Firms don't have to give in to compensation claims

The belief in 'compensation culture' is so ingrained that firms will sometimes give in to claims they could successfully defend because they fear the court system is biased against them. Marcus Brown says a recent case shows that such fears are unjustified.

A myth has developed over the last 10 years that we live in a compensation culture in which a tiny mistake could see a firm being sued for hundreds of thousands of pounds.

Thankfully, like all myths, this is simply not true. A few sensational stories about extravagant employment or injury claims may sometimes hit the headlines but they rarely turn out to be accurate and are certainly not typical.

As long ago as 2004, the Better Regulation Task Force conducted a study into compensation culture and concluded that it didn't exist. If anything, the overall number of claims was going down rather than increasing.

That did little to dislodge the myth, however, which is unfortunate because it can affect the way firms approach employment tribunals or health and safety matters. Unfortunately, many firms will cave in and settle when faced with claims because, according to a recent CBI survey, they believe the justice system is ineffective or skewed against them.

It is important, of course, to pay due attention to safety issues and ensure all the correct legal procedures are followed when dealing with staff and customers, but firms should not be afraid to defend claims where appropriate.

A recent case before the Court of Appeal shows that companies can stand their ground and win.

It involved a supermarket customer who tripped over a basket which had been discarded near the check-out counter. She fell and sustained a painful shoulder injury.

The woman sued alleging that the supermarket had been negligent. The Court of Appeal, however, rejected her claim for compensation.

The court accepted the supermarket's evidence that it had good safety measures in place and had done all it reasonably could to prevent accidents happening.

The area was checked for potential hazards every five minutes or so. It was likely that the stray basket has been discarded by another shopper and had only bee left there a very short time.

The court also accepted that the staff were trained to remove stray items and so it was difficult to see what more the supermarket could have done to prevent the accident.

The customer's argument that a member of staff should have been assigned to check all aisles to identify hazards was setting too high a standard when other safety measures were already in place.

In any case, even if such a person had been employed, the accident could still have happened.

This common sense approach by the court system is the norm when dealing with compensation claims. Firms should not be afraid to defend a case if they have done nothing wrong. It is cheaper and far more satisfying than simply caving in to unreasonable claims.

For more information please contact Marcus Brown on 0115 947 0641 or email mbrown@andersonssolicitors.co.uk

Businesses urging key executives to sign pre-nups

There's a growing trend for businesses to ask key executives to sign pre-nups before marrying, according to Nottingham lawyers.

The aim is to protect the company against the disruption that could be caused if equity partners or directors are forced to sell their shares to fund a future divorce settlement.

Sarah Perkins, of Andersons Solicitors in Nottingham, said the move made prefect business sense even though it may appear as an intrusion into a person's personal affairs.

"Firms don't want to find that a director suddenly has to sell their interest in the business because it could be very damaging and destabilising - especially in difficult trading conditions like those we're experiencing now.

"That's why many firms are putting gentle pressure on equity partners to sign a pre-nup to ensure a financial settlement that doesn't lead to panic measures involving the business.

"Some company owners are also asking their children to draw up pre-nups. This is seen as a way of protecting family interests many years down the line after the children have inherited business."

The increased interest in pre-nups follows a landmark ruling in the Supreme Court in October involving Katrin Radmacher, who is the heiress to a multi-million pound family business. The court upheld a pre-nup agreement which limited the amount of money she had to give her former husband.

The ruling established that pre-nups are enforceable in the UK as long as they are properly drawn up and fair to both sides.

For more information call Sarah Perkins on 0115 947 0641.