Anton Savage: We have a cottage industry in people making compensation claims

Originally published in the Business Post.

A judge this week threw out a case taken by two women against a taxi driver and his insurer, Allianz. The women alleged the driver was on his phone and not paying attention when he rear-ended a white van in front of them. The impact, they said, was so severe they were left with ongoing medical issues, pain, suffering and trauma.

The judge was not convinced. “I don’t find them to be credible and I am satisfied it was highly unlikely that a collision occurred,” he said, and went on to dismiss the case, awarding one set of costs to the defendants.

All of this sounds like a win for justice, but it only seems that way because it is so relatively rare to see this kind of claim litigated to this point. The reality is that there is still a huge cost on the defendant and on the insurance company.

Fighting claims takes time, money, effort and commitment. And if you’re a single individual - as opposed to a large insurance company - it brings with it huge stress and emotional strain, as well as days lost to making statements, dealing with solicitors and ultimately showing up in court. There’s no compensation for that.

The judge may find allegations incredible, but he can’t add “I am satisfied that it is highly unlikely that a collision occurred, so I’m gifting you ten grand to make up for the time lost and stress endured”.

Nor can the judge turn to a plaintiff he finds incredible and hand out a penalty. The theory goes that punishing people for taking questionable legal actions would have a chilling effect on the system and might deny justice to real victims with evidentially weak cases. Which is all well and good, but it leaves a huge unaddressed problem - we have a cottage industry in people making compensation claims.

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