Fake News and the Compensation Culture – An Access to Justice Investigation

January 12th 2018

‘Fake news’ is the slogan du jour. Donald Trump and his supporters use it to discredit reporting from the MSM, or anyone else who does not support the president’s world view.

Proponents of the alt-right and the far left also use the term liberally to stymie their opponents. To counter this, newspapers and other bodies have created or sponsored ‘fact checkers,’ people whose role it is to sift through the spin and work out the truth.

The Washington Post fact checker announced on 10 January this year that Trump made more than 2,000 false or misleading claims in his first 355 days of office. That’s 5.6 misleading claims per day. (i)

In the UK the Telegraph employed fact checkers during the EU referendum campaign to monitor the statements and slogans of the various Leave or Remain lobby groups, and the sayings of government ministers too. (ii)

Political spin is as old as politics itself. Governments (and corporations) throughout history put the appropriate gloss on their messages in order to frame an issue to suit their purposes.

Take the compensation culture debate. Ask on the Clapham Omnibus whether the UK has a compensation culture and the chances are passengers would agree. Newspapers are chock-full of stories of people exaggerating their injuries. Tabloid editors like nothing better than to catch out a benefits cheat, or a holiday sickness scam.

You could be forgiven for thinking that all 60million of us are on the take, on the look out for opportunities to rip off our poor old insurance company by colliding with other motorists and faking a whiplash injury.  Us Brits and our weak necks. The UK must be the whiplash capital of the world, eh?!

The first description of the UK as a ‘whiplash capital’ was by the ABI (Association of British Insurers). In its 2008 report Tackling Whiplash: Prevention, Care, Compensation the ABI said: “We must also consider why we seem to have such a greater tendency to get whiplash than the rest of Europe. Do we really have weaker necks?” (iii)

The Daily Mail picked up the phrase in its coverage of the report, and then it hit the press again in 2011 when the Daily Telegraph said the UK was the whiplash capital of Europe. (iv) (v)

Politicians got in on the act. Then Transport Secretary Justine Greening said “The UK is the whiplash capital of Europe, and I’m going to stop it” (12.02.12) (vi). Justice Minister Helen Grant MP went even further, claiming the UK to be the whiplash capital of the world. (vii)

Even PM David Cameron was not immune. After a cosy summit with insurer chiefs at Number 10 on 14.02.12, a statement (viii) said the Government would act:

“Britain is now the whiplash capital of Europe, with more than 1,500 claims a day, with people claiming for whiplash injuries sustained in the most minor of incidents; According to the ABI the cost to the industry from whiplash claims is £2 billion, adding £90 to the average premium.” [Figures – inevitably – from the ABI]

Our weak necks had become a matter of national shame. Britain was a laughing stock. Something must be done, and Mr Cameron was the man to do it.

The government duly legislated, and has carried on legislating. Since 2012, 13 separate laws and other measures have been passed to tackle the ‘compensation culture.’ And there are more proposed.

All this government action (which, in case you’ve forgotten, undermines peoples’ legal rights) is predicated on our necks being the weakest in the world.

There is only one problem…… it’s not true.

It’s a piece of spin that has become the bedrock statement in a campaign by insurers to use UK laws to stop people claiming on their policy when they have an injury.

Every time we make a claim, it costs insurers money. Reduce the amount paid out on claims ensures more money for their shareholders (and higher share prices means bigger rates of pay for CEOs).  Simples, as one insurance industry spokesman might say.

Credit must go to Professor Ken Oliphant, the highly respected professor of Tort Law at Bristol University, who challenged the prevailing narrative in 2016 with “The Whiplash Capital of the World”: Genealogy of a Compensation Myth. (ix)

The professor stated, in evidence to the House of Commons Justice Committee, that “Such evidence as there is has been misleadingly and tendentiously presented by participants in the public debate about the alleged ‘compensation culture’. Actually, the same evidence makes clear that, by most measures, the UK is not the whiplash capital of the world or even of Europe.”

The main “supposed evidence” came from a “flawed” study by the Comité Européen des Assurances (CEA) in 2004, he said. “The methodology employed is not stated but anomalies in the results suggest it must have been inadequate for the production of reliable data. Only eight national associations provided data relating to whiplash claims. Even if one ignores these deficiencies, it is apparent that that data do not provide robust support for the ‘whiplash capital’ claims made by the Association of British Insurers (ABI) and others.”

The professor found that Italy has nearly 50% more whiplash claims and pays out more than twice as much in compensation. Look at the average cost of whiplash claims, and you may be surprised to find that the UK only comes in the lower half of the table. In Switzerland, they cost ten times as much per claim.

Take a wider perspective. The same data show that bodily injury claims generally cost more in Italy, Germany, France and Spain than in the UK. In the republic of Ireland, Kevin Thompson, the chief executive of Insurance Ireland spoke in May 2016 about the need for whiplash reform there. (x)

Quoted in the Irish Times, Thompson said: “In Ireland, the average award for whiplash is €15,000. So we have the most expensive necks in Europe.” (xi)

Buoyed by pulling the wool over the eyes of politicians in the UK, insurers are brazenly exporting the ‘whiplash capital’ line around the world. The Irish media reported that a survey from the Irish Brokers finding that Ireland is the “whiplash capital” of Europe, with whiplash accounting for 80% of motor insurance claims versus just 3% in France. (xii)

So which is the whiplash capital? The UK, or Ireland? Or perhaps Canada, where insurers have also highlighted the need for reform and in 2017 pressured the government to do more to crack down on whiplash claims.  Ontario is cited as a particular problem.

According to reports, auto-insurance fraud costs $CAN 1.6bn annually and the State Government Finance Minister, channeling Justine Greening, said: “It’s time to stop it.” (xiii)

Or Australia, where the Queensland Government has been lobbied by insurers “to reform the state’s Compulsory Third Party insurance scheme in a bid to crack down on “rampant rorting.” Rorting is Australian vernacular for ‘sharp practice.’ (xiv)

The insurers don’t let the facts get in the way of a good story. The whiplash capital of world message can be exported to whichever jurisdiction they like, as long as there is a gullible media ready to lap the lie up, and politicians happy to dance to the insurers’ tunes, without reading the lyrics.

Many UK insurers, such as Aviva (Ireland and Canada) operate in foreign markets. Maurice Tulloch, Aviva’s general insurance board member and executive director of international insurance, is a Canadian national who fronted the Aviva campaign in the UK.

It is, therefore, not too much of a stretch to surmise that insurers are exporting UK compensation culture mythology abroad, hoping to hoodwink other legislators into curtailing claimants rights and save themselves money.

Unfortunately the public won’t know what it’s missing (i.e. access to justice when they are injured), until it is taken away, and it is hard for cash-strapped citizens to turn down the promise of big savings on their insurance premium, which is offered by insurers as a quid pro quo for reform.

In fact, in the UK, the savings form the latest proposals to slash the small claims limit for minor RTA injuries amount to 35p per week, according to the government’s own figures, and UK insurers have not been compelled to hand any money over.

For sure, there are people who try it on. There are people who commit fraud against insurers by exaggerating or faking claims. These people must be caught, and punished. Insurance fraud is a crime.

What however, do we make of powerful corporations who manipulate the public and politicians to further their agenda? How can we ever trust them to act in the public interest?

As the ABI’s chief spinner James Dalton has admitted: ‘Insurance has a trust problem.” Well James…..you said it.



(i) https://www.washingtonpost.com/news/fact-checker/wp/2018/01/10/president-trump-has-made-more-than-2000-false-or-misleading-claims-over-355-days/?utm_term=.c3a97f193bc2

(ii) http://www.telegraph.co.uk/politics/0/eu-referendum-claims-won-brexit-fact-checked/

(iii) http://docplayer.net/950767-Tackling-whiplash-prevention-care-compensation.html

(iv) http://www.dailymail.co.uk/motoring/article-1086688/On-road-Ray-Massey-brings-latest-motoring-news.html

(v) http://www.telegraph.co.uk/finance/personalfinance/insurance/motorinsurance/8522985/UK-whiplash-capital-of-Europe.html

(vi) http://www.thisismoney.co.uk/news/article-2096597/Justine-Greening-Britain-whiplash-capital-Europe–Im-going-stop-it.html

(vii) http://insurance.dwf.co.uk/news-updates/2013/07/whiplash-report-transport-select-committee-of-the-house-of-commons/

(viii) https://www.gov.uk/government/news/statement-on-outcomes-following-downing-street-insurance-summit

(ix) https://research-information.bristol.ac.uk/files/80271070/AAM_Whiplash_Capital.pdf

(x) https://www.irishtimes.com/business/financial-services/aig-urges-ban-on-whiplash-claims-to-cut-premiums-1.2548667

(xi) https://www.irishtimes.com/business/financial-services/aig-urges-ban-on-whiplash-claims-to-cut-premiums-1.2548667

(xii) https://www.businessworld.ie/financial-news/86-of-Irish-people-disagree-with-motor-insurance-claims-pay-outs–568670.html

(xiii) http://www.cbc.ca/news/canada/toronto/ontario-fair-auto-insurance-plan-1.4433569

(xiv) https://www.brisbanetimes.com.au/national/queensland/queensland-insurance-companies-call-for-reform-20170827-gy55fs.html