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The UK is not in the grips of a US-style compensation culture, nine out of every ten workers injured or made ill by their jobs never receive a penny, and the best way for employers to ensure they stay out of court and keep costs down is to make their workplaces safer, according to a report published by the TUC on July 28. 'The Compensation Myth' sets out to demolish ten of the most commonly held myths put about by commentators who say that the cost of compensation paid out as a result of workplace accidents and injuries is spiralling out of control. On the contrary, says the report, the number of civil compensation cases involving claims against employers has fallen every year for the last five years.
The UK also 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 1999. Dispelling the myth that UK workers are all too ready to whack in a compensation claim the second they get ill or are slightly injured, 'The Compensation Myth' says that only 80,000 of the 850,000 plus people who are the victims of work-related accidents or injuries each year, ever receive any kind of payout from their employer or the state. Myth three destroyed by the TUC is the one that says that compensation payments are too high. The six figure payouts that hit the headlines are extremely rare, with the average settlement around the £7,500 mark, and the vast majority receiving less than £5,000.
TUC General Secretary Brendan Barber said: "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. 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."
The report also dispenses with the idea that employers liability insurance is just another burden on UK businesses by pointing out that the average cost is just 0.25 per cent of firms' total payroll costs and is the lowest in Europe. It also says 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.
It also knocks the notion that employers often have trouble getting insurance, noting that despite it being a legal requirement, seven per cent of small businesses don't have cover because they want to cut costs.
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