Beware of unregulated financial incentives

What do we conclude? There are always genuine claims that deserve to be compensated. Fascinatingly, Datamonitor reported that the number of claims reported to the Compensation Recovery Unit in fact fell by 7% in 2002. Government figures for 2002-3 show that the number of disease claims fell by 26% and employers’ liability claims by 16%. Yet the costs of individual claims are rising, and socio-legal mechanisms can also encourage undesirable behaviour. The Association of British Insurers report that £1.47 is paid out in claims for every £1 received in premiums.