United Kingdom >
About Aon UK >
Media Centre 2006
Growing Compensation Culture Poses Major Threat to Profitability and Jobs
New survey of UK companies reveals hard evidence of the growing cost of the claims culture and the resultant damaging drain on management time and financial resources.
London – 27th July 2004 – UK businesses are being increasingly hampered by the costs of dealing with the UK’s burgeoning compensation culture, which in turn is diverting management resources and financial investment away from core business and revenue generating activities. These are some of the main findings from a survey into the compensation culture of UK companies and organisations conducted by Aon, the UK’s leading insurance broking and risk management company, which has found that 75% of those surveyed see the current growing trend as creating an unsustainable burden for industry, commerce and public services.
Recent arguments have cast doubt on the genuine existence of a compensation culture in the UK. A report published in May by the government’s Better Regulation Taskforce argued that the evidence does not suggest an out of control, US style compensation culture, however these new findings suggest otherwise with 62% of companies surveyed seeing an overall increase in the cost of claims to their business.
Additionally, of those surveyed:
96% do not think the government is doing enough to tackle this issue;
60% feel the fear of the compensation culture is hampering their business by distracting management time;
49% said it diverts financial resources and 46% said it creates too much red tape.
Max Taylor, Deputy Chairman at Aon Limited, said: "Whatever the debate around the existence or not of the compensation claims culture in the UK, and our survey shows 62% have seen an overall increase in the cost of claims |
