Ridiculous compensation claiming

W1

rjsterry wrote:

W1 wrote:

...

If we want to go the way of the US - where everyone sues everyone, for everything, then fine, it's us who pay for it at the end of the day. Or it means that, due to insurance costs, ridiculous restrictions or bans are put in place, events cancelled etc etc, all due to the perceived threat of litigation. And that's rather pathetic, and is due to cowboy lawyers and greedy vexatious claimants rather than any actual threat or risk.

Do they though? It's always taken as read that this is the case, but I wonder if anyone has anything to back it up, or whether it's just another little story we tell ourselves to make us feel superior. With a population of 307 million, many of which are extremely poor, I doubt that many people - as a proportion - are actually making exaggerated and unnecessary claims. Ditto in this country; the few claims that are made tend to make the news, whereas the majority of reasonable claims don't skewing our perception - although that perception has probably led to over-cautiousness.

Have you been there? The no-win no-fee lawyers are even more evident than our lot. And you don't need to be rich (at all) to engage one of them. Maybe as a proportion we're now much the same.

What can't be in doubt is that the bill for compensation claims is growing, and that (in part) is due to increased awareness of "blame/claim". I had two text messages last week (unsolicited) effectively telling me I'm due £3000 for my accident. I haven't had an accident.... The ability to claim compensation is the driver of criminals who stage car accidents too. Again, we all pay for this. That is compensation culture.

rjsterry

No, I've not been there, but I'm not sure how taking a holiday would prove anything. I'm not sure the text messages prove much - I'm sure we've all had spam emails promising us investment opportunities, bigger muscles, a bigger kn0b but I've yet to take any of them seriously. Do you have any statistical evidence showing a rise in claims or better still, a rise in failed claims?

The idea of litigation being more widely available, rather than the preserve of the rich is not a bad thing either - why should only wealthy people be able to seek redress for damage to property or personal injury. This is bound to lead to an increase in claims, and if that means that all my insurance premiums are higher, then so be it. A quick calculation shows that as a family, I probably spend about 2-3% of gross earnings on insurance, so if that becomes 2.5-3.5% it's not going to fundamentally change anything.

bigmat

W1 wrote:

rjsterry wrote:

W1 wrote:

...

If we want to go the way of the US - where everyone sues everyone, for everything, then fine, it's us who pay for it at the end of the day. Or it means that, due to insurance costs, ridiculous restrictions or bans are put in place, events cancelled etc etc, all due to the perceived threat of litigation. And that's rather pathetic, and is due to cowboy lawyers and greedy vexatious claimants rather than any actual threat or risk.

Do they though? It's always taken as read that this is the case, but I wonder if anyone has anything to back it up, or whether it's just another little story we tell ourselves to make us feel superior. With a population of 307 million, many of which are extremely poor, I doubt that many people - as a proportion - are actually making exaggerated and unnecessary claims. Ditto in this country; the few claims that are made tend to make the news, whereas the majority of reasonable claims don't skewing our perception - although that perception has probably led to over-cautiousness.

Have you been there? The no-win no-fee lawyers are even more evident than our lot. And you don't need to be rich (at all) to engage one of them. Maybe as a proportion we're now much the same.

What can't be in doubt is that the bill for compensation claims is growing, and that (in part) is due to increased awareness of "blame/claim". I had two text messages last week (unsolicited) effectively telling me I'm due £3000 for my accident. I haven't had an accident.... The ability to claim compensation is the driver of criminals who stage car accidents too. Again, we all pay for this. That is compensation culture.

Actually, that's fraud. If there's a distinction between "compensation" and "compensation culture", then there's similarly a distinction between "compensation culture" and "fraud". So let's say that "compensation" covers reasonable claims. "Compensation culture" covers claims that most people would consider to be spurious, inflated or otherwise lacking in merit, and "fraud" covers anything that is breaking the law. I'm not convinced there's a huge amount of statistical evidence backing up the suggestion that "compensation culture" is on the rise. It therefore can "be in doubt" that the bill for compensation claims is growing (although there may be evidence to confirm this - I'd be interested to see it).

W1

BigMat wrote:

Actually, that's fraud. If there's a distinction between "compensation" and "compensation culture", then there's similarly a distinction between "compensation culture" and "fraud". So let's say that "compensation" covers reasonable claims. "Compensation culture" covers claims that most people would consider to be spurious, inflated or otherwise lacking in merit, and "fraud" covers anything that is breaking the law. I'm not convinced there's a huge amount of statistical evidence backing up the suggestion that "compensation culture" is on the rise. It therefore can "be in doubt" that the bill for compensation claims is growing (although there may be evidence to confirm this - I'd be interested to see it).

I don't see the distinction between spurious, inflated claims and fraudulent ones.

You only need to look at increasing car insurance premiums to see the impact of both increasing PI claims and the use of "claims management firms" and ambulance chasers.

http://www.guardian.co.uk/money/2010/ja ... costs-rise

W1

rjsterry wrote:

The idea of litigation being more widely available, rather than the preserve of the rich is not a bad thing either - why should only wealthy people be able to seek redress for damage to property or personal injury. This is bound to lead to an increase in claims, and if that means that all my insurance premiums are higher, then so be it. A quick calculation shows that as a family, I probably spend about 2-3% of gross earnings on insurance, so if that becomes 2.5-3.5% it's not going to fundamentally change anything.

If litigation is risk free to the claimant (i.e. no win, no fee), then obviously this encourages spurious claims (because you may as well "have a go" as you have nothing to lose). Due to legal and investigative costs, these claims are often cheaper to settle than to defend, even if a significant number of them have no merit at all. In other words, people are cottoning on to the fact that for zero risk to them, and with absolutely no requirement to actually prove anything, they can get a couple of grand which they may well not be entitled to. And that is paid for by you and I. That's to say nothing of those who deliberately cause accidents. And that is encouraged by the ambulance chasers.

If you're happy about that, then so be it. I'm not. And the knock-on effect is that there is a risk that people are put off organising anything, due to the risk of being sued. And that's what causes the Daily Mail to go mad about conkers being banned and pancake races being cancelled.

bigmat

W1 wrote:

BigMat wrote:

Actually, that's fraud. If there's a distinction between "compensation" and "compensation culture", then there's similarly a distinction between "compensation culture" and "fraud". So let's say that "compensation" covers reasonable claims. "Compensation culture" covers claims that most people would consider to be spurious, inflated or otherwise lacking in merit, and "fraud" covers anything that is breaking the law. I'm not convinced there's a huge amount of statistical evidence backing up the suggestion that "compensation culture" is on the rise. It therefore can "be in doubt" that the bill for compensation claims is growing (although there may be evidence to confirm this - I'd be interested to see it).

I don't see the distinction between spurious, inflated claims and fraudulent ones.

You only need to look at increasing car insurance premiums to see the impact of both increasing PI claims and the use of "claims management firms" and ambulance chasers.

http://www.guardian.co.uk/money/2010/ja ... costs-rise

I think the distinction is that in a lot of cases, whether a claim is spurious or inflated is subjective - in this case, Mr Spektor may actually have believed he was entitled to claim £1 million (or whatever the figure claimed actually was). For me, that is distinct from fraudulent claims where the whole thing is manufactured. I can see that the claims farmers may have caused an increase in dodgy claims, but the general access to justice resulting from conditional fee agreements has probably also enabled a lot of people to recover the compensation that they are properly entitled to.

The rise in insurance premia is probably as much a result of a hardening market than any spike in claims activity, although obviously fraudulent activity isn't doing any of us any favours.

rjsterry

W1 wrote:

rjsterry wrote:

The idea of litigation being more widely available, rather than the preserve of the rich is not a bad thing either - why should only wealthy people be able to seek redress for damage to property or personal injury. This is bound to lead to an increase in claims, and if that means that all my insurance premiums are higher, then so be it. A quick calculation shows that as a family, I probably spend about 2-3% of gross earnings on insurance, so if that becomes 2.5-3.5% it's not going to fundamentally change anything.

If litigation is risk free to the claimant (i.e. no win, no fee), then obviously this encourages spurious claims (because you may as well "have a go" as you have nothing to lose). Due to legal and investigative costs, these claims are often cheaper to settle than to defend, even if a significant number of them have no merit at all. In other words, people are cottoning on to the fact that for zero risk to them, and with absolutely no requirement to actually prove anything, they can get a couple of grand which they may well not be entitled to. And that is paid for by you and I. That's to say nothing of those who deliberately cause accidents. And that is encouraged by the ambulance chasers.

If you're happy about that, then so be it. I'm not. And the knock-on effect is that there is a risk that people are put off organising anything, due to the risk of being sued. And that's what causes the Daily Mail to go mad about conkers being banned and pancake races being cancelled.

Bobbins! Every time I've had to claim for anything on my insurance, I've had to provide some evidence of the loss/cost of replacement. Having seen something from the receiving end of one case of a fairly weak claim - the insurance companies response could be summed up as 'get stuffed' - I don't think they do just roll over and pay out unless the sum being claimed is very small.

W1

BigMat wrote:

I think the distinction is that in a lot of cases, whether a claim is spurious or inflated is subjective - in this case, Mr Spektor may actually have believed he was entitled to claim £1 million (or whatever the figure claimed actually was). For me, that is distinct from fraudulent claims where the whole thing is manufactured. I can see that the claims farmers may have caused an increase in dodgy claims, but the general access to justice resulting from conditional fee agreements has probably also enabled a lot of people to recover the compensation that they are properly entitled to.

The rise in insurance premia is probably as much a result of a hardening market than any spike in claims activity, although obviously fraudulent activity isn't doing any of us any favours.

As per the link, £44 of every household's insurance bill is to pay for fraudulent claims, and £30 for uninsured drivers.

I don't know what the solution is, because I agree with the principle of access to justice for all. I think that some sort of streamlining to minor PI claims, with fixed costs, may assist, but like the NHS if you make something free it is abused, and if you make people pay for it then the deserving may not use it. But the "compensation culture" will cost us dear, and not just financially.

W1

rjsterry wrote:

W1 wrote:

rjsterry wrote:

The idea of litigation being more widely available, rather than the preserve of the rich is not a bad thing either - why should only wealthy people be able to seek redress for damage to property or personal injury. This is bound to lead to an increase in claims, and if that means that all my insurance premiums are higher, then so be it. A quick calculation shows that as a family, I probably spend about 2-3% of gross earnings on insurance, so if that becomes 2.5-3.5% it's not going to fundamentally change anything.

If litigation is risk free to the claimant (i.e. no win, no fee), then obviously this encourages spurious claims (because you may as well "have a go" as you have nothing to lose). Due to legal and investigative costs, these claims are often cheaper to settle than to defend, even if a significant number of them have no merit at all. In other words, people are cottoning on to the fact that for zero risk to them, and with absolutely no requirement to actually prove anything, they can get a couple of grand which they may well not be entitled to. And that is paid for by you and I. That's to say nothing of those who deliberately cause accidents. And that is encouraged by the ambulance chasers.

If you're happy about that, then so be it. I'm not. And the knock-on effect is that there is a risk that people are put off organising anything, due to the risk of being sued. And that's what causes the Daily Mail to go mad about conkers being banned and pancake races being cancelled.

Bobbins! Every time I've had to claim for anything on my insurance, I've had to provide some evidence of the loss/cost of replacement. Having seen something from the receiving end of one case of a fairly weak claim - the insurance companies response could be summed up as 'get stuffed' - I don't think they do just roll over and pay out unless the sum being claimed is very small.

With minor medical complaints (such as whiplash), it's often difficult to prove anything anyway 9either way). But if it's going to cost the insurer £3k in legal and medical bills - even if they win, they don't get this back in the small claims court - then they aren't going to resist a £1500 claim.

bigmat

W1 wrote:

BigMat wrote:

I think the distinction is that in a lot of cases, whether a claim is spurious or inflated is subjective - in this case, Mr Spektor may actually have believed he was entitled to claim £1 million (or whatever the figure claimed actually was). For me, that is distinct from fraudulent claims where the whole thing is manufactured. I can see that the claims farmers may have caused an increase in dodgy claims, but the general access to justice resulting from conditional fee agreements has probably also enabled a lot of people to recover the compensation that they are properly entitled to.

The rise in insurance premia is probably as much a result of a hardening market than any spike in claims activity, although obviously fraudulent activity isn't doing any of us any favours.

As per the link, £44 of every household's insurance bill is to pay for fraudulent claims, and £30 for uninsured drivers.

I don't know what the solution is, because I agree with the principle of access to justice for all. I think that some sort of streamlining to minor PI claims, with fixed costs, may assist, but like the NHS if you make something free it is abused, and if you make people pay for it then the deserving may not use it. But the "compensation culture" will cost us dear, and not just financially.

I wouldn't take those figures as gospel. It sounds better for insurers to say that increasing premia are a result of fraudulent claims, rather than "hey, its a tough market and we need to improve on our margins!" There is obviously is an issue with fraudulent claims, but I don't think "compensation culture" is rife in the way that certain parts of the press would have us believe.

bigmat

W1 wrote:

rjsterry wrote:

W1 wrote:

rjsterry wrote:

The idea of litigation being more widely available, rather than the preserve of the rich is not a bad thing either - why should only wealthy people be able to seek redress for damage to property or personal injury. This is bound to lead to an increase in claims, and if that means that all my insurance premiums are higher, then so be it. A quick calculation shows that as a family, I probably spend about 2-3% of gross earnings on insurance, so if that becomes 2.5-3.5% it's not going to fundamentally change anything.

If litigation is risk free to the claimant (i.e. no win, no fee), then obviously this encourages spurious claims (because you may as well "have a go" as you have nothing to lose). Due to legal and investigative costs, these claims are often cheaper to settle than to defend, even if a significant number of them have no merit at all. In other words, people are cottoning on to the fact that for zero risk to them, and with absolutely no requirement to actually prove anything, they can get a couple of grand which they may well not be entitled to. And that is paid for by you and I. That's to say nothing of those who deliberately cause accidents. And that is encouraged by the ambulance chasers.

If you're happy about that, then so be it. I'm not. And the knock-on effect is that there is a risk that people are put off organising anything, due to the risk of being sued. And that's what causes the Daily Mail to go mad about conkers being banned and pancake races being cancelled.

Bobbins! Every time I've had to claim for anything on my insurance, I've had to provide some evidence of the loss/cost of replacement. Having seen something from the receiving end of one case of a fairly weak claim - the insurance companies response could be summed up as 'get stuffed' - I don't think they do just roll over and pay out unless the sum being claimed is very small.

With minor medical complaints (such as whiplash), it's often difficult to prove anything anyway 9either way). But if it's going to cost the insurer £3k in legal and medical bills - even if they win, they don't get this back in the small claims court - then they aren't going to resist a £1500 claim.

Isn't the small claims limit for personal injury claims £1,000? (can't be bothered to check...)

Costs of defending low value claims are likely to be surprisingly small - bread and butter work for medical experts (most reports largely cut and paste jobs) and legal aspects either dealt with in-house by insurers, are farmed out to law firms on ridiculously low fixed fee or even for free (sort of a loss leader for the lawyers).