Poisoned Chalice? A Critical Analysis of the Evidence Linking Personal Injury Compensation Processes with Adverse Health Outcomes

By Grant, Genevieve; Studdert, David M. | Melbourne University Law Review, December 2009 | Go to article overview

Poisoned Chalice? A Critical Analysis of the Evidence Linking Personal Injury Compensation Processes with Adverse Health Outcomes


Grant, Genevieve, Studdert, David M., Melbourne University Law Review


[Do injured persons whose injuries render them potentially eligible for compensation under social insurance schemes experience worse health outcomes and slower recoveries in the medium to long term than persons with similar injuries that are not covered by compensation schemes? Epidemiologists and health services researchers have probed that question since the 1970s, but interest in it has accelerated sharply in the last decade. A substantial body of empirical literature now exists to support the existence of a link between compensation status and health outcomes. A strand of that literature specifically implicates the role of compensation processes, lawyers and adversarialism in producing or perpetuating ill health among claimants. This article critically reviews research into the compensation health relationship. Systematic methodological weaknesses are identified in the research in particular, the inability to come to grips with the legal contours and realities of compensation processes. We conclude that, although there are important gaps in the evidence, the research raises profound questions about the impact of compensation processes on claimants' health. Legal professionals and policymakers must take these questions seriously. The involvement of legal scholars in multidisciplinary research may improve the quality of the evidence base and facilitate appropriate policy interventions.

CONTENTS

Introduction
II  Epidemiological Evidence of an Association between Compensation and
    Poor Health Outcomes
      A The Catalysts
      B Deconstructing the CSE: From General Association to Specific
        Mechanism of Action
      C An Anatomy of LAPE Research
III The Health Impact of Legal and Administrative Processes: Methods and
    Findings in the Epidemiological Literature
      A Comparison of the Health Outcomes of 'Litigating' and
        'Non-Litigating' Injured Persons
      B Comparison of Cohorts of Claimants Pre- and Post-Law Reform
      C Assessment of Multiple Claim-Related Variables within Broader
        Analyses of Predictors of General Health after Injury
IV Methodological Problems with the LAPE Literature
      A The Fallacy of Claim Classification and 'Legal Exposure'
        1 Inter-Scheme Variability in Exposures
        2 Intra-Scheme Variability in Exposures
     B The Fallacy of Legal Services Delivery
     C The Fallacy of Law Reform Aggregation
V  Wanted: Legal Scholars, Now
VI Conclusion

1 INTRODUCTION

Compensation schemes for personal injury are prominent features of the legal landscape in many developed and middle-income countries. In Australia there is considerable variability in the focus and coverage of these schemes across jurisdictions: work-related injuries, (1) transport accidents, (2) sporting mishaps (3) and criminally inflicted injuries (4) are all covered in part or in whole by schemes that incorporate either civil liability, no-fault compensation or a combination of the two. These schemes, as their enabling legislation makes clear, are intended to expedite and streamline compensation processes, minimise costs to society and deliver just financial compensation to the injured. (5) Some schemes also seek to deliver tangible public health benefits by promoting safety and advancing claimant rehabilitation. (6)

Over the past three decades, a series of epidemiological studies have tested the relationship between the health outcomes of claimants in personal injury compensation schemes and a range of potentially influential factors. Taken together, these studies suggest that 'compensation status' (variously defined as the receipt or the pursuit of compensation in connection with an injury) is negatively correlated with health outcomes following injury. (7) There is considerable debate and uncertainty about the mechanism of this association, which, for ease of expression, we shall refer to hereafter as the 'compensation status effect' ('CSE'). …

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