A report, Robbing the Victims, published today, shows that in 1993 unions won £335m in legal damages for their members in compensation for occupational injury and ill health, but that the Department of Social Security took back £36m from damages,
Under the 1989 Social Security Act, the DSS set up a Compensation Recovery Unit (CRU) to reclaim state benefits paid to victims of accidents, medical negligence and industrial diseases who had won more than £2,500 in legal damages from personal injuries claims.
As the Independent revealed yesterday, the DSS has reclaimed £280m from 120,000 people since the system was introduced in September 1990. In many cases the money reclaimed was intended to compensate the victim for pain, loss of future earnings and the cost of future care.
A campaign to reform the CRU is gaining momentum as lawyers, protest groups, insurance companies and MPs argue the system is unfair and causing hardship to thousands each year. More than 200 MPs have signed an early- day motion, tabled by Tony Worthington, Labour MP for Clydebank and Milngavie, calling for the CRU to be abolished. The Commons Social Security Select Committee is holding an inquiry into the operation of the CRU, which could become as unpopular as the Child Support Agency.
In written evidence, the TUC claims people are being pressured into accepting damages of £2,500 or less and not fighting for higher damages which could then be clawed back. The TUC says the Government would be £35m a year better off if the DSS reclaimed only 70 per cent of benefits, instead of 100 per cent, as more people would pursue action for higher damages. However, the TUC argues the system should be scrapped altogether and lists examples in which almost all damages have been handed back to the CRU.
In one case, a manual worker suffered a back injury. A court awarded him £18,000 in damages. But by the time the case was settled, he had received £17,000 in benefits and received only £1,000 from the court case. In another case, a labourer developed a prolapsed disc. He was retired on medical grounds and his union fought a case based on the negligence of his employer. The case was valued by his solicitor at £23,000. But, by the time the case came to court he had received £21,000 in benefits, so he settled for £2,500, which was more than he would have received after reclamation.Reuse content