Name, blame, shame and claim

Reproduced from Last Magazine, summer 2000

Is Britain experiencing a litigation crisis? Until 1998, the issue barely merited discussion. More recently, as the costs of court fees, lengthy legal actions and, in some cases, compensation have become more apparent, concern about the rise of an American-style ‘compensation culture’ has increased dramatically. British people, it seems, are more willing to resort to law to challenge decisions or to allocate blame for injurious experiences.

But even though concern about Britain’s nascent compensation culture is relatively new, it is already polarised between two equally untenable arguments. On the one side, the critics point to unprecedented awards and a widening range of legal action as evidence that the courts are besieged by greedy, lawyer-friendly claimaints. On the other side, organisations such as the Law Society and the Association of Personal Injury Lawyers keep pointing to the low levels of court activity and examples of the apparently small percentage of injured people who pursue legal actions (perhaps as small as five percent). What is really going on here?

Court statistics actually give little indication of growing litigiousness. Disposals in cases dealt with by the High Court, for example, decreased from over 19,000 in 1988 to just 4229 in 1997. A similar decline is evident in personal injury cases in particular, from 14,410 in 1988 to 2850 in 1996. Much of this is due to changes made in 1991 to court limits, which allowed the lower (and cheaper) County Courts to deal with all tort cases, regardless of value. However, a decline in claims has also occurred in the County Court, from a recession-led high of 26,722 disposals by trial in 1992, to just 15,511 in 1997 (Judicial Statistics, Annual Reports 1988-1997).

So the statistics across the 1990s seem to indicate that fewer people want their day in court. But this is no vindication of the personal injury lawyers’ denial of the growth of a litigious culture. The decline of court trials has, in fact, been paralleled by exponential growth in arbitrations, mediation schemes, out-of-court settlements, quasi-legal arenas and complaints procedures. Far from there being a disinclination to seek legal enforcement of duties and responsibilities, litigious activity in Britain is increasingly taking new forms. And unlike court trials, much of this activity remains hidden from public scrutiny.

Companies and other organisations settle cases, even if they are confident of winning. This is partly to avoid adverse publicity, but also because many costs are non-recoverable and entering into court proceedings is a commitment of unpredictable length and resources (unpopular with their insurance companies in many instances). Figures from insurance companies demonstrate that claims volume has increased in many areas of service and goods provision. Not surprisingly, few organisations want to advertise their legal liabilities – especially when they are as embarrassing as the case of one local authority in Lancashire, whose expenditure on compensation claims relating to damaged roads rivals its entire road-building budget.

An important innovation in litigious activity is the expansion of alternative (or ‘appropriate’) dispute resolution (ADR). The British Centre for Alternative Dispute Resolution (CEDR) reported last year that mediations rose by 106 percent between 1997 and 1998. They now handle a total claims volume in excess of £4billion, with an increasing proportion of professional negligence and personal injury claims. Under the ongoing legal reforms in England and Wales, out-of-court resolutions will continue to expand, supported by ADR funding and penalties when settlement opportunities are not taken. These cases are frequently overlooked by researchers and commentators who equate litigiousness to formal court proceedings.

Many organisations in both the public and private sectors are reporting a rise in complaints and small-scale compensation claims. An even more dramatic rise seems to have occurred in claims against health service providers. According to the National Health Service Litigation Authority (NHSLA), only three percent of claims reach court – the vast majority are settled at a much earlier stage. The costs of clinical negligence action against national health service trusts reached over £300million in 1998, from just £85million in 1991. The projected figure for 2000 is already £500million. Indemnity and claims costs have also increased for the Medical Defence Union (MDU), a mutual fund for doctors in general practice in England and Wales, from £29million in 1992, to £67million in 1997. Because so little of this claiming and compensating activity takes place within the court system, the only evidence of its existence is the financial consequence that shows up in published accounts.

There is, then, more evidence to suggest an increasingly litigious climate in Britain than not. But many of those who criticise this shift seem to do little more than selectively react to the numbers, by focusing on compensation awards and legal costs. Big awards to individuals who, apparently, are not deserving of public sympathy are plastered across the front page of the Daily Mail, and we are increasingly hearing the refrain that it has ‘gone too far’, as though there were some critical mass of claiming which should be objectionable. Rows over the political worthiness of who receives how much compensation have become commonplace, with the trauma claims made by those who policed the Hillsborough disaster pitted against the thwarted claims of the relatives who watched loved ones die on TV.

But while narrowing the question of litigiousness to the impact of particular compensation awards might be useful if you want to plead the case of sectors that have been particularly badly hit, it does not get to the heart of what is objectionable about a society in which almost every dispute can become the subject of a legal action, or threatened legal action. And while the two sides of the debate trade court statistics, British society is being fundamentally reorganised around anticipating liability, in a way that is far more damaging than any legal bill.

British organisations are increasingly following their American counterparts in introducing extensive litigation avoidance strategies. Local authorities are restricting the kind of activities and public spaces on offer; hospitals refuse to admit independent midwives; obstetricians are encountering prohibitive indemnity costs; workplaces have introduced stress counselling; and parents are being confronted with waiver forms for more and more of their children’s activities. This might be seen as an overreaction if we look at it in the light of the small number of cases meeting with success in the courts, but even the suggestion of a possible legal action creates the imperative to modify behaviour. It would be foolhardy to do otherwise.

Insuring against the risk of litigation means looking at everything we do through the prism of liability. For example, beauty therapists are unable to offer laser-based therapies, not because they are unsafe, but because they cannot be covered under existing insurance. When litigation risk tops the agenda, innovation becomes increasingly unlikely. According to Carl Djerassi, inventor of the pill, litigation fears have killed any serious development of oestrogen-based contraceptives this century.

This sensitivity to companies’ liability is often greeted as a positive way of regulating the potentially irresponsible and profiteering behaviour of big organisations and professionals. The argument runs that, if a doctor thinks the patient might sue, he will take more care. But will he? Is it really desirable for a surgeon to be thinking about his liability when he decides on an appropriate procedure? Taking care to avoid litigation is not the same thing as taking professional care. Professional care is about treating the patient or client as best you see fit. Litigation avoidance is based on considering the possibility of that one person who might construct a legal case out of the situation.

Advocates of more legal redress often argue that litigation creates more accountability. But faced with the possibility that words and actions might be read into a legal claim, organisations are forced to become more secretive. Where, for example, peer-reviewed journals were a useful way for pharmaceutical and medical organisations to openly review the efficacy of therapies, they have become a potential liability by exposing recognised problems and weaknesses in existing technology. The consequences of this are to close down a very important exchange of information.

Litigation does restrict behaviour, but in the worst possible way. Litigation, and its implied liability for others, is quite arbitrary in whom it punishes and awards, and its consequences for behaviour are very damaging. Legal liability does not simply restrict the excesses: it actually limits the responsibility that we are prepared to take for each other.

Litigation avoidance makes all professional advice unhelpful because professionals do not relish the idea of being held responsible in a litigious climate. The only advice now available in some quarters is to seek more advice. I discovered this recently when my young son was struck down with a virus. On consulting the child health manual to determine whether medical intervention was necessary, I discovered that even diagnoses of the mildest infection carried the rider that it was advisable to consult a doctor. So what is the point of the book?

More unnervingly, litigation avoidance frames our attitude to our daily interaction with one another and to the responsibility we are prepared to take on. Our potential liability makes us think twice about looking after other people’s kids. It makes us wonder whether we would try to give first aid to somebody in an emergency. And for this, there is no compensation.

Tracey Brown is a contributor to Compensation Crazy: Do We Blame and Claim Too Much?, Hodder & Stoughton, 2002. Buy this book from Amazon (UK)

Reproduced from Last Magazine, summer 2000