The number of civil compensation cases involving claims against
employers has actually fallen every year for the last five years,
says the report, entitled The Compensation Myth.
The UK pays out much less money in compensation cases, as a
proportion of its GDP, than any other European
country except Denmark, and the cost of compensation payouts has
remained the same, in real terms, since 1989.
The TUC also
denies that compensation payments are too high. The six figure
payouts that hit the headlines are extremely rare, it says, with
the average settlement around £7,500, and the vast majority
receiving less than £5,000.
The report also dispenses with the idea that employers'
liability insurance is just another burden on UK businesses –
pointing out that the average cost is just 0.25% of firms’ total
payroll costs and is the lowest in Europe. It warns that because
there is little difference in the premiums paid out by companies
with good or bad safety records, there is no incentive for
employers with dangerous workplaces to tidy up their acts.
The other claims dismissed by the TUC report are the idea that a
large number of claims in recent years has forced up the cost of
insurance premiums for employers and the notion that injury and
illness cases wouldn’t get taken up if unions stopped encouraging
their members to make frivolous claims.
It also knocks the notion that employers often have trouble
getting insurance, noting that despite it being a legal
requirement, 7% of small businesses don’t have cover because they
want to cut costs.
"All the time we hear that the UK is in the grip of a runaway
compensation culture and that we are moving ever closer to a
US-style ‘sue-first-ask-questions later’ system," said TUC General
Secretary Brendan Barber. "The harsh reality for thousands of ill
and injured workers is very different with most getting little if
anything when things go wrong at work as a result of their
employers’ negligence."
"If insurance premiums more closely reflected an employer’s
health and safety record, with those happy to put their employees
at risk paying more and those with safer workplaces paying less, we
might start to see an improvement in the UK’s poor accident and
illness statistics. Cutting our compensation bill is easy, but
first UK bosses have to get serious about improving health and
safety," he added.
The report suggests two other ways in which the UK’s
compensation bill could be cut:
- When someone is made ill or injured at work, the priority
should be to allow the individual access to proper rehabilitation,
greatly increasing the chances that they will make a full or early
recovery.
- Insurance companies should be more ready to admit liability
earlier on to avoid running up costly medical and legal bills.
