You can't always get what you want

Compensation claims are bankrupting society, says a report. So who takes responsibility? By Lynne Wallis

A report published yesterday, attacking Britain's movement towards the compensation culture of the US, says the pounds 6.8bn paid annually in damages to victims of accidents and trauma must be reduced. The right-wing Centre for Policy Studies think-tank says that the trend towards huge payouts is threatening Britons' capacity to take risks and innovate, and is damaging human relationships. "Courting Mistrust" applauds the relatives of those who died in the Aberfan disaster of 1966 for not launching prosecutions.

Eileen Dallaglio, a bereaved mother and member of the Marchioness Action Group, is astounded by the report. Mrs Dallaglio, whose daughter Francesca, 19, died when the Marchioness was sunk on the Thames in 1989, failed to secure any compensation for bereavement, trauma or financial loss, though many families were awarded pounds 1,000-pounds 7,000 for bereavement under the terms of the Fatal Accidents Act of 1976.

Mrs Dallaglio was initially offered pounds 5,000 by the owners of the Bowbelle, the sand-dredger that collided with the Marchioness. The sum was increased to pounds 19,000 and, three days before court, pounds 50,000 was offered under a condition known as "calderbank": if the judge awards less than the offer, it is withdrawn and nothing is payable. The judge awarded pounds 16,000, calculated on the money Francesca would have made as a ballet dancer, and "gifts" she would have made to her parents. Eileen therefore got nothing.

"Hillsborough set a precedent," she says. "It was deemed that you can only suffer psychological shock if you view the aftermath within an hour of the deaths. This clearly is utter nonsense. The psychological shock took me nine years to get over. When you suffer a tremendous shock, and what can only be described as pathological grief, it renders you incapable of thinking for yourself; people lose jobs and livelihoods. Yet one month after my daughter's death I had to complete a statement of claim, listing expenditure such as the cost of the coffin and the cost of my daughter's ballet lessons."

When, two-and-a-half years after the Marchioness tragedy, it emerged that the hands of the deceased had been removed for finger-printing purposes, Eileen Dallaglio's husband had a heart attack and he was forced to resign from a senior lectureship.

"He worked as a butler to pay the mortgage," says his wife. "And yet police officers affected by disasters retire on their compensation - even though they are paid to do a job that carries an element of risk. It should not be necessary for emotionally crippled people to fight for compensation. The boat was insured to the tune of pounds 6m. No money could ever compensate anybody for loss of life, but why bother insuring lives if the money isn't paid out?"

"Courting Mistrust" attacks not only damages claims, but also fees paid to lawyers, particularly those who work on a "no win, no fee" basis. But for many who seek compensation the legal fees are paid out of damages, however paltry.

Karen Newman, 37, was awarded pounds 10,500 under the Criminal Injuries Compensation Scheme (CICS) after a savage assault by her brother-in-law, but pounds 3,500 was eaten up by fees. Karen failed to win costs, and got no payment for trauma. She no longer works, as the nerve endings in her hands are too damaged. Her brother-in-law committed suicide a year ago.

"I've had to be strong because I've got children," says Karen. "But I can't see myself in a normal working environment again because I don't trust people... I don't even trust my husband 100 per cent, because you can't after what I've been through. I'd known my brother-in-law for 24 years, and look what he did to me. At least I know he won't do it again.

"But it was still decided that it was just my physical health that suffered. I should have got more. People should get compensation because of the loss of earnings, if nothing else. You have to pay the mortgage somehow."

Tamara Wilder, of Victim Support, says the current tariff of payouts under the CICS (which awards pounds 80m a year) is too inflexible. "It's literally so much for an arm, so much for a rape," she explains. "It's like a menu. It can work, but there needs to be room for individual cases to be judged."

When a victim is awarded money under the CICS, their benefits may be adjusted, and some benefits may be eroded to nothing. Wilder adds: "This is all wrong, when you consider it's supposed to be compensation to a victim of a crime, not living costs."