Lawyers should not be blamed for the UK’s compensation culture, according to one Supreme Court judge. He said that it is unfair for people to describe lawyers as ‘ambulance chasers’, particularly because they are only doing a job, and that it is the system which is set up in favour of claimants which encourages such a large number of claims to be made. He said that it is not the lawyers who have created the system, and therefore cannot shoulder the blame for the number of claims which are made.

Lord Sumption also warned against blaming those who have suffered personal injury that have made claims of being greedy. He said that this was not the way to challenge the core issue at the heart of the number of claims being made, which is that the current law is ‘extraordinarily clumsy and inefficient.’ He said that the culture of blame which has been given to claimants is not only unfair, but that it ‘often misses the target.’

Increase in fraudulent claims

The public should not blame people that use the system that has been created for them to use, he said, adding: ‘If the law entitles the victim of an accident to compensation, it ill becomes us to criticise him for knowing it and claiming.’

The UK has seen a massive increase in the number of people who are making personal injury claims. The blame for the increase in claims being made has been placed on the increase in the number of no-win, no-fee lawyers operating in the UK, as well as increasing numbers of cold callers who target victims of accidents and encourage them to sue. The increase in the number of people making personal injury claims means that there has been a dramatic increase in the price of insurance, particularly motor insurance. Not only is there concern about the increasing costs of insurance, but there is increasing worry that the NHS running costs are becoming too steep, as well as concern about the number of fake claims which are being made.

Earlier this year, a group of tour operators wrote an open letter, which was addressed to the ministry of justice. The letter was written to bring to light the threat to Britons who are travelling abroad. The letter said that the increase in the number of claims which are being made will soon result in foreign resorts and hotels refusing access to Britons. The reason, they say, is that they have seen a surge in the number of holiday illness claims which have been made, for things such as food poisoning.

In the Queen’s speech, the government promised that they would try to: ‘modernise the courts system and help reduce motor insurance premiums.’ This promise extended to a ban on claims which are settled without the presentation of medical evidence, as well as changes to whiplash legislation, which says that there will be a fixed tariff for those who make whiplash claims.

Lord Sumption, who was speaking at the annual lecture of the Personal Injuries Bar Association, did not speak only of the proposed changes to the legislation, but indicated his concerns about the changes which had been proposed. He said that he was not confident that the proposed changes would be enough to stop the increasing numbers of compensation claims being made in the UK.

He said: ‘If the law says that we are entitled to blame other people for rather more of our misfortunes than hitherto, it is really rather absurd to complain about a culture of blame, as if this was somehow a symptom of our collective moral degeneration.’

The increase in the number of personal injury claims which are being made has been substantial. In 1973, the number of people who made claims sat at around 250,000. In 2013-14, this figure had risen nearly 500%, to 1,200,000. The clear majority of these claims were for road accidents. Lord Sumption said that in this time there has been no increase in the number of road accidents. This, he said, meant that one of the likely reasons for the increase in claims is the increased awareness that people have about which claims they can make.

Studies have found that over a third of costs in insurance premiums go towards legal and administration fees.

Experts say that over 90% of claims are made against insured parties. The other 10%, they say, are mainly made up of claims which have been made against the state.

Lord Sumption said that insurers and the state have repeatedly failed to provide claimants with adequate compensations. This, he said, means that everyone sees a rise in the cost of their insurance. Describing the current insurance system as being ‘effectively socialised’, he said that the public face the burden of the increased costs in taxes and higher insurance premiums.

He also said that insurers do not have ‘bottomless pockets. In some extreme cases, he said that an long-term increase in the number of claims might see insurers refuse to cover the exploited sectors. He spoke of the same situation in the US and product liability insurance.

Speaking about the issues with the current legislation, he said: ‘A system which makes compensation dependent on fault makes little sense if the damages are being paid not by the persons at fault, but by society as a whole.’

Despite criticising the current system, Lord Sumption finished his speech by reiterating his confidence in the long-term future of the system. Describing the alternative as fault free, and saying that it would be funded by taxation and compulsory insurances, he said that it would be less wasteful, but at a larger cost. He praised the current system for teaching the public about the function of the law, and teaching people personal responsibility.

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