Reining In Ireland's 'Compo Culture'

When the Illinois Supreme Court threw out limits on the amount juries can award in damage lawsuits last December, the president of the state's Manufacturer's Association declared, "The clock is rolled back. Illinois again has a reputation as a litigious state."

Across the Atlantic, Ireland's Defense Minister Michael Smith sympathizes. In his view, "The compensation culture is eating at the heart of our society."

Mr. Smith is waging a war of sorts against 10,000 Irish soldiers who are suing the government, alleging it did not take sufficient care to protect their hearing while they were exposed to weapons fire. While Ireland is a neutral nation, over the past 40 years Irish troops have served in United Nations peacekeeping operations from Cyprus to Bosnia.

Official estimates for the cost of the litigation total about $1.5 billion - equivalent to a full year's social security budget in Ireland.

One running joke in Dublin is that many soldiers didn't even know they were deaf until they heard it on the radio. Public opinion soured further after the first of 16 claimants in another suit against the military received $4,500 in a settlement last month. The group sued over a 1996 incident in Lebanon, in which troops were treated for food poisoning after an Army barbecue.

The lawsuits fuel increasing concern that Ireland's so-called "compo culture" is becoming a national characteristic. While few compensation cases make millionaires of the claimants, awards of up to $150,000 are not uncommon for cases such as tripping on public sidewalks.

Says Prime Minister Bertie Ahern, "The number of claims against everybody and anything is just horrendous in this country."

Many businesses now are taking action to counter possible lawsuits. Joe Collins of the state-owned bus company, Dublin Bus, says the company has been able to hold compensation figures steady at $11 million a year due to "investment in new vehicles and the work of a special investigations unit." The company is one of several state firms that have pooled information on frequent claimants in a database. The companies hope the information can be used to contest allegedly fraudulent claims and reduce payouts.

Savings could be substantial. Local authorities in Ireland's three largest cities - Dublin, Cork, and Limerick - pay about $15 million a year in compensation claims. In the private sector, the Irish Business and Employers Confederation, a national lobbying group, estimates that personal injury claims annually cost Irish businesses more than $525 million. Tony Briscoe of the IBEC's health and safety service says, "Three percent of Ireland's gross national product is spent on personal injury claims every year, which is three times the norm in other European Union countries."

Much of the blame for the rise in the "compo culture" is being laid at the door of lawyers. Since restrictions on advertising by law firms were lifted three years ago, the profession has become more active in seeking out compensation cases. Defense Minister Smith has joined the chorus of criticism being directed at the legal profession, declaring, "The ambulance-chasing seminars, ... placing advertisements outside hospitals - all of that has to be changed."

The Irish Constitution may even be altered by a referendum to make lawsuits in personal-injury cases more difficult, although the exact nature of the change has yet to be worked out.

Smith says this would provide additional protection for Irish taxpayers from "the whims of very bright people who can blast open gold mines for themselves."