Prince Charles, in one of his leaked letters to the Lord Chancellor, complained that the relatively recent extension of human rights law and, what he sees as the associated rise of US-style litigiousness in the UK, is "a threat to the ability of a society to function in a balanced way, which alone can safeguard truly civilised values." How a wider application of basic human rights can be seen as uncivilized is unclear. Nonetheless, this intrinsically conservative desire to maintain a "balanced way" seems to be widely held in the UK, even by those who benefit to a far lesser extent from the current status quo than Prince Charles.

Few people have argued that this US compensation culture is positive and should be viewed as a sign of a healthy society whose citizens are knowledgeable about their rights and are sufficiently empowered in the majority of instances to ensure that they are not breached. This is certainly a view that we hold and tire of instances both here and in the US of people arguing against this armed with a list of well-publicised exceptions.

Why is FRA qualified to comment on a) why US style compensation is not bad per se and b) why the current UK system is letting so many people down? We are an Anglo-Amercian company providing litigation support to parties involved in complex and often multi-party litigation. Typically, we work with plaintiffs and their lawyers in building classes of plaintiffs, calculating the optimal settlement amount and subsequently designing, building and implementing claims validation and processing systems. In short, our systems ensure that legal victories translate into prompt and equitable compensation for victims. This is an established business area in the US but is still in its infancy in the UK - in fact we are not aware of any other company offering comparable services in the UK. We have been operating in both the UK and the US for the past 3 years - probably two of the most complicated actions we are currently involved in are in fact US sourced:

For the German Slave Labour project, our systems have provided the infrastructure to pay out USD 500million in compensation to over 120,000 victims since August 2001 In the UK we are building systems to manage Part-time Workers Pensions Access claims and we have been instrumental in establishing the John Palmer action group which plans to secure compensation for several thousand timeshare fraud victims.

To date, our experience in the US has been markedly different to that in the UK. The UK legal infrastructure does not have a good history of turning legal victories into mass compensation awards - in short it is usually difficult to provide the necessary impetus and structure required to facilitate real access to justice in such cases - i.e. making sure that the all eligible victims receive compensation cost effectively. Whilst of course there have been claims that have succeeded, there has been a long history of failed mass actions in the British Courts. The list starts withthe Benzodiazapine litigation (£40M spent on legal aid and not a single person paid out) and continues through severalother failed claims where tens of millions of Pounds of legal and administrative fees have yet to translate into meaningful compensation payments despite several years of work. These include:

Equally, the self-regulation and occasional fine put in place regarding instances of financial insitution misconduct (e.g. pensions misselling, can one really argue that the compensation paid out really reflects the profits made from this practice?) seem at best half baked and provide little comfort that the growing list of wide-scale misconduct will be dealt with in any sensible, cost-effective or equitable way - e.g.

It appears primarily that mass litigation in the UK tends not to be commercially driven - or perhaps better put, end-driven; the end being the successful claimant receiving equitable compensation rather than a positive judgementAfter all, claimants sue for money and not for being proven right. In the US this is certainly the case, as the lawyers' fees in a class action are usually structured as a percentage of the award amount and as such the lawyers interests are significantly aligned with those of the plaintiff. Equally, costs are borne by each side so it is in the interests of the lawyers to keep their own costs under control and spend their time and resources as effectively as possible. Some might argue that this will encourage lawyers to pursue opportunitistic claims using opportunistic methods. But remunerating lawyersbased purely upon the hours worked rather than the result achieved (incl. "no win no fee" or legal aid arrangements) does not in itself preclude this sort of behaviour.

• An institutional dislike of "litigiousness" amongst many lawyers and policy makers. There is a fairly strong feeling in government that "too many people claim for too much" in the US, and that this is a road down which we do not want to travel;
  
• The strong influence of the general insurers. As everyone realises, and only in part as a result of their own doing, general insurance is going through a torrid time at the moment because (a) their investments have suffered with the falls in the stock market, and (b) the number of people making claims (especially in the personal injury market) has grown vastly in recent years. Whilst there is no doubt that the vast majority of these claims are genuine, the effect on the insurance companies of the rise of "no win, no fee" claims has been to increase their exposures greatly (and in many cases for old claims the insurers thought they could put behind them). They have little choice (except when solvency rules are relaxed) but to pass these increased costs on to their policyholders via premium hikes. Insurers also have a natural inclination to blame increasing claims rather than bad investment returns and/or management for these premium rate increases. Thus, the Department of Trade and Industry (which represents both the insurers along with the Treasury and the businesses who pay premiums) and the Department of Transport (which represents the premium paying motorists) are heavy lobbyists against any measures which could increase civil claims;

Some may argue that the lack of US-style litigousness in the UK is a good thing - arguments such as this are often supported by much favoured but misleading (because these are the exceptions and not the rules) examples of excessive awards across the Atlantic. The very specific issue of punitive damages is often the most frequent point of focus for British detractors. This attitude frequently leads to sophistry - e.g. a woman in the US is awarded $28 billion compensation for smoking-related diseases - therefore all US-style or even mass compensation is bad.

There is no question in my mind, as someone who works on both sides of the Atlantic on complex mass claims, that US citizens have far better access to justice than their UK counterparts and that US companies, accordingly, are better at handling their liabilities (both after the event and pre-emptively) - which must be a good thing. If we do feel that increasing access to justice in UK is a good idea for genuine victims as opposed to opportunists, what we need to do is look at the US system with an open mind and analyse how it is possible in the UK to reduce the administrative costs associated with compensation claims by ensuring that actions and their settlements are properly managed.

It is possible to do this, to an extent, using the existing infrastructure in the UK as evidenced by our role in the John Palmer action (www.irwinmitchell.co.uk) which has the key characteristics that make a mass action viable in the UK - i.e.: