Money: miracle cure of the Nineties

The compensation system for injury or bereavement has the air of a tragic lottery. But is there any other way? Yvette Cooper reports

No wonder Jimmy McGovern was incensed. Fourteen police officers who suffered stress in the line of duty at the Hillsborough disaster seven years ago are to share pounds 1.2m in damages. Meanwhile, families were offered a mere pounds 2,000 for every relative crushed to death against the wire netting, when police allowed too many fans into the football stadium. So the Liverpudlian screenwriter railed last week against what he saw as the injustice of the awards, crying that "every parent in Britain should demand massive compensation for the Hillsborough families".

The whole process seems horribly arbitrary. A traumatised police officer gets several hundred thousand pounds. The Birmingham Six are offered pounds 400,000 each for 16 1/2 years' wrongful imprisonment. The parents of a murdered 10-year old, according to the tariff established by the Criminal Injuries Compensation Board, are entitled to pounds 10,000 between them, and Strangeways inmates pick up pounds 5,000 each for stress caused by prison riots.

Our pain is packaged and priced by lawyers, judges, civil servants and insurance companies. For Adam Le Roy, tens of thousands of pounds were paltry consolation for two broken legs in a car accident, and the prospect of arthritis as he ages: "You can never compensate for these things - money doesn't really solve problems." Similarly for parents who lose a child, compensation can never bring back a loved son or daughter. The whole idea of putting a cash value on a personal physical injury or loss is philosophically difficult. But given that we want to give something, the important question is whether we can do it fairly. Adam Le Roy believes his own award was "a more or less fair amount", even though it took him five years to win it in the courts.

Sally Williams, 34, was struck down by a drunk driver in when she was 25. She was awarded pounds 10,000 by the Criminal Injuries Compensation Board for six broken bones and the permanent loss of her sense of taste and smell. "At the time, I was so happy to be alive that I thought the money was all right," she says. "But looking back, pounds 10,000 doesn't really compensate for the loss of taste and smell for ever, and when I read about the huge libel payouts people get, I don't think it's fair. I'm probably going to be arthritic in the areas where I broke bones, and I've had food poisoning several times because of my lost senses.

"My solicitor got me the money in about two years, though it didn't really help me. I used it to buy a house at the peak of the housing boom, and then lost lots trying to sell it."

A flick through the tabloid newspapers reveals countless cases that do not accord with their editors' sense of popular justice. Hillsborough is just the start. When convicted IRA bomber Donna Maguire was awarded pounds 13,500 for tripping up on a dangerous Ulster pavement, the tabloids had a field day: what price Donna's inability to wear high heels compared to the suffering of the victims of IRA bombs?

In fact, for all the apparent randomness of the headline figures, damages for injuries are calculated according to complex rules and precedents. How much you walk - or hobble - away with depends not only on the severity of the injury, but also on whose fault it was, how much you earn, and how determined you and your lawyer are prepared to be.

In Dunblane we know exactly who to blame for the murders, the injuries and the traumas. But Thomas Hamilton is dead. And even if he were still alive, there wouldn't be much point in suing him for the damage he caused. In criminal cases such as these, the state steps in - we the taxpayers fork out to compensate victims for their misery and misfortune. But since the beginning of April this year, with Michael Howard acting on our behalf, we have been a lot tighter with our pennies. Now a tariff system operates. If you sprain your ankle when pushed by a mugger, you pick up pounds 2,000. The board will compensate you for lost earnings, too, if your injury lasts more than 28 weeks, but don't get your hopes up too far. The cap on compensation is pounds 500,000.

Donna Maguire had a local council rather than an impoverished criminal to blame. In the civil courts, victims can sue for all kinds of damage, so long as liability or negligence can be proved. And bizarre games ensue, particularly where insurance companies are involved. Nancy Shipman sued her husband for pounds 420,000 in order to get his insurance company to pay up for the injuries and trauma caused by a car accident in which he was driving. In this case, as in other personal injury cases, the cash doled out depended on several clear criteria. First, there are the "general damages", those paid just to compensate for the injury involved. A rough scale guides the judges in their decisions: total paralysis gets more than pounds 100,000, deafness pounds 40,000, and severe post-traumatic stress around pounds 30,000.

Cynics cluck when the injury is psychiatric rather than physical. But post-traumatic stress disorder is a clearly defined psychiatric condition. Experts diagnose it and testify to the consequences for a victim's ability to work. In the Hillsborough case, several police officers have been forced to give up work altogether, because the psychological damage has been so great. Cumulative stress, too, is starting to appear in the courts. Occupational psychologist Cary Cooper, joint author of a new book on stress and litigation, believes this is a growing field. He cites the recent case of social worker John Walker who won pounds 175,000 from his employers, Northumberland County Council, after years of stress and overwork. Professor Cooper believes litigation is not the ideal way to resolve workplace problems, but, as he puts it, "it concentrates employers' minds".

In every one of these cases - whether the damage was physical or psychological - the cash for the injury itself is just a small part of the picture. Most of the money is awarded to cover financial losses in the past and in future because of the injury. Knock over a City analyst with two dependent children, and your insurance company will have to pay out a lot more than for the cleaner you ran down several days earlier.

According to David Body, litigation partner at solicitors Irwin Mitchell, "the purpose of damages is to put someone as near as possible to the position they would have been in before the injury". The fact that the victim's privileged position may have been due entirely to luck doesn't make any difference.

It is one thing to calculate the lost earnings and future care needs of someone who is severely disabled, but what about coping with death? Bereavement is probably the grimmest thing most of us ever go through in our lives. Losing a close relative can take years to get over, no matter how gentle the circumstances. Terrified that awarding damages for grief would open the flood-gates for a never-ending series of claims, the Law Lords have determined strict rules for compensating troubled relatives. Close relatives who watch a loved one die in an accident can claim cash for their own trauma but only in certain circumstances. They must be closely related (no nieces or nephews), and physically present at the time of the disaster. So Peter Vernon was awarded pounds 1.3m for post-traumatic stress (and consequent lost earnings) after he watched his two daughters drown in an accident. But the Hillsborough relatives were denied cash, even if they watched family members die on television. Eyes count, cameras don't.

Sooner or later these rules are bound to change. The Law Commission has already suggested broadening the interpretation of trauma to relatives, and is undertaking a wider review of other aspects of personal injury litigation.

In the end, compensation for personal injury is bound to be a personal and political minefield, as the public react to headline figures, and individuals and insurance companies wrestle through the courts over every hundred pounds. Is it worth it? Karen Harris certainly thinks so. After five years pursuing her local health authority over an illness caused by misdiagnosis, she was finally awarded pounds 20,000. "When I got the money it made a huge difference. It meant I could move on with my life." For Karen, and for many others who pursue their claims through the courts, the purpose is not the cash, it is justice. The Hillsborough families, too, will not be satisfied until they feel justice has been done.

What price suffering?

pounds 3.4 million

Christine Leung was awarded record compensation of pounds 3.4m in March 1994, after a car crash in which she was paralysed from her shoulders down.

pounds 1.2 million

Peter Vernon watched his two daughters drown after the car they were in spun off the road into a river in 1982. Thirteen years later, in February 1995, he was awarded pounds 1.2m by a High Court judge for his mental suffering.

pounds 650,000

After years of wrangling, Ron Lipsius, a musician whose hands were disfigured in the 1987 King's Cross fire, settled for pounds 650,000 from London Transport in January this year.

pounds 205,000

Fiona Boag, a nurse who injured her back while lifting an elderly patient, won pounds 205,000 compensation in July 1994 to reflect the premature end to her career - the largest sum awarded to a nurse with a back injury.

pounds 160,000

A teacher was awarded almost pounds 160,000 compensation in February 1995 for injuries and trauma caused in an assault by a teenage pupil. The size of the award reflected the premature ending by 12 years of the teacher's career because of the effects of the attack.

pounds 147,683

Paul Hale, a fireman who received bravery awards for fighting the King's Cross fire in 1987, was awarded pounds 147,683 damages in the High Court in November 1992, one of the highest awards for a sufferer of post-traumatic stress disorder.

pounds 132,000

Ten-year-old Matthew McDaid, whose arm was ripped off by a chimpanzee at a zoo in Kent seven years ago, was awarded compensation last month for the injury and subsequent mental anguish.

pounds 75,000

In April this year, social worker John Walker became the first man in Britain to sue his employers successfully for damages because of stress at work. Mr Walker claimed that his calls for extra staff and resources were refused despite increasing work, causing him to have a nervous breakdown.

pounds 21,000

Helen Yaffe and Madlyn Ray-Jones were awarded pounds 21,000 damages by the Metropolitan Police in November 1994 after a humiliating strip search in a pub lavatory during a drugs raid.

pounds 4,295

The award to Ray Hall, the police constable shot saving the City from devastation by a massive IRA bomb in November 1992, was condemned as "paltry and insulting" by his family.