The Recovery of NHS Costs in All Cases Involving Personal Injury Compensation

EEF responded to the initial consultation on this issue which took place 2 years ago.

In our comments on these current proposals we focus on the impact which we believe these regulations may have on manufacturing industry. Whilst we do not challenge the ‘Polluter Pays’ principle which is said to underlie these proposed changes we do question whether this objective can be achieved. The regulations are focused on recovering NHS costs primarily through the route of insured compensation. Whilst we recognize the attraction of this route, because it builds on the existing arrangements in respect of road-traffic accidents, it fails to recognise that due to the very nature of any insurance system, namely pooled risk the perpetrator(s) of a compensatable event; (the insured) does not have to pay for the full consequence of his actions. It is curious that whilst claims are made in this consultation document regarding the positive impact which it is believed these proposals could have on health and safety performance there is no supporting evidence brought forward to suggest that this has been the experience with cost recovery from motor insurers.

The current proposals contain 2 very significant improvements over those made in 2002. These are;

diseases will be outside scope, and

contributory negligence can be taken into account

Comments made in Annex ‘F’ – Regulatory Impact Assessment of the consultation document, suggest that the government may defer taking these powers as they relate to Employers Liability Compulsory Insurance due to the fragile nature of the market for this class of insurance. A recent survey of our members found an average increase in cost of this insurance at the last renewal was 23%. This significant price rise follows 2 preceding years with even greater rises were seen. We urge government to indicate that it will not take these powers and impact on insurance costs until stability returns to this market.

Many of the questions asked in the consultation are understandably addressed to those directly involved in the insurance and legal professions. We have therefore limited our comments to specific issues upon which we have views.

EEF Consultation Response