A single voice of reason

Does the compensation culture really exist? Should we be worried about liability trends in terms of scope and level of payments? Are there specific problem areas where changes in attitudes could cause problems now or in the future?

A handful of hard-line claimant lawyers will retort with a steadfast "no" to all three questions, but most people will have some concerns, some of them serious.

For those in the latter category, this autumn presents a golden opportunity to do something to address those concerns. The Department of Constitutional Affairs will be consulting on the Compensation Bill that it has been instructed by 10 Downing Street to draw up and put to parliament. Tony Blair believes we have a compensation culture and that something must be done about it. The trouble is, he does not know where to start so he has passed the buck to the DCA, which is similarly 'all at sea'.

John Greenway MP, chairman of the All Party Parliamentary Group on Insurance and Financial Services, has told the industry that it has a once-in-a-generation opportunity to reshape liability law and compensation arrangements.

The legal reticence should not be too much of a surprise because the only obvious routes for substantial reform would take some areas of negligence and liability out of the courts. So, do not leave it to the lawyers if you want some substantial progress has to be the key message to the insurance industry.

This means telling the DCA and parliament what should be done about it without urging a rolling back of years of court-driven (and often justified) extension of liability.

Progress is more likely going to be made by looking at ways of delivering non-financial compensation, such as rehabilitation or putting some areas on a no-fault footing. Both of these have been touted in the recent past and, indeed, progress has been made on the rehabilitation front, but this falls short of embedding it as a core solution in personal injury cases. But, if you want to achieve a quantum shift in the approach to liability claims in this country, then some move towards no fault liability is the only way to guarantee genuine change.