'Chancers are trying it on - compo culture is back again'
Businessman Pat McDonagh has sounded a warning about a new rise in phoney accidents, staged to get money from companies.
The founder of the Supermac's chain of 108 fast-food restaurants is worried that our 'compo culture' has re-emerged. This will mean more people will be unable to afford insurance.
Mr McDonagh has noticed that claims come from clusters around the country, and where certain legal firms are based.
"Of course you're going to have accidents in business. That is just a fact of life," he said.
But he is concerned a number of the claims his business gets are fraudulent, fake accidents where chancers are trying to get a pay-out.
He said that 12 to 14 years ago he was getting many claims for personal injuries. The businessman warned that the compo culture is again in full swing. This is due to several factors, including increased pay-outs in the courts.
And he claimed some lawyers coach clients to make questionable cases more presentable.
In 2004, the Civil Liability and Courts Act came into force, containing a radical provision in Section 26 whereby a fraudulent claim could be dismissed outright.
Mr McDonagh believes this regulation is no longer fit for purpose.
"[The Act] was intended to reduce the legal cost involved with a claim, gearing the parties involved in a genuine claim case towards settlement," he said.
"But then the legal professionals advised their clients that they could get more for them in court rather than settling so this was no longer effective."
According to Mr McDonagh, this has in turn raised legal costs and any other related costs - and pushed more cases into the High Court because the award and the claim has become higher and more serious.
"Because the costs have gone up so much in the courts, this has encouraged insurance companies to try to settle cases," said Mr McDonagh.
All of this has contributed to the compo culture today where claimants are exaggerating their claims by as much as 50pc.
"What that leads to is people not willing to get or unable to afford insurance," he said.
"This kind of claim culture doesn't happen to this extent in the UK or on the continent."