Challenging the cult of compensation

Cheerleaders of compensation schemes fail to appreciate how much they dent individuals’ sense of self and independence.

Rosamund Cuckston

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Topics Politics

While there has been much discussion about the problem of dependency in relation to the welfare state in recent months, another aspect of the unhealthy relationship between state and individual has received less attention. During 2012, UK charities, trade unions and personal-injury lawyers campaigned against proposed changes to the Criminal Injuries Compensation Scheme (CICS), which pays out money to victims of crime. But in both the Lib-Con government’s professed motivation for reforming the scheme, and the opposition to the reforms, there was little or no discussion about false claims and malingering and whether the availability of compensation based on the severity of an injury is ultimately helpful.

The CICS is an important part of the UK’s compensation culture. Over the past couple of years, there has been more and more discussion about the rise in road-accident claims, particularly for ‘whiplash’ injuries, with plenty of evidence of systematic fraud. There has also been discussion of compensation in relation to the sexual-abuse allegations being investigated by Operation Yewtree, launched in the wake of revelations about the late BBC presenter and dj, Jimmy Savile. So the reforms to the CICS are timely, and potentially important, yet there was little discussion of them in relation to this broader context of claims-making.

Since its inception in 1964, the CICS has paid out large amounts of money to people for what the government is now terming minor injuries. Bringing in the changes to the scheme, according to Labour MP Sadiq Khan, would mean that 90 per cent of those who had been eligible for compensation would no longer be able to claim. The Association of Personal Injury Lawyers (APIL) said the proposed striking out of claims under the first five tiers of the scheme would affect 42 per cent of the awards made.

The government argues that the CICS was costing £200million per year and took a long time to pay compensation. The amendments to the scheme, which were brought into effect from 27 November 2012, will stop awards for minor, short-term injuries. The changes will also limit the awards that can be made for loss of earnings, basing payouts on statutory sick pay, which is not much higher than unemployment benefits. The scheme will also be solely for those deemed to be of good character. Anyone with an unspent conviction, who had been given a custodial sentence or community order, will now be excluded.

These changes are, on the whole, a good idea. They will help to rein in elements of the scheme that could encourage malingering and false claims: the eroded and broadened concept of violent crime (which included attacks by dogs, suicides on railways, and the behaviour of pregnant women affecting fetuses); the link between increased loss-of-earnings awards and the length of the effects of the injury in question; and the ability of those with criminal convictions to make claims.

However, if the motivation for the changes was to reduce the number and cost of false claims, it was not overt: the official summary tracing the CICS changes is either euphemistic or the government really did believe they were only doing it to make the scheme ‘sustainable’. It is surprising that the arguments for change were not put in terms of reducing the opportunity to rip off the exchequer and the dangers of dependency that come with government handouts. After all, such arguments are made all the time in relation to welfare-benefit cuts. The elements of the CICS that were being altered had been brought in by the previous Labour government, so from the point of view of the current Lib-Con administration, any problems with the scheme could have been blamed on its predecessor.

The debate about the changes was emotive but very narrow. The opposition focused on those categories of victims who would now lose out. Charities and trade unions emphasised that the scheme gives a sense of closure to the victim, a chance to ‘heal wounds’.

When it comes to helping victims, it isn’t clear that this claimed therapeutic aspect of the scheme is actually effective. In fact, the availability of compensation could actually make some people’s situations worse. The level of compensation is based on the severity of the experience, the duration of any harm done, and the broadened concept of what constitutes a crime of violence. These are all incentives to exaggerate – consciously or unconsciously – the effects of any incident. Moreover, the bureaucratic and lengthy nature of the compensation assessment process leaves claimants in an enduring state of thinking about themselves as victims, denying them the opportunity to move on.

For example, last year a compensation claimant sued her solicitor because the psychologist the solicitor had appointed wouldn’t support the claimant in saying her post-traumatic stress disorder (PTSD) was likely to have a permanent effect. The result of this psychological assessment was to lower the amount of compensation the claimant received. Demanding expert recognition that an experience will produce a permanent effect isn’t about any ‘sense of closure’; it is a demand to be labelled permanently as damaged goods.

In another example, solicitors from the firm GDLP, writing for the children’s charity bibic, complained that claims on behalf of children affected by fetal alcohol syndrome – caused by the heavy drinking of their mothers during pregnancy – would also now be excluded. Yet including alcohol-fetal claims in handouts was also about widening the scope of the scheme to include claims from all sorts of aggrieved or upset people.

Nor can opponents of the changes highlight great successes. As the campaign against the CICS changes got underway, the railway trade union RMT ran an article about a case they had supported over 10 years that produced a final pay out of £5,500. That seems a paltry payout after a decade of battling, when the consequences of the case were likely to have included a heightened sense of vulnerability on the part of the individual concerned, alongside the ongoing stress of the action itself. Could the claimant here really be said to have benefited?

These examples suggest the effect of the compensation scheme has been to produce anything but ‘closure’. Instead, they suggest that the CICS has produced weeping sores, not healed wounds.

If there is a disconnect between the supposed benefits of compensation and the reality of seeking it, and between the intentions of the reform and reasons given for it, then it is worth examining why that is. Perhaps no one mentioned malingering because those well-documented aspects of it – the playing up of vulnerability and the medicalisation of reactions to life’s vicissitudes, along with the assumption that expert help is required to get over a bad experience and the idea that a small government handout will make it all better – have become so entangled with the justification for the existence of a wide range of organisations.

Perhaps none of the various parties to the debate about the CICS admitted the failure of the idea of ‘closure’ because, while they may criticise the scheme for its shortcomings, the real beneficiaries of this sense of dependence and the reality of never achieving closure are these organisation themselves.

Rosamund Cuckston helps organise and run the Birmingham Salon.

To enquire about republishing spiked’s content, a right to reply or to request a correction, please contact the managing editor, Viv Regan.

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Topics Politics

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