport, the system will be extended further. Although it is notclear whether this shift to a more extensive conditional fee systemwill by itself stimulate more litigation, it will provideentrepreneurial lawyers with more opportunities to extend theboundaries of compensation culture. Innovative ‘no win – no fee'cases have been mounted in areas as far apart as libel and sportsinjury. Indeed, the whole tenor of the Woolf Report is to make iteasier for litigants to bring cases, to make litigation simpler,speedier and cheaper. While this is in many ways entirelycommendable, there can be little doubt that it will also have theunintended consequence of encouraging more people to look tothe courts for the answer to their problems.
Since the 1980s, litigation through multi-party action has become institutionalised in Britain. According to one study, innovation in this area has been ‘one of the remarkable features ofthe last decade'. Another study has noted that the emergence ofmulti-party litigation has been ‘truly remarkable'.13 What wasperceived as highly exceptional in the early 1980s had becomecommonplace by the end of the decade. Today, multi-partyactions are on the increase in Britain, often copying Americanprecedents. A group has been formed to sue the hamburgerchain, McDonald's, on the grounds that hot drinks served in therestaurant scalded them. Group actions have also been mountedagainst a number of employers, hospital trusts, local authorities,holiday and pharmaceutical companies and mobile phoneoperators. These actions may be numerically insignificant but theyhave a disproportionate significance: because of the publicity theyinevitably attract, large companies are tempted to settle cases outof court, thereby contributing to a culture in which ever moreclaims are likely to be brought.
An important recent change to the British legal culture has been the gradual relaxation of the traditional restrictions on theright of lawyers to advertise for clients. Since 1984, the LawSociety has loosened the rules on advertising, allowing lawyers tolook for clients. This development has allowed lawyers to recruitclients for multi-group action and has directly encouraged claims-making. Lawyers involved in environmental law and othercampaigning issues now advertise in order to increase the numberof claimants involved in particular cases.
Advertising has directly assisted the emergence of lawyer-led litigation. In numerous instances, it is a firm of solicitors thatidentifies a potential complaint, advertises for clients, encouragesthe setting up of action groups and mobilises support in the mediabefore launching a formal action. Many of the most high profilecases – such as the multi-party actions against British Nuclear Fuels,or Hoechst Marion Roussel (the suppliers of the contraceptive Negotiating Tragedy: Law and Disasters, Sweet and Maxwell, p.102 and C. Harlow & R. Rawlings, Pressure Through Law, Routledge, 1992, p. 152.
device Norplant) or manufacturers of MMR vaccines – are theproduct of a new innovative style of lawyer led litigation.
The growing climate of litigation is widely praised by legal activists who argue that it represents a redistribution of power tothe underdog. Ian Walker, president of the Association ofPersonal Injury Lawyers (APIL) argues that: What we have is a culture where access to the legal system is greaterthan it has ever been, through conditional fees…[we] have muchgreater knowledge in the public partly because of advertising andpartly because of media coverage.14 Many legal commentators, especially those involved in personal injury law, contest strongly the claim that there is a growingcompensation culture in Britain. Indeed, they often claim that theproblem is not too much but too little litigation. Many plaintifflawyers, and the related advocacy groups, are committed toexpanding the boundaries of claims-making.
They are committed to bringing about social reform through the mechanism of the courts – a rather inappropriate forum,many would feel – but they fail to acknowledge the broader socialeffect which their approach to the law is having.
The complicity of the judiciary in the litigation explosion is not restricted to the law of tort. Judges have been instrumental inleading individuals to see the courts as their first port of call acrossthe legal spectrum. The expansion of judicial review in the past 40years – by at least a hundredfold – is but one example of the legalfree-for-all which is now being witnessed.
Another import, this time from Europe, will also have a real effect on the levels of litigation. The incorporation of the EuropeanConvention on Human Rights into English law through the HumanRights Act 1998 means that, for the first time, individuals can testtheir rights in the English courts. The experiences of New Zealandand Canada after the introduction of similar "Bills of Rights" ‘Moving from legal restraint to compensation culture', Guardian, 17 October 1998.
suggest that the courts will find themselves drawn into examinationsof areas of the law which hitherto went unquestioned. Only the timeand expense of pursuing a case to the European Court of HumanRights in Strasbourg has kept the amount of litigation in this area ata limited level in Britain. Few in the legal community doubt(indeed, many hope) that the granting of the ability to pursue suchclaims – albeit only against public bodies – in the English courts willlead to a vast increase in such litigation. Furthermore, the lessons ofNew Zealand and Canada suggest that it will often be the leastdeserving who will benefit the most.
THE POLITICS OF CLAIMS - MAKING
WHO IS RESPONSIBLE for the growth of the culture ofcompensation? Paradoxically, virtually every important politicalinterest group has contributed directly or indirectly to itsdevelopment.
One of the unintended consequences of the last Government's emphasis on the Citizen's Charter was to concentrate the public'smind on seeking redress. The Citizen's Charter also encouragedother government departments to establish their own schemes forhandling complaints. Many reports on the impact of this initiativeidentify its contribution to the creation of a more assertive andcomplaining public.15 This formalisation of new consumer rights has stimulated individuals to make claims – financial and otherwise – oninstitutions that previously they accepted as imperfect. As Harlowand Rawlings predicted, even if it did not contain any specificrights to action, the Citizen's Charter is ‘likely to pushcomplainants towards the courts.'16 The Charter initiative did not set out to encourage litigation.
However, in the wider climate of complaint, new rights outlined ininitiatives like The Patient's Charter, The Victim's Charter or TheParent's Charter have tended to be interpreted as vehicles forgaining redress, often in the form of financial compensation.
Officials involved in the handling of complaints procedures have See T. Goriely & T. Williams, op. cit., pp. 17-18.
Harlow and Rawlings, 1992, p. 321.
alluded to the linkage between Charter awareness and claims-making activity.
Consumer advocacy groups have also been in the forefront of popularising the right of people to complain and to gain redressfrom private and public service providers. Organisations like theConsumer's Association and a bewildering variety of Advice Serviceshave played a useful role in educating the public about their rightsto seek redress. However, in recent years such organisations havealso transformed claims-making from being an individual issue to astrategy for influencing the British political agenda. Many legalactivists and consumer lobbyists now regard civil disputes as ameans of reforming society. Often driven by the motives of ‘socialjustice', lobbyists have helped contribute to a climate wherelitigation has become an instrument for changing specific policies.
For example, the APIL web-site boasts that it uses ‘the litigationprocess to expose unsafe practices' and it mounts campaignsdesigned to ‘put pressure on government for change'.
Some legal advocacy groups look to the civil justice system as a potential instrument for political reform. According to Roger Smith,director of the Legal Action Group (LAG), the provision of publicaccess to justice provides an alternative route to winning politicalinfluence. He claims that the decline of local government and oftrade unionism has ‘encouraged the resolution of more disputeswithin the legal and justice structure'. Calling for a widening role forlitigation, Smith advocates a more activist legal system: Culturally, we have tended to decry litigation and have sneered at ourcharacterisation of what we saw as writ-happy North Americans.
However, high litigation rates may well be a sign of an active citizenry,prepared to be vigilant as to their rights. Indeed, as economic andpolitical forces reduce the scope for democratic decision-taking, weshould expect rising levels of litigation. We should predict – andwelcome – greater use of our civil justice system.17 Justice: Redressing The Balance, Legal Action Group, 1997, pp. 9 & 10.
The conviction that the extension of the power of the courts represents a positive alternative to promoting change through thepolitical system underpins the outlook of litigation activists. Manyof the leading personal injury lawyers believe that privategrievances provide an effective vehicle for effecting legal andpolitical change.
It is not only lawyers who have promoted litigation as a cure for society's perceived ills. Trade unions – who in the 1990s have foundit difficult to promote their interests in the traditional language oftrade unionism – now often look to the courts to settle disputes.
Strategies centred on litigation have not only helped to improve theimage of unions; it also provided a language through which theirdemands could be formulated. Whereas industrial action is oftenperceived in negative terms, taking a boss to court is far more likelyto be accepted as a legitimate form of behaviour.
Finally it is worth noting that consumer lobbyist and legal activists no longer play the role of campaigning outsiders. Theyare regularly asked by government to provide representatives onnew statutory bodies, advisory committees and commissions thatdeal with legal and consumer-related issues. Consequently, theirinvolvement at the highest level of policy deliberation ensures thatthe scope for complaining and litigation continues to grow.
THE SPEED WITH WHICH the culture of compensation has engulfedBritish society means that it is difficult to be precise about itsimpact on everyday life. A culture of compensation first emergedin the United States in the late 1950s and continued to steadilyevolve until the late 1980s, when it evened out. In Britain, thenew culture of compensation emerged around 1984 and cameinto its own in the 1990s. In this relatively short period of time,Britain has nearly closed the litigation gap with the United States.
With the consolidation of the new legal culture in Britain, thistrend is likely to intensify.
There can be little doubt that the resources devoted to paying out compensation, and to covering the costs of litigation,represent a serious burden on society. The Legal Aid system isalready under heavy strain. In the financial year 1997/98, it madegross payments over £1.6 billion. It is worth noting that thepercentage of legal aid expenditure devoted to personal injurylitigation has been steadily expanding since 1981. It represented19.4% or £323.2 million during last financial year.18 The total overall cost of litigation to society is difficult to estimate since there are no reliable figures on the amount that the privatesector spends on compensation payments, legal fees, liabilityinsurance and on employing personnel who deal with claims.
However when one considers that in England and Wales, lawyers Despite government attempts to cut the legal aid bill, no real savings have yetbeen achieved.
earn almost £1 billion in gross fees on personal injury cases and thatthe cost to the justice system is around £1.8 billion, the scale of thisexpenditure becomes evident. At the most conservative estimates,the public sector spends around £1.8 billion on compensationpayments and the private sector around £1.2 billion.19 Public sector payments on compensation/litigation:* Private sector payments on compensation/litigation:† The lower public sector estimate includes expenditures by the NHS (£500million); the emergency services (£110 million); and local authorities(£1,190 million). The higher public sector figure also includes costsincurred by the Home Office (£200 million); the costs of administeringtribunals and courts (£700 million); and the cost of litigation insurance(£400 million).
The lower private sector figure is based on the sums paid out inprofessional negligence suits and in compensation payments; the higherfigure is an estimate derived from a sample of executives of legal feesand compensation claims.
The lower figure for legal costs is based on legal aid payments forpersonal injury cases; the upper figure includes the costs ofadministering tribunals and the system of justice for such cases.
Spending on insurance also represents a significant cost to society. During the past ten years, liability insurance hasaccounted for between 11% and 13% of the overall insurancemarket. At Lloyd's in 1998, professional indemnity cover alonetotalled £328 million.
_ 19 Compensation and insurance fees paid out in work related accidents areomitted from the calculation. According to the Health and Safety Executive,accidents and work-related ill-health currently cost the British economybetween £6 billion and £12 billion a year. A significant proportion of this figureis accounted for by compensation and insurance payments.
Allowing for double counting, the culture of litigation costs society at least £3.3 billion and possibly as much as £6.8 billion.
These totals do not include the costs of insurance premiums paidon liability insurance and the costs incurred in the private sectoron litigation insurance.
Specific examples can illustrate how spending on litigation can damage the public's interest. The litigation bill for obstetrics was£264 million during the years 1995 to 1998. The cost ofemploying 250 consultants necessary for the efficient managementof obstetrics in England and Wales costs only £15 million a year.
The annual running cost of an inner city Accident and EmergencyUnit is around £1.5 million. An in-patient hip operation costsbetween £3,000 and £4,000.
Considerable sums of money are also paid out in the form of compensation to victims of crime. During the financial year1996/97, the Criminal Injuries Board paid out more than £1.9billion in compensation. This figure represents an almost fourfoldincrease in the amount paid out by the criminal injuries board adecade previously.
Not surprisingly, the growth of a culture of compensation has been paralleled by the growth of the legal profession. The numberof barristers has increased from 4,263 in 1978 to 9,698 in 1998.
During this period, solicitors with practising certificates inEngland and Wales have increased from 33,864 to 75,072. Thenumber of law graduates is also growing, from 4,834 in 1987 to8,892 in 1997. The legal industry has become big business. In1997/98 the total turnover in legal business in England and Waleswas around £8 billion representing nearly 1.3% of the GrossDomestic Product of England and Wales.20 Not surprisingly,growth in solicitors' total income consistently outstripped thegrowth in the total income of the economy.
In comparison, this sum is the equivalent of the total annual expenditure bybusiness on computers.
The economic impact of litigation cannot be reduced to the language of figures. Public and private sector organisations havebeen forced to reorganise around litigation avoidance. Largeorganisations like Shell, the Post Office and W.H. Smith areemploying stress counsellors, in order to protect themselves fromstress-related litigation from their employees. Company officialshave indicated that contesting claims often force them to use thevaluable time of their best people; those who would otherwise bein the forefront of the management of their organisation. Evensmall general medical practices are devoting time and energy to‘cover their backs' by doing more paper work and by maintainingnew complaints procedures.
Those who claim that litigation forces organisations to become more effective and more responsive to consumer interests oftenoverlook the negative consequences of the litigation avoidancestrategies adopted by management. The demands oforganisational responsibility have little to with the strategy oflitigation avoidance. Litigation avoidance can lead to a defensiveposture, where both the efficiency of the organisation and theinterests of society become subject to irrational constraints.
The problem of defensive medicine is now widely recognised and has been much discussed. There is now disturbing evidencethat the culture of compensation helps to create a climate wherebydoctors have become concerned not only with clinical outcomesbut also with also the threat of potential litigation. This may affecttheir prescribing practice; alternatively it may cause them toemploy or avoid certain procedures as part of a litigationavoidance strategy. Surveys have indicated that doctors areincreasingly using practices which they consider to be unnecessarybut which protects them from the threat of a suit.21 Defensive corporate and public sector activity is no less important. When a local authority closes down a playing area See E. Annandale, ‘Professional Defences: Medical Students' Perceptions ofMalpractice', International Journal of Health Services, vol. 26, no. 4, pp. 764-65.
because it fears that an accident to a child may lead to litigation, itacts no less defensively than a doctor who, with an eye to apotential law suit, avoids a medical procedure which he or shebelieves is in the best interest of the patient.
The threat of litigation, and the publicity associated with it, is a deterrent to product innovation and experimentation. AlthoughHoechst Marion Roussel has successfully seen off a multi-partyaction that claimed that one of its contraceptive devices, Norplant,was unsafe, media publicity of the case helped to destroy publicconfidence in the product. Other pharmaceutical companies havealso been scared off by concerns over negative publicity and areholding back from the market much needed contraceptivetechnology. Sadly, the social and economic interests of societyhave become distorted by the demands of litigation avoidance.
The distortions forced on organisational life by the threat of litigation can actually undermine good practice. In the universitysector, academics have been told not to charge students withplagiarising their work on the ground that the institution might besued. In some cases, administrators would prefer universityteachers pretended that cheating did not exist rather than face apotential legal wrangle.
Litigation avoidance can lead to an absurd waste of resources.
The threat of litigation has forced manufacturers to go intoextraordinary detail about the potential hazards and side-effects oftheir products. Anyone reading the numerous warnings containedin product information leaflets can be excused for becominganxious about using the product. Companies feel that they mustcover their backs even if they overstate the risks facing theconsumer. Paradoxically, such leaflets will do little to reassure theconsumer. To warn of everything is to degrade the meaning of awarning. Warning has become an empty ritual, when theadvertisement for every financial product concludes with thephrase ‘your investment can go down as well as up'. Financialcompanies can claim that they have responded to the demands of a litigious climate but it is unlikely that this warning has sparedany individual from financial loss.
The consequences of the culture of compensation go beyond its impact on large organisations. They have a direct influence oneveryday life. Local councils face hundreds of cases involvingaccidents caused to children in playgrounds and otherrecreational areas. This is why gradually British parks havebecome denuded of big, fast moving roundabouts and heavyrocking horses. Fixed goal posts have been removed from schoolplaygrounds. Witches Hats and the plank swing have beenbanished. Newly-installed roundabouts are smaller and slowerthan previously and the swings are shorter. Some local councilsare so worried that they might be sued by parents of childreninjured ‘conkering', that they have implemented a policy of ‘treemanagement' to make horse-chestnut trees less accessible tochildren. Diminishing the childhood experience of playing is oneadverse outcome of the institutionalisation of litigation avoidance.
It is not just parks that are affected. Sports organisations, Boy Scouts, Girl Guides and outdoor schemes in general must subjecttheir activities to the dictates of litigation avoidance. Children'saccidents that were formerly understood to be an inevitable partof growing up are now seen through the prism of litigation. Therestriction on children's outdoor activity has predictableconsequences for their development. Numerous reports onchildren's health have warned about the negative consequences oftheir sedentary lives. Legal activists who proclaim the virtues oflitigation seldom pause to reflect on the impact of the culture ofcompensation on the experience of childhood.
GENERAL EXPERIENCE SUGGESTS that the rise of litigation is anexpression of a decline in trust and that this, in turn, breedssuspicion between people, and between individuals andinstitutions. Trust in authority and the extension of law exist in aninverse relationship. Although individuals have complex motivesfor complaining, it is the atmosphere of mistrust that leads to thesearch for legal solutions. People who litigate are demonstratingtheir mistrust of their doctor, teacher, referee or nursery worker.
The trends towards legal activism and towards the culture of compensation reflect fundamental changes in the relationshipbetween the individual and society. More specifically, thetendency towards individualisation has led to a situation whereprivate grievances are less mediated through legitimateinstitutions – such as the Church or respected local figures – thanin the past. One of the most striking developments in Britishsociety has been the decline of institutions whose authorityremains unquestioned.
The lack of trust in the professions has been widely commented on. The erosion in professional authority has opened the way forclaim making. Even fundamental institutions, such as the churchand the education system, face a barrage of complaints and lawsuits. This weakening of authority has encouraged the demand forlegal intervention. Ambiguities about authority coexist withuncertainties about family life and interpersonal relationships.
Lack of clarity about personal conduct has encouraged thetendency to formalise personal relationships. British institutions – business, education, the public sector, the church, and the military– are busy producing codes of conducts and establishingcomplaints procedures.
Ironically, the very attempt to formalise human relations and to codify appropriate forms of behaviour actually feeds mistrust. Itdisposes people to regard each other and those in ‘authority' withsuspicion, and leads to the anticipation of negative outcomes.
When people do not believe that others could take their intereststo heart, making claims can become a sensible substitute fordialogue. There are people who now keep written records ofgrievances or the discomfort caused by their neighbours, inpreparation for some possible future claim in court.
The corollary of the formalisation of personal relations is the growing sense of personal injury. Lack of clarity about what is‘appropriate' behaviour helps to stimulate misunderstanding andconflict. People are no longer just slighted or badly treated. In anera where personal conduct has been formalised the aggrievedperson becomes injured, offended, victimised, traumatised,damaged and abused. Each of these states of mind constitutes apotential entitlement for compensation. A profound sense of injuryis characteristic of people who live in the shadow of the rule book.22 It used to be the case that people went to court as a last resort to sue those whose word they could not trust. It was theimpossibility of working out a mutually satisfactory solution thatinvited third part intervention. The fact that today litigation hasbecome more routine suggests that there are very few people whowe are prepared to trust. Even relatives and close family memberscan now become a target of a law suit. People, who believe thattheir health was damaged in childhood by passive smoking, havebegun to take legal advice about suing their parents. In October1997, Patrick MacDonald, a law student sued his mother for £400a month living costs. A few days later it was reported that two These points are further developed in F. Furedi, Culture of Fear: Risk Takingand the Morality of Low Expectations, 1997, Cassell.
other students had won legal aid to sue their parents for financialsupport. At the time, a spokesman for the Catholic Church inScotland expressed dismay at these cases and stated that childrentaking their parents to court was ‘materialism gone stark ravingmad'. However, cases such as this do not represent the rise ofmaterialism so much as the growing acceptance of legalintervention in the conduct of human relations.
The extension of law into new areas of everyday life reinforces the erosion of trust relations. It sharpens every dispute anddifference, whether between neighbours or between a doctor andpatient. It also continually invites new disputes and conflicts. Aconflict over who has the best claim for compensation often leads tosordid disputes between different claim-makers. Wrangles over thedistribution of money after the tragedy at the Dunblane shootingsillustrates the degrading consequences of compensation culture.
In November 1996, a dispute broke out between the Dunblane Snowdrop Petition campaigners, a community group establishedfollowing the tragic massacre of several young school children andone of their teachers, and members of the emergency servicesabout who would get how much. Ann Pearston, head of thecampaign, stated that she was worried about police personnelsuing over trauma. As she stated: I am concerned that the dividing line between compensation soughtby emergency services and that awarded to members of thecommunity may cause resentment.
Disputes over the distribution of donations erupted again in May 1998, when parents of injured children accused the trusteesof the multi-million pound fund of spending money on memorialprojects at the expense of the needs of the surviving pupils. Thesedisputes continue to this day. In February 1999, several parentsattacked the trustees for giving more money to people with stressthan to their children who were still suffering physically. They alsoinsisted that less money should have been spent on memorialprojects and more on children. That the sense of community built around this terrible tragedy could so easily give way to conflictabout the distribution of money illustrates the corrosive impact ofcompensation culture.
The experience of Dunblane is by no means unique. In the aftermath of the Hillsborough tragedy, when 96 victims werecrushed to death, members of bereaved families expressed bitterwords against the police and other emergency personnel whowere claiming compensation for the trauma they suffered duringthe course of carrying out their duties. The relative of one victim,who was in the middle of fighting for compensation was bitterwhen she heard that several police officers were successful withtheir claim. Mrs Anne Williams was reported as stating that shewas ‘disgusted'. ‘My son died because they lost control, yet nowthey are getting compensation', she added.
The claim by legal activists, that litigation empowers individuals, is directly refuted by the British experience. In aclimate of mistrust, a culture of compensation reinforces thetendency towards suspicion and conflict. By continually invitingthird-party intervention, rights-claiming individuals becomedependent on their professional advisers. Individuals become less,and not better, able to sort out their problems. Insofar as there isany empowerment, it is the giver of professional advice, themediator and the lawyer who reap the benefits.
THE MOST NEGATIVE CONSEQUENCE of compensation culture isnot the amount of money paid out on frivolous cases. It is theextension of formalised liability into areas that were hithertoconsidered to be the domain of personal responsibility. Thisextension of liability has led to the construction of a bewilderingvariety of new injuries, which in turn have served to alter thetraditional relationship between individual action andresponsibility. It contributes towards relieving the burden ofresponsibility from the individual by reinterpreting misfortune asby definition the responsibility of others.
Advocacy groups, consumers' organisations and legal activists are in the forefront of promoting the idea that there is no suchthing as an accident for which you automatically bearresponsibility. A leaflet published by Accident Line, anorganisation launched to raise public awareness by the LawSociety, directly encourages people to look for someone to blamefor their predicament: IT WAS JUST AN ACCIDENT.OR WAS IT?
Even if you believe that your injury was just an accident, and that no-one was to blame, it's still worth talking to a specialist solicitor. Manypeople who believed at first that their accident could not be blamed onanyone but themselves have gone on to make a successful claim.
The leaflet assures the reader that ‘sometimes you don't even realise that someone or something else is to blame'. Educatingpeople to discover that what they thought was their fault can actually be blamed on someone else seems to be the centralmission of the new complaints industry. Encouraging blaming andcomplaining is increasingly presented as a service to the public.
And the litigant is frequently depicted as an active citizen standingup for his or her rights.
Blaming involves externalising problems to sources outside the self. Today, even one's state of mind can be causally linked toactions precipitated by an external source. It merely requires thatone's mental state is defined as a psychiatric illness and that thiscondition be attributed to another party's negligence. Since themeaning of psychiatric injury is continually expanded toincorporate a growing variety of unpleasant emotionalexperiences, the foundation for claims-making continues to grow.
Hitherto, unexceptional human reactions, like the pain and trauma experienced by parents when the child they love dies cannow be recast as a psychiatric illness for which a ‘negligent'hospital can be held responsible.23 No doubt, hospitals and otherlarge institutions can be insensitive in their handling of thebereaved. But to hold them responsible for the ‘abnormal griefreaction' of the bereaved is to lose sight of the complex influencesthat shapes the reaction of the self. And if even the intense painwe feel over the loss of a child is the consequence of someoneelse's negligence, are there any feelings left for which we bear ameasure of existential responsibility? The causes of a particular mental condition are complex and can rarely be reduced to a single event.24 Unfortunately, blame-seekingis intolerant of complexity and believes that one's state of mind canbe directly attributed to an external agent's negligence. It is also _ 23 A recent report by the Law Commission takes a very different view on thismatter. It described a court decision, which dismissed the claim for damagesfor ‘abnormal grief reaction' as ‘harsh' and ‘arbitrary'. See Law Commission,1998, op. cit., p.35.
See a useful exploration of this subject in M. Hotopf, and S. Wessely, ‘Stress inthe Workplace: Unfinished Business', Journal of Psychosomatic Research, 1997,vol. 43, no. 1, p. 2.
increasingly acceptable to blame one's state of mind on thenegligent act of others 10, 15, 20 years ago. While the developmentof a compensation culture is a recent phenomenon, it hasencouraged many people to revisit past grievances and make themthe subject of new claims. It has become fashionable for Britishadults to sue their schools, foster homes and other institutions forthe trauma they suffered during childhood. Schools are being suedby former pupils who claim that they were bullied as far back as 15years ago. Some former students who have done poorly in theirexams are claiming that their school has let them down and thatthey are therefore entitled to compensation.
It is not just lazy students who have jumped on this bandwagon. Soldiers, policemen and policewomen and otheremergency workers are now demanding compensation forincidents that were previously considered a normal part of theirduties. An ex-soldier, who saw a friend killed by an IRA land mine15 years ago, has sued the Ministry of Defence. He claims to besuffering from post-traumatic disorder and holds the Armyresponsible for his failure to hold down a job and the break-up ofhis long-term relationship. It appears that failure in life hasbecome a reason for compensation.
The tendency to blame others for one's predicament represents a profoundly disturbing statement about the waysociety regards the potential that human beings have forcontrolling their lives. It assumes that most of the time people arepassive, pathetic creatures unable to make real choices and whotherefore should not be expected to be responsible for theiractions. From this perspective, suffering and injury are most likelyto be presented as the fault of others. The culture ofcompensation encourages people to inflate these injuries and topresent every traumatic experience as a ‘life sentence'. It appearsthat people are so influenced by the negligent actions of othersthat they become ‘scarred for life' and can rarely recover fromtheir traumatic experience. Such a debased conception of thehuman potential informs the proceedings in the culture of compensation. Once the question, ‘how can I be expected to bearresponsibility for what has happened to me?' becomes a naturalresponse, then very little remains of any notion of the self-determining individual.
This institutionalisation of irresponsibility was well illustrated by a High Court judgement in September 1995 which held LloydsBank liable for the failure of two of their customers to repay theirloan. Julia Verity and Richard Spindler sued Lloyds for £500,000after being lent £150,000 in 1988 to buy a house that theyintended to renovate and sell at a profit shortly before the collapseof the market. Instead of making a profit, the couple fell into debt.
The judge ruled that Lloyds did not exercise reasonable care inadvising the plaintiffs and that therefore they were responsible forthe couple's predicament and ordered to pay £77,000compensation. From the perspective of this ruling, individuals arenot expected to be able to act according to their interests andnegotiate a commercial transaction. Extending the liability of abank for a customer's speculative activity may seem like a blowagainst an unpopular financial institution. However, it also affirmsthe notion that ordinary people cannot think for themselves andact in their own best interest.
There is nothing objectionable about complaining or blaming as such. In British society there are many issues and problems tocomplain about and all too many targets of worthwhile blame.
Blaming only becomes a problem when the self becomes denudedof any sense of responsibility for one's predicament. We all live incircumstances over which we can exercise little control. But if werenounce the possibility of having some choice over the directionof our life then we diminish the meaning of our humanity.
The advocates of compensation culture always present complaining and blaming as the defiant acts of the active citizen. Nodoubt, in certain circumstances pointing the finger represents an actof bravery. But too often today, blaming offers a popularlysanctioned excuse from tackling the consequences for one's action.
Human beings do not need professionals to encourage them to blame. Experience has shown that most of us are all too ready tohold others responsible for the consequences of our action. Sadly,this very human instinct is now promoted as prime virtue.
Therapists continually seek to assure their patients with the words‘don't blame yourself'. The same tune is played by a bewilderingvariety of professionals who believe that salvation lies intranscending any notion of individual responsibility. In a societywhere complaining and blaming has been transformed into aculturally acceptable mode of behaviour, it invariably representspassivity and dependence rather then the defiant act of an activecitizen. And sadly, for many of us complaining has proved to be anirresistible alternative for sorting things out for ourselves.
THE CULTURE OF COMPENSATION'S greatest accomplice has been alack of public understanding. The lack of information in thepublic domain has impeded any sort of proper debate aboutwhether we are prepared to bear the costs of this development,and our willingness to place more and more facets of our lives intothe straitjacket of legal relations. The public needs to be properlyinformed.
The problem has its roots in many factors – cultural, political, judicial, legal – and is therefore not amenable to simple solutions.
In many cases, compensation remains entirely proper andnecessary: corporate negligence and irresponsibility is bestpunished through the courts. However, if it is accepted that theculture of compensation has gone too far, it is necessary to takeaction which will, at the very least, inhibit its further growth. Thefollowing proposals are not intended to be a comprehensivesolution to the problem – but they may serve as a starting-point.
Transparency in the public sector
The problem is perhaps particularly pressing in the public sector,
since the billions of pounds now spent on litigation come out of
the taxpayer's pocket and effectively reduce the resources
available for the public services. Little or no information relating
to the amounts being spent, and the responsibility of those bodies
whose (negligent) actions cause that expenditure, ever reaches the
Transparency will help to identify the scale of the problem.
The Audit Commission should therefore compile and publishleague tables which state, for every public sector organisation: the number of claims made against that organisation; the number of claims settled out of court and the amountspaid in compensation; the number of claims resolved in court and thecompensation paid; the legal costs incurred in settling compensation claims.
These figures should be easily obtainable and would be an invaluable contribution to our understanding of the problem.
Could the publication of this data encourage a more responsible attitude onthe part of both the litigant and the public sector? Psychological injury
Psychological harm – one of the areas of greatest litigation growth
– needs re-examination. Although the courts have tried to curb
attempts to expand definitions of psychiatric injury, there is
considerable social pressure to compensate claims for new forms
of alleged psychiatric harm. There has also been an exponential
growth in the number of professional medical expert witnesses
who support such claims. The phenomenon of the full time expert
witness, who is no longer involved in practising medicine, and
who is nevertheless seen to provide authoritative statements on
claims which are medically disputed, raises important questions.
Should Parliament pronounce on the issue and confine the definition of
psychological injury to medically recognised damage to the nervous system?
And should we seek to curb the practice of using professional expert
witnesses and rely instead on medical consensus arrived at through the
process of peer review?
The role of the courts
Much of the burden for righting these wrongs must lie with the
courts. People in general, and perhaps especially businesses taking
commercial risks, need to know the extent of their responsibilityand liability.
The plight of many victims of harm leads to a natural predisposition towards them, but the wider social costs should alsobe considered. A change of judicial attitudes cannot, of course,realistically be achieved by edict, particularly in an area dominatedby common law rather than statute, and where change hasoccurred by virtue of ever more generous interpretation ratherthan major shifts in the law itself. Could guidance from the LordChancellor or the Lord Chief Justice that judges should explicitly considerthe social impact when making awards reverse the trend? Setting a ‘cap' on compensation claims
In employment law, the upper limit that a plaintiff can claim for
unfair dismissal has been set by Act of Parliament. Should Parliament
define the upper limits for all other categories of compensation claims?
One way of spiking unmeritorious claims would be closely to
examine the issue of contributory negligence. This legal device
permits a finding that the plaintiff has been 10%, 20%, or 30% to
blame for the harm caused, and the award is reduced accordingly.
As well as contributing to the culture of compensation, it has led to
a diminution of the allocation of responsibility for faults. The
absurdity of attempting to place a precise figure on relative
culpability, the nonsense of trying to turn a subjective judgement
into a supposedly definitive quantification of responsibility, must
call into question the logic of this device. Should a plaintiff who is
largely responsible for his own loss be allowed to claim at all? Should the
issue of responsibility for harm be seen in black and white?
Companies are often seen as easy targets for aggressive litigators
and lawyers. All too often they find themselves faced with
speculative actions which – because of their sensitivity to the threat
of poor publicity – they are under pressure to settle. Whileirresponsible and wrongdoing companies need to be held toaccount for their actions, spurious claims must be discouraged.
Can any legal mechanisms be introduced which will deter litigants fromtaking unfair advantage of the system? Insurance
Historically, tort law has served as a means of allocating
responsibility for damages and as an instrument for compensating
the harms suffered by the injured.25 But as an instrument of
compensation, tort law is both arbitrary and inefficient. A public
debate is needed to consider what is the best way of compensating
those who have been genuinely injured. Recently Cherie Blair
provoked controversy when in her capacity as a QC, she argued
that there are:
…good policy arguments why injuries which arise out of the failure ofsocial welfare rights, such as the right to education, are notsatisfactorily resolved by the award of damages many years later in acourt of law, especially when those damages simply deplete an alreadyover-stretched education budget.26Separating the question of compensation in the public sector from tort law would seem to deal with the dilemma posed byCherie Blair. Consideration could be given to a scheme of no-faultliability that transfers the function of compensation to a system ofinsurance run either by the state or by the private sector. Since therise in medical litigation, the British Medical Association and theAction for Victims of Medical Accidents group have argued for ano-fault approach.
However, care must be taken when considering such a move.
The dangers of encouraging irresponsibility when insurers willcover all costs must be a primary worry, as must the possibility _25 For a discussion of these principles, see P. Cane, The Anatomy of Tort Law, HartPublishing, 1997.
Daily Telegraph, 28 January 1999.
that it could turn out to be more expensive than the existingsystem of fault-based liability. Moreover, such a system may not beas simple as it might seem: while the issue of fault would be takenout of the equation, difficult problems of causation would stillhave to be dealt with. Is an arguably fairer system worth these risks, orwould it create more problems than it would solve? The other side of the coin: the social factors
To some extent, the culture of compensation is a symptom of even
wider social trends: the widespread loss of religious faith, the
erosion of a sense of community, the apparent decline in respect
for authority, the shift in relations of trust have been mirrored by
the growth of "me against the world" attitudes. These cannot be
the subject of legislation. Easy answers are not to be found in an
area where social factors play a huge role. Changes to the law
cannot reverse a trend which is now running deeply through
British society. But can a wider public debate lead, imperceptibly, to the
change in attitudes which is necessary if the culture of compensation is not
to undermine many of our traditional freedoms?
A P P E N D I X A
CLAIMS UNDER THE TORT SYSTEM are non-contractual claims of acivil nature that arise from the duties and obligations placed uponus by society. In tort, we all owe each other a duty of caredepending upon the principles of proximity and foreseeability.
That is, each of us owes a duty of care to those with whom we havea proximate legal relationship – such as that between a doctor andhis or her patient – and where it is reasonably foreseeable that aperson could be harmed by our negligent action.
These legal definitions are empty vessels into which a different social meaning is poured in different periods. So, for example, in1925, a manufacturer did not owe a duty of care to the end-pointconsumer of his goods, whereas in 1999 manufacturers are undersuch a duty as a result of Donoghue v. Stephenson (1932) and byreference to modern consumer protection legislation.
The focus of our study has been claims under the tort system, with a particular focus on the tort of negligence.
The tort of negligence has been, in the past, a system of accident compensation based on fault liability. However, fault liability haslittle meaning when virtually everyone can be found at fault.
Doctors were found negligent in the High Court in February 1999,for failing to diagnose smear test abnormalities in three women,despite the judge's acceptance that there was only a 50-50 chance ofdetecting such abnormalities. Referees in sports matches have beenfound negligent for failing to stop a game despite widespreadacknowledgement that it is impossible to predict a moment when aserious injury may occur. It appears that the legal system seems A P P E N D I X A
unable to resist social developments that lead to an extension offault liability to a growing number of experiences.
Negligence used to embody a doctrine of personal responsibility on the parts of both defendant and plaintiff. Inrecent years, however, we have witnessed the incredible expansionof the ambit of personal responsibility for the defendant, and itsconcomitant decline for the plaintiff, as issues of responsibility andblame have become more plaintiff-friendly.
The compensation culture that we are investigating is not restricted to claims under the tort of negligence. Throughexploring the extension of fault, we have observed thatcompensation culture extends to growth in quasi-legal claims,growth of arbitration and administrative tribunals as against courthearings, and increasing off-the-record activity. In all of theseareas, which have been termed the ‘Shadow Legal World', theextension of fault liability meets with fewer challenges than it doesin the courts, and it is therefore here that we see thestrengthening roots of a litigation crisis.
CONSERVATIVISM, DEMOCRACY & NATIONAL IDENTITY
Languishing in Britain and, indeed, across Europe, the right seems to beunsure of its relevance to current political debate. But Conservatism comesinto its own when there is a sense that existing institutions and beliefs areunder threat. There is a latent threat which may give rise to a revival of theconservative spirit: the gradual and insidious undermining of democracyby numerous agencies – the EU, the courts, bureaucrats – and by variousideologies – most particularly multiculturalism. These areas will be the newbattleground for the right. The fight to defend democracy is now thecrucial battle for all conservatives.
…a brilliant lecture – Michael Gove, The Times David SelbourneToo many participants in ethical debates misrepresent the issues before us,or avoid responsibility for their own conduct, or discredit by use offalsehood those whose arguments they disapprove. At one extreme, it issaid that nothing can any longer be done about our moral condition. Or, atanother extreme, that nothing needs to be done about it, since there isnothing fundamentally at fault in our moral condition in the first place. Butquestions about ‘the moral order' deserve to stand at the centre of publicand political controversy in the coming period. They must not, as they alltoo often are, be evaded.
…an excellent pamphlet – Stephen Glover, The Spectator A SUBSCRIPTION TO THE CENTRE
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ASSOCIATION CASA ALIANZA SUISSE Rapport d'activités 2003 Construisons un autre avenir pour les enfants de la rue Compte rendu de l'année 2003 Préface par Madame Micheline Calmy-Rey Activités en 2003 Evènements et Médias Recherche de fonds Dans un monde où les principes humanitaires Défense des droits de l'enfant
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