Government backs the fight against compensation culture

Prime minister David Cameron has commissioned a review into “compensation culture”, looking at the cost of meeting health and safety legislation for businesses, and the growth of the ‘no win, no fee’ approach to claims management.

Cameron has commissioned Lord Young, a former member of Margaret Thatcher’s cabinet, to conduct the review and report directly back to him, bypassing the usual departmental structure.

Young’s review is likely to build on the work done by Lord Jackson, who earlier this year called for the abolition of referral fees and other wide-ranging changes to the civil litigation process.

Beachcroft’s senior partner, Andrew Parker, who advised Lord Jackson on his review, said it was good news for the insurance industry. “Anything that shows that the government is looking at Jackson is welcome. I think the two will sit well together.”

Keogh’s director of market affairs, Steve Thomas, added that the review was likely to look at bringing a degree of balance back to health and safety legislation, and speculated that it could result in revisions to the Compensation Act.

A spokesman for the Claims Standards Council, which represents claims management companies, condemned the review, saying: “Why is the government wasting money? There is no such thing as compensation culture.”

Cameron said: “The rise of the compensation culture over the last 10 years is a real concern, as is the way health and safety rules are sometimes applied. We need a sensible new approach that makes clear these laws are intended to protect people, not overwhelm businesses with red tape.”

Lord Young said: “Health and safety regulation is essential in many industries, but may well have been applied too generally and have become an unnecessary burden. I hope my review will reintroduce an element of common sense. We need a system that is proportionate and not bureaucratic.”