The Socio-economic Consequences and Effects of Compensation Culture

Mirshekari, Abbas; Abdi, Mona; Maleki, Nafiseh

doi:10.48308/eclr.2024.237088.1086

The Socio-economic Consequences and Effects of Compensation Culture

Document Type : Original Article

Authors

abbas mirshekari ¹

Mona Abdi ²

Nafiseh Maleki ³

¹ Asistant Professor of Law Tehran university.

² دانش آموخته دکتری حقوق خصوصی دانشگاه شهید بهشتی.

³ Ph. D Candidate. Faculty of Law & Political Sciences, University of Tehran, Tehran, Iran.

https://doi.org/10.48308/eclr.2024.237088.1086

Abstract

The great desire of citizens of a society to file a lawsuit and claim damages for any matter, even minor or unreasonable or dishonest, and becoming this behavior to a widespread habit and a common cultural norm has caused the creation of a phenomenon called "Compensation Culture" which can be identified in different time frames by comparison with the number of lawsuits filed in macro scale in the society. From the beginning, when this issue was raised in the England and American legal system, it had supporters and opponents who emphasized the positive and negative effects of this phenomenon. In order to better understanding the importance and necessity of studying this subject in every legal system, it is appropriate to introduce these effects in the first step. This article explains these economic and social effects with a descriptive and analytical approach. The findings of these studies show that although increasing claiming for damages in society has negative effects such as increasing financial and social costs, excessive risk aversion and uncertainty and spreading the culture of blaming others, it also has positive effects such as increasing responsibility and evaluation risk, improving safety and health levels for production and achieving the goals of civil liability law which cannot be easily neglected. Therefore, in order to benefit from the positive effects and prevent the negative effects, the role of legislators in codifying and legislating effective rules is very important.

Keywords

Risk assessment

responsibility

safety and health

civil liability goals

compensation culture

Books
1. Abel, Richard and Kritzer, Herbert, English Lawyers between Market and State: The Politics of Professionalism 'The Fracturing Legal Profession: The Case of Plaintiffs' Personal Injury Lawyers, vol: 8, Oxford Socio-Legal Studies publication, 2003.
2. Badini, Hassan, The Philosophy of Civil Responsibility, Enteshar co, 1^st edition, 2005. (in Persian)
3. Barnes, David and Lynn Stout, The Economic Analysis of Tort Law, West Publishing Co, 1392.
4. Quill, Eoin & Raymond Frriel, Damages and Compensation Culture: Comparative Perspective, Bloomsbury pub, 1^st edition, 2016.
Articles
1. Badini, H, “A Critical Study of Rescannable and Ordinary Person for Detrmining Fault in Tort Liability”, Private Law Studies Quarterly, vol: 40, Issue. 1, 2011, pp 73-93. (in Persian)
1. Badini, H, “Comparative Study of Reparability of Economic Loss in Tort Law”, Private Law Studies Quarterly, vol: 41, no.1, 2012, pp 59-78. (in Persian)
2. Badini, H, “Policies Governing the Concurrent Application of Systems of Compensations (Tort Law, Private Law, Insurance and Social Security)”, Private Law Studies Quarterly, vol: 38, no. 2, 2009, pp 39-68. (in Persian)
3. Badini, H, “The Philosophy of Civil Responsibility”, Law and Political Sciences, vol: 66, no. 520, 2004, pp 55-113. (in Persian)
1. Badini, H, Abbasi, S, “Assessment of the Preventive Effect of Tort Law and Safety Regulation in Hazardous activities”, Judicial Law Journal, vol: 81, no. 99, 2017, pp 31-58. (in Persian)
2. Ennis, Maeve & Vincent, Charles, “Medical Accidents and Litigation”, Journal of Law and Policy, vol: 16, 1994, pp 97-121.
1. Gholi pour, A, Abooyee Ardakan, M, ghalibaf Asl, H, Asadi, A, “Deployment of Risk Culture In Financial Institutions, Journal of Risk Modeling and Financial Engineering, vol: 2, no. 1, 2017, pp 42-59. (in Persian)
1. Hand, James, “The Compensation Culture: Cliché or Cause for Concern”, Journal of Law and Society, vol: 37, no. 4, 2010, pp 1-18.
1. Izanloo, M, Asadi, Z, “Comparative Study of the Dual Functions of the Precautionary Principle in Civil Liability”, Comparative Law Review, vol: 10, Issue 2, 2019, p 407-428. (in Persian)
2. Jabari, H, “Socio-Economic Development: Two Faces of a Coin”, Refah Journal, vol: 3, no. 10, 2003, pp 55-80. (in Persian)
1. Lewis, Richard and Morris, Annette, “Tort Law Culture: Image and Reality”, Journal of Law and Society, vol: 39, no. 4, 2012, pp 562-592.
2. Morris, Annette, “Spiraling or Stabilizing? The Compensation Culture and Our Propensity to Claim Damages for Personal Injury”, The Modern Law Review, Vol. 70, no. 3, 2007, pp 349-378.
1. Mostafavisani, A, Nematy, M, “The Pathological Analysis of Regional Balanced Development in National Development Plans”, Quarterly Journal of Fiscal and Economic Policies, vol: 7, no. 26, 2019, pp 31-69. (in Persian)
2. Nouvoo E, Emeli Z, “The Principle of Precaution aa a Sign of Mentality and Needs of Postmodern Man”, Shinakht Journal, vol: 2, no. 61, 2009, pp 121-146. (in Persian)
1. O'Sullivan, Lauren, “Money for Nothing and Cheques for Free: Negligence and the Perceived Compensation Culture”, UK Law Student Review, vol. 2, no. 1, 2014.
1. Shoushi Nasab, N, “Assessment of Pain and Suffering Damages”, Public Law Research, vol: 13, no. 33, 2012, pp 101-136. (in Persian)
1. Williams, Harriet Ann, “Compensation Culture: A Storm in a Coffee Cup”, Southampton Student Law Review, vol: 1, no. 1, 2011, pp 45-67.
2. Williams, Kevin, “State of Fear: Britain's Compensation Culture Reviewed”, Legal Studies, vol. 25, no. 3, 2005, pp 499-515.
Reports
1. AON Report, “Blame, Claim and Gain: The Compensation and Blame Culture, Myth or Reality?”, 2004. (last visited 23/08/2023).
2. Baroness, Ashton, “Written Ministerial Statement - House of Lords”, Department of Constitutional Affairs. Retrieved 20 March 2008. Available at: http://www.dca.gov.uk/legist/compensation_wms_lords.pdf. .(last visited 23/08/2023).
3. Broughton, Jonathan et al, “The Cost of Compensation Culture, The Institute & Faculty of Actuaries”, December 2002, P: 68. Available at: https://www.actuaries.org.uk/system/files/documents/pdf/lowe.pdf. .(last visited 23/08/2023).
4. Caranta. R, “The Precautionary Principle in Italian Law”, Precautionary and Administrative Law XVLL congress 16-22 July, Michel, Bruxelles, 2007 (last visited 23/08/2023).
5. Lord Young, “Common Sense Common Safety: Report on Health and Safety Laws and the Growth of the Compensation Culture”, 2010 (last visited 23/08/2023).