IT’S so tempting to see misfortune as a money spinner. Slipped on a grape at the supermarket? Sue!
Stressed out by an overbearing boss? Claim! Hurt your neck in a car accident? Collect!
But here’s something to consider before you speed dial a lawyer – a compensation payout may make life worse.
It’s an odd notion, given Australians claim hundreds of millions each year, much of it from state-run workers compo or traffic-accident schemes.
Yet mounting evidence suggests seeking, and pocketing, a fat payout adds to a victim’s misery.
Studies consistently show injured patients take longer to recover and have worse long-term mental and physical health if they get sucked in to our compo culture.
Recipients are less likely to return to work or study after 12 months than someone who doesn’t put in a claim, even if their injuries are similar.
Academics are divided on why people take longer to get back to normal if there’s even a whiff of possible financial benefit.
Their research into the so-called “compensation effect” strongly suggests such a thing exists. Of 211 academic papers conducted on the topic, 175 found compensation made things worse, 35 found it made no difference, and one found compo had a positive effect.
“Well,” I hear you say, “maybe some people are just malingerers. Or perhaps they’re fabricating pain to milk the system.”
But the research seems to show the effect exists whether a claim is frivolous or entirely worthy. Be it a woman who wants money for toppling over in her high heels at work or a grieving mum seeking a financial salve for the pain she feels after her child’s death.
Even with an injury that can be studied objectively, such as a bone fracture, studies show speedier recoveries in the non-compensated patients, who seem to go home faster and get on with life.
The most satisfied patients, studies have found, are those victims who blame themselves for their misfortune and don’t bother pursuing anyone for retribution.
Conversely, the most dissatisfied with the healing progress, regardless of injury severity, are those with an unsettled compensation claim.
Intuitively, it makes sense.
The adversarial nature of the insurance or court process leaves many victims feeling powerless, adding to their anxiety and stress. And surely all that time preparing for medical tests to prove they’re unwell must chew up mental energy that could be better directed toward making a faster recovery?
But even when the compo scheme is no-fault, and the insurers agree to pick up the tab without need for an army of lawyers, a payout still seems to have a negative influence on recovery.
One theory is those who are having their bills covered fuss around too much with rehab, when they’d be better off at home getting back to normal.
All these findings raise a vital question: are we pouring public money into compensation schemes in the belief they improve lives, when in fact they are adding to the burden of the victims - not to mention our health system and the courts?
Melbourne trauma expert Professor Peter Cameron has written an editorial on the topic to appear in a forthcoming edition of the international journal “Injury”. In it, he argues at the very least we must conduct more research to find out why compensation schemes are such a barrier to recovery from injury.
Given the cost of the schemes is so high, and so many Australians are affected, it’s hard not to agree.
I’m not suggesting we axe the schemes or prevent people pursuing justice through the courts.
Clearly, victims are entitled to be compensated when things go wrong. And in many instances, forcing companies, employers or government departments to cough up when they’ve done wrong is the best way to hold them to account.
We need to frame the schemes better, though, so we’re not harming the people we’re trying to help.
Monash University last month formed a new Institute for Safety, Compensation and Recovery Research – a joint initiative between Victoria’s WorkSafe and the Transport Accident Commission - to start the ball rolling on new approaches to improve outcomes for patients.
They might want to speed things up. It can only be a matter of time before someone sues because their compo payout made their life worse.
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