In a startling development which could have far-reaching consequences for our legislative programme the government published a bill to tackle a problem which does not exist.

The fact that the problem does not exist does make tackling it rather tricky, but thankfully there are some first rate brains in this government so business and public can rest assured that if anyone can deal with this non-existent problem, they can.

We know that the problem does not exist, because the man bringing forward the legislation - Lord Falconer, the Lord Chancellor - is an exceptionally able and clever man. If he says something’s not happening then who are we to disbelieve him? Speaking almost exactly a year ago Lord Falconer devoted a whole speech to what he referred to as the “so-called compensation culture” which was not sweeping Britain.

On Wednesday he unveiled the Compensation Bill to deal with it. One can see the issue. The figures are indisputable. Across Britain thousands of children are playing conkers without the use of a face mask. Hundreds of schools are wantonly engaging in school trips and thousands of people are falling over without suing those responsible for the place where they tripped.

The scale of the problem’s non-existence goes even deeper. Personal accident claims fell by almost 60,000 in 2004 and two major claims marketing companies have gone bust. The Better Regulation Task Force - no slouch when it comes to lamenting the difficulties besetting business - describes the compensation culture as a “myth”.

No wonder the government felt forced to act.

It turns out that although the government is clear that the so-called compensation culture does not exist, it is rather concerned that there is a perception that there is one. Hence the compensation bill.

So now we have a piece of legislation designed not to tackle a problem but to tackle the perception of a problem. The government is to legislate against a perception. Perhaps this makes sense. After all, so many years of legislating to create the perception that government is doing something, why not have legislation to remove a perception.

How will the government tackle this false perception? Well, naturally there will be a new regulatory body. How exactly it will regulate perception, remains to be seen. Will there be hefty fines for people who continue to believe in the compensation culture? Will the Newsroom southeast be prosecuted for running scare stories about cancelled school trips?

That this new body will act as a check on the worst excesses of the ambulance chasing legal groups seems welcome, at least until such time as people grasp that the courts are actively striking down spurious claims or the insurance industry develops a sufficient spine to start standing up to unreasonable demands. But surely this runs the risk of looking like something which will tackle a problem rather than a perception?

It gets better. The Compensation Bill proposes a change in the law to make sure courts strike down spurious claims. The accompanying explanatory notes to the legislation state section one of the bill “provides that in considering a claim in negligence a court may (note it says may, not must) in determining whether the defendant should have taken particular steps to meet the standards of care, have regard to whether a requirement to take those steps might prevent an activity which is desirable from taking place.”

The very next paragraph of the notes then states: “This provision reflects the existing law and approach of the court as expressed in recent judgements of the higher courts”.

So in other words the government is legislating to give courts the chance to do something they already do. Yup, the perception of a problem is being tackled with the perception of change in the law. And they say this government is losing its grip.

Perversely the one step which might have helped relieve the costs faced by businesses when they are sued - namely raising the £1,000 limit on personal injury claims which can be pursued through the small claims court, thereby streamlining and simplifying the process - is not in the bill. But since there is only the perception of a problem, perhaps ministers are nervous about doing anything too concrete.

Justifying the new bill, Lord Falconcer said the measure “will send a clear signal” that there is no place in Britain for a have-a-go compensation culture. Which is good, because as he has already said, we don’t have one.

Get alerts on UK when a new story is published

Copyright The Financial Times Limited 2022. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Comments have not been enabled for this article.

Follow the topics in this article