Gary Slapper is Professor of Law and Director of the Centre for Law at The Open University. Professor Slapper has written many law books and has published a wide range of academic journal papers. He writes a legal column for The Times, and is a legal consultant for programmes on the BBC and Channel 4. His most recent book, 'How the Law Works, a friendly guide to the law,' is published by HarperCollins.
Is the existence of a compensation culture in the UK a reality or myth?
A myth. People may have got more emotionally litigious and more prone to shout “I’ll see you in court” over the garden fence, in a shop, or at the end of a heated business phone call but that has not lead to more court cases. The number of cases settled out of court has gone up in some areas of practice but the law doesn’t actually make it significantly easier to sue anyone for negligence or a defective good or service than it did ten years ago. During the last ten years, the sort of civil litigation that people mean when they speak about “compensation culture” has actually gone down, not up. There are thousands fewer of such claims in the courts now than ten years ago.
Some funny stories are both false and American. One report is of the man who sued the manufacturers of his Winnebago touring vehicle after he put it on cruise control and went into the back to make himself coffee, not realising it didn’t automatically steer. The vehicle crashed and, it was widely reported, he sued alleging inadequate operating instructions. But in fact no such case was ever brought. Is Britain becoming more litigious in general and if so why?
Most ludicrous claims don’t get past the first five minutes of an interview with a solicitor. Even when a lawyer is exceedingly keen, injustice will almost never occur because judges tend not to make daft decisions. There is a key difference between “man sues over nuts in peanut butter” and “man wins damages over nuts in peanut butter”.
It would be wrong to say the UK has got more litigious on the basis that more people now read about and discuss all these cases. You wouldn’t say the UK has become more sporting because it watches more sport on TV than before.
Are “no-win no-fee” cases and the prospect of class action a good thing for Britain?
A good thing if they facilitate people’s access to law, and if cases are judged fairly by the courts. These schemes are not any reason for any company which is behaving reasonably to worry about. If a company has reasonable operating procedures and these are routinely executed in a reasonable way then it doesn’t matter how many or how few people go into solicitors’ offices to complain about the company. They’ll be wasting their time.
How much are the media to blame for building up the idea of a compensation culture?
I don’t think the media are to blame. On the whole, they provide a useful service in informing us about what sort of cases are being brought and, often entertainingly, highlighting the crazier cases. Those barmy cases inevitably fail.
The courtroom is a very good public classroom for teaching social rules and the way they are actually applied, and the media are great at colourfully distributing the lessons.
What is the number one emerging liability risk that business and the insurance industry should watch out for?
The Corporate Manslaughter and Corporate Homicide Act 2007, which is now in force. The Act facilitates the conviction of companies whose gross negligence results in death to employees or members of the public. In its Regulatory Impact Assessment for the legislation, the government estimated that the new offence would more than double the number of annual prosecutions for this crime. Being convicted isn’t something businesses can insure against (as it is a crime) but convictions are something about which insurance companies will be concerned because convictions are admissible and relevant evidence in civil cases so they increase the chance of being found liable in civil law. The new law doesn’t just cover companies it covers partnerships, health services, and some government departments.
Is fear of liability strangling innovation and entrepreneurship and if it is, what is the solution?
I don’t think it is strangling innovation or entrepreneurship. If companies behave well and all their processes are reasonable, they can’t be liable for any loss or damage. Just because an accident happens doesn’t mean anyone is to blame. As Lord Justice Balcombe said in a case in 1995 “It needs to be said that there are still such things as true accidents and that not every accident can be attributed to the negligence of some person or persons.”
There are, though, plenty of apparently daft decisions made by public bodies which do things like ban children from playing conkers or running in the playground because they fear they will be liable in the event of an accident.
How can society/business best avoid unnecessary litigation?
“The first thing we do, let’s kill all the lawyers” was Dick’s opinion in Henry VI Part II but that’s a rather extreme step to take. The best step to take is really just to be reasonable. To avoid liability, companies and directors don’t have to be perfect, invincible, and possessed of superhuman foresight. They don’t need to take any bizarre precautions to avoid loss or injury; that is a common misconception. They just have to be reasonable. Shareholders can help by being vigilant and taking action against wayward directors.
Sections 171 to 177 of the Companies Act 2006 impose clear duties on directors, and this might well serve to focus directorial minds on doing things in a way that would prevent any writ-happy litigant from ever having any chance of winning. Section 172 states that a director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company and in doing so have regard (amongst other matters) to “the likely consequences of any decision in the long term...the interests of the company’s employees...and the desirability of the company maintaining a reputation for high standards of business conduct…”.
The best shield against litigation is simply to operate a business in a way that is “reasonable”. There is more law in that one word than any other.
