Written question asked by Lord Beecham (Labour), in the House of Lords. It was answered by Lord McNally (Liberal Democrat) on Monday, 28 November 2011.

Justice: Compensation

Question: To ask Her Majesty’s Government, further to the Written Ministerial Statement by the Lord Chancellor on 21 June 2011 (Official Report, Commons, col. 9-12WS), what they mean by the term ““compensation culture””; and what evidence they have that such a culture is increasing in certain areas of law.

Answer: In the passage referenced by the noble Lord, the Lord Chancellor mentioned a "fear of a compensation culture". Under the current arrangements, claimants are able to bring cases without any financial risk. This risk-free litigation encourages unnecessary or avoidable claims to be pursued and puts business and other defendants who have to deal with these claims under pressure from excessive legal costs. In personal injury cases, for example, figures indicate that in 1999 claimant solicitors' costs were equivalent to just over half the damages agreed or awarded at 56 per cent. By 2004, average claimant costs were 103 per cent of the damages. By 2010 average claimant costs represented 142 per cent of the sums received by the injured victims. The changes the Government are implementing are designed to restore a much needed sense of proportion and fairness to the current regime.

Secondary information

Type: Written question
Reference: 13563; 733 c24WA
Session: 2010-12
Related items: Justice: Reform
Tuesday, 21 June 2011
Written statements
House of Lords
Subjects: Compensation Civil proceedings Legal costs
Link: View this Written question on www.publications.parliament.uk