The Ultimate Guide to all Types of Compensation

Introductory Guide to Compensation

What is compensation?

Everyone knows the old saying that 'life is unfair'. However, if an unfair incident (legally known as a 'tort') causes you significant consequences, there's often the possibility of compensation, especially if the negative event was avoidable and caused by someone else's mistake. Compensation, also known as 'indemnification' or 'damages', is like a financial band aid to help repair the metaphorical (or literal) wound caused by the incident. Yes, life is often unfair, but when somebody else's negligence renders you traumatised, homeless or with life-changing injuries, it's only right and fair that they should take responsibility to help you get back onto your feet.

This guide to explains everything you need to know about all the main types of compensation. Read on to section 2 of the guide to find out why compensation is a necessary part of the legal landscape.

What is the purpose of compensation?

The key principle of compensation is to help the victim or injured party (technically known as the plaintiff) restore the conditions which existed prior to the incident. This includes any types of repair or restoration needed to correct the problem, for example, the cost of rebuilding a house which has been burned down, a financial lump sum equal to earnings lost through time off work, or the fees to pay for physical therapy needed to correct an injury.

Another important function of compensation is the deterrent effect. Businesses, drivers, medical practitioners and all types of people and organisations are more likely to take care over their responsibilities if they know they can be held financially accountable for mistakes.

Compensation also serves as a gesture of apology and goodwill.

Read on to section 3 of the guide to find out what types of compensation exist.

What forms can compensation take?

There are two broad types of compensation. The first type is called compensatory damages, and it aims to bridge the gap of whatever money has been lost as a result of the incident (the tort). They take into account what has been lost already, and what is likely to be lost in the future as the result of the mistake. For example, causing a disability through injury is likely to require compensatory damages for medical expenses, adjustments to the home to make it accessible for the resident, and loss of future earnings if the claimant is no longer able to work.

The second type of compensation is called punitive damages. This type addresses the 'apology' aspect of compensation, and is only necessary where there has been unacceptably reckless or even malicious behaviour, as opposed to a more everyday, genuine mistake. It acts as a punishment for the defendant's actions or negligence.

Read on to section 4 of the guide to find out how courts decide how to issue compensation.

How is compensation awarded?

Compensation can be awarded in four different circumstances.

Special damages aim to address any types of financial loss suffered as a result of the incident, or tort. Any expenses incurred as a result of the tort are covered by special damages. This sum can be calculated very reliably by considering what physical damage has occurred, e.g. using car repair invoices or medical bills.

General damages can be described as injury compensation, as it addresses all types of physical or mental damages sustained, which have an impact on quality of life. This is a more complex calculation, because quality of life can be subjective, especially when attempting to accurately measure the extent and implication of mental health problems. Physical injuries are easier to assess as they often have a typical compensation figure associated with different types of bodily injury (see Typical payments).

Interim damages describes a down-payment of compensation to help the injured party while the legal proceedings take place, as the compensation process can often take a long time (especially in types where the defendants dispute the allegations). These will usually only be awarded in cases where the outcome seems quite certain, and the payment will relate to the projected living costs in the time period before the award is made.

Provisional damages are payments made to account for potential losses in the future, as some types of physical injuries progress over time, and would not be fully developed at the point of compensation. These will relate to the individual's circumstances, taking into account their age, previous salary etc.

Read section 5 of the guide to learn what steps to take to begin a case for damages.

Before making a claim

If you believe you are the injured party of a genuine tort, there are several steps you should take, no matter what type of damages your claim relates to.

Read section 6 of the guide to gain an understanding of the court process.

Going to court

The idea of initiating a lawsuit might seem intimidating or overwhelming, so this brief overview aims to give you a guide of what to expect.

A compensation claim is generally a civil case. While some types of tort might overlap with criminal law (such as causing death by dangerous driving), other types are not necessarily crimes.

In the US, a civil lawsuit begins when you file a complaint. The court should receive a copy, and the defendant should be "served" a copy, meaning it is delivered in a formal, person-to-person process. There is a filing fee to pay, for which the plaintiff is responsible, although it is possible to have the fee removed in cases where the plaintiff cannot afford to pay.

Your complaint should include details of the problem: what harm or damage has been caused? It should explain why the defendant is to blame for these consequences. Finally, it should request that the court of jurisdiction orders relief on your behalf. Bear in mind that this relief may not always take a financial form, although it is likely to in cases where direct loss of expenses or income can be proven.

In some case types, there will be a mutual fact-finding mission, called "discovery". Information, documents and witness details are shared between both parties, in order to prepare for the case.

Judges generally encourage parties to reach a settlement before trial becomes necessary. If such an agreement cannot be reached, even through a mediation process, then the trial will go ahead. A jury trial can be requested by either the defendant or the plaintiff, and will be granted. Otherwise, it will be a "bench" trial, with no jury.

Once in court, anyone giving evidence will be required to swear an oath to assure complete honesty. Witnesses will only be brought into the courtroom at the point they will be speaking, to ensure their statement is not influenced by anything else they have heard. After the process of evidence giving, and questions asked where necessary, there will be a closing argument from each side.

In a bench case, the judge will decide whether the defendant is at fault, and what sum of damages should be paid. In a jury case, the jury makes this decision.

The process for a civil lawsuit in the UK is a little more complex. Before serving a summons, the plaintiff must reach out one final time to give the accused an opportunity to resolve the matter. This is known as the 'letter before action', and it must include certain elements to be considered valid.

There are filing fees, but people on low incomes can have their fees reduced or waived. The claims forms can be submitted online where the sum is less than £100,000. Your forms will need to indicate a ball-park figure of compensation requested, so that an appropriate court can be allocated (generally, the High Court works with figures above £50,000).

The court will serve the papers to the defendant, who can then respond in a number of ways:

If the response does not resolve the issue, a judge will decide whether the case needs to go to court. In some cases, they may be satisfied by the documents provided and grant a decision without a hearing. In other cases, it may be some months before the hearing can take place.

Claims for less than £10,000 will take place in an informal small claims court, a small room with none of the dramatic costume and ceremony of a traditional courtroom. The plaintiff will be able to bring a friend, colleague or union representative for moral support. At the end of the hearing, the judge decides in favour of one party, and issues any relevant orders, e.g. for a specific amount of compensation to be paid. If the plaintiff wins, they may have their court fees paid as part of the reimbursement, but only if they have been cooperative with the defendant's negotiations throughout.

Read section 7 of the guide to see what kind of payments are typical for different types of injury.

Typical payments

When calculating general damages, loss of potential earnings is based on an individual's salary and stage of life. There are, however, average figures awarded for loss of use of each body part, which sets a precedent for assessing similar injuries in other cases.

Compensation awarded in the US varies enormously due to the difference between states (workers' comp figures show that Nevada can award up to $859,634 for the loss of an arm, while Alabama's upper limit is just $48,840). It is therefore worth researching the guidelines in your own particular state. The figures listed here are averages calculated across states, so the actual sum may be significantly higher or lower at each end of the spectrum.

Maximum payments for complete loss of an individual body part:

Complete loss of an Arm

$169,878 (USA guide using state average)

£214,250 (UK guide figure)

Complete loss of a Leg

$153,221 (USA guide using state average)

£201,500 (UK guide figure)

Complete loss of a Hand

$144,930 (USA guide using state average)

£144,000 (UK guide figure)

Complete loss of a Thumb

$42,432 (USA guide using state average)

£35,000 (UK guide figure)

Complete loss of an Index Finger

$24,474 (USA guide using state average)

£12,000 (UK guide figure)

Complete loss of a Middle Finger

$20,996 (USA guide using state average)

£10,000 (UK guide figure)

Complete loss of a Ring Finger

$14,660 (USA guide using state average)

£9,000 (UK guide figure)

Complete loss of a Pinky Finger

$11,343 (USA guide using state average)

£8,000 (UK guide figure)

Complete loss of a Foot

$91,779 (USA guide using state average)

£144,000 (UK guide figure)

Complete loss of a Big Toe

$23,436 (USA guide using state average)

£37,000 (UK guide figure)

Complete loss of an Eye

$96,700 (USA guide using state average)

£35,000 (UK guide figure)

Complete loss of an Ear

$38,050 (USA guide using state average)

£64,800 (UK guide figure)

(Figures from Law on the Web, Propublica and true.co.uk)

Read the Debates around compensation section to find out more about attitudes to compensation.

Debates around compensation

Some members of society support the idea of "tort reform", the concept that limits should be imposed on compensation claims. They believe that some people abuse the system, and that individuals and businesses unduly suffer as a result of paying compensation. They may talk in broad terms about "ambulance chasers", referring to lawyers who pursue trivial accident claims for the financial gain.

In spite of this opinion, the view that we live in a "compensation culture" is not supported by any hard evidence, and can be attributed in part to media exaggeration.

The only just and fair alternative to compensation would be a social security system in which all citizens are protected by a universal insurance scheme. Under this system, everybody would receive appropriate reimbursement, regardless of where the fault lies. New Zealand pioneered this equal approach, which aims to reduce litigation while still providing financial support to any injured parties.

All the debate surrounding 'compensation culture' overlooks the fact that it is a long-practiced form of justice, as seen in these British records: In 1878, an innkeeper was paid £1000 (worth nearly £50,000 in today's money) for drinking poison which he thought was a sleeping aid; an artist who got blown over in the wind was awarded £30 (worth £1796 now) in 1886; and a man whose eye was injured at a wedding's celebratory rice-throwing was awarded £50 (worth about £3000 today).

Without a system like New Zealand's, compensation remains essential for maintaining justice and quality of life for unfairly injured parties.

Read section 9 to get a detailed introduction all types of compensation, including case studies which show how different types of real claims played out.

Types of compensation & claim types

Medical malpractice

When you're in the care of someone wearing a white coat, you feel you should be in safe hands. But sadly, that isn't always the case.

Medical malpractice, sometimes referred to as medical negligence, is when a healthcare professional neglects to carry out their duty of care at any stage during the treatment process: consultation, diagnosis, treatment or after-care.

Examples of medical malpractice can include misdiagnosis, negligence, errors prescribing medications, defective drugs, incorrect or badly executed dental work, treatment without consent, incorrect surgeries and missed diagnosis. The most prolific areas for claims are with missed diagnosis of cancer and heart attacks, both conditions requiring an urgent medical response.

States have different laws surrounding medical malpractice, and more than half of US states have caps imposed on how much can be awarded in the case of "non-economic damages", referring to the kind of suffering caused by avoidable pregnancy loss, ongoing but not debilitating pain, damage to reproductive system, or loss of a child. That's a wide range of problems, yet they are all subject to the same financial limits.

Frighteningly, medical malpractice is in the top three causes of death in the USA.

The consequences of medical malpractice can be enormous, from time off work to life-changing injuries, brain damage, loss of limbs, ongoing trauma and psychological problems, to death.

To prove a case of medical malpractice, there must be evidence that a mistake was made which subsequently caused harm. If the mistake was made, but the patient was fortunate and suffered no ill effects, there would technically be no case for malpractice. Equally, if the second condition was fulfilled (the patient was caused harm), that does not automatically mean there was medical malpractice. Not all treatment is 100% effective, and many procedures and medicines have negative side-effects. If the patient gave informed consent, then there would be no medical malpractice.

Your guide to medical malpractice compensation in the news

In 1995, a Florida man was awarded compensation after an incorrect amputation. His right leg needed partial amputation due to complications of diabetes, but the hospital removed his left leg in error. The mistake had life-changing implications, and the patient received a total of $1.15 million compensation from the surgeon and the hospital.

In 2014, Florida lifted their cap on non-economic damages. A mother died from blood loss in 2006 after a caesarean section, and her family challenged the damages awarded, which were half what they judge had decided before considering the state's cap. Now the arbitrary limit has been removed, and cases will be calculated individually.

Veterinary malpractice

Pet owners want the best care for their beloved companions, so they put their trust in their chosen veterinarian.

The professional duty of care for veterinary professionals is very similar to that of medical doctors. Breaches of duty may include misdiagnosis, missed diagnosis, errors in surgery, mistreatment, incorrect medication given and specific to vets and not doctors flawed assessment of an animal before purchase is made.

Another key difference between vets and doctors when claiming malpractice is that the psychological suffering of the animal and/or owner is not considered. Financial compensation will therefore usually be on a special damages basis, where actual monetary expenses are reimbursed.

A significant factor in assessing veterinary negligence is that vets are not required to meet every aspect of 'best practice', as long as the care they provide is appropriate. This is illustrated further in the case study below.

As with physicians, it must be proven that a mistake was made which subsequently caused harm to the animal. Both conditions must be met.

Your guide to veterinary malpractice compensation in the news

In 2008, a vet was taken to court for failing to record full details on a horse's health certificate. The same vet had performed leg surgery on the horse a year earlier, but failed to disclose it on the certificate. However, the vet had mentioned this in conversation with the owner, so the judged deemed that it was adequate communication. The vet won the case as it would be 'best practice' to put it in writing, but not essential to the customer's understanding of the horse's medical history.

Animal attack

Pets can be cuddly, amusing and loyal, but that doesn't mean they cannot also be extremely dangerous.

Owners are responsible for their animals, so horses need to be adequately fenced in, exotic pets have to be kept according to state-specific regulations, and dogs need to be legal breeds and kept under control in public spaces.

Animals can be unpredictable, and it's all too easy for their owners to forget their pets' naturally predatory instincts. Unfortunately, untrained, mistreated, unsupervised and aggressive dogs cause thousands of injuries every year. In 2012, a total of $17.1 million changed hands in California to compensate for dog attacks. Illinois was the next highest, with $9 million damages in total. Texas was in third place for dog bite claims, with $4.3 million.

When an animal attack has taken place, seek immediate medical help. It's also critical to know the details of the animal owner, so keep a record of as many details as you have (the type and breed of animal, its colours, markings, and the time and location of the attack) so that the owner can be traced if they were not present at the incident.

Often, but not always, US renters and homeowners will have $100,000 or more of dog bite insurance covered in their home insurance policies, although pet owners should be aware that claims will be higher if the dog is larger or stronger and causes more serious injury.

Your guide to animal attack compensation in the news

A British man was awarded £7,300 after he was attacked by a dog in a public place. Walking his own dog, which was on a lead, the unrestrained dog approached and began attacking. The man required stitches and a tetanus injection, while his dog also had to be taken to the vet.

Road accident

Driving is a dangerous business, and not just when playing 'Grand Theft Auto'.

US state laws dictate the specific regulations and policies on road accidents. In some states, such as New Jersey, there is a "no-fault rule", reducing litigation and speeding up the claims process by requiring drivers to make claims through their own insurance. There are exceptions to this, in the case of serious injury.

Regardless of state, however, when claiming against another party, four types of evidence must be provided in order for the plaintiff to be granted damages.

The first of the types is "duty", which is the responsibility to follow the rules of the road and drive safely. This duty is generally inferred just from the fact that someone is driving, and therefore accepts the associated responsibilities.

The second of the types is "breach", which requires evidence to prove that the defendant was in violation of the duty to drive safely. This evidence can take many forms, including video evidence, witness testimony, blood alcohol recordings, admission of guilt, etc.

The third of the types of evidence required is "causation". While the defendant may have been driving dangerously, a claim is only valid if their actions actually caused the injury to the plaintiff. This can be based on video evidence, as well as expert testimony, such as a doctor's assessment that the injuries sustained are consistent with the accident.

The fourth of the types of evidence required for the damages claim is proof of "harm". If the plaintiff walks away from the accident without a scratch to themselves or their vehicle, then there is nothing to claim for. If damage can be proven, then the usual consequences can be compensated (injury, medical care, loss of earnings etc.)

Due to the very sudden and often frightening nature of road accidents, it can be harder for a shaken-up driver to collect the necessary evidence at the time of the incident. As best they can, they should try to take down details of registration plates, licence number, location, any statements made by the other driver (especially an apology), and take photos and / or video at the scene.

This process is the same for anyone involved in a road accident, be it driver, cyclist or pedestrian.

Road accidents in the US are sometimes covered by the driver's vehicle insurance, but these policies typically come with pay-out limits, and not all states require a driver to insure their vehicle (Mississippi, Virginia, or New Hampshire). This means that claims for compensation often go to court.

In the UK, it is mandatory for all drivers to have insurance, and claims for compensation are made between the insurance companies.

Your guide to road accident compensation in the news

In 2002, a highway was blocked by a slow-turning farming vehicle, and an oncoming driver collided with it. The driver sustained extensive and serious injuries, including a brain injury, and was consequently awarded $5.7 million in damages.

Criminal injury

Most compensation claims are civil cases, but damages can also be paid where a crime has been committed. These are known as "intentional torts", as opposed to the negligence associated with most other torts.

Criminal injury describes the consequences for the victim of any crime, and can include a wide range of scenarios. For example, a person might lose valuable jewellery in a burglary; a person may require years of therapy and future loss of earnings as a result of childhood trauma or abuse; a person might experience ongoing sight problems after being attacked in an assault; or a person might lose thousands of dollars in a fraudster's scam.

As with other torts, states across the US have their own policies regarding compensation claims in cases of criminal injury. However, if anything, it should be easier to demonstrate the wrongdoing in criminal cases, as evidence has already been used to prove the guilt of the defendant.

A specific body handles this kind of criminal claim in the UK: the Criminal Injuries Compensation Authority. Reimbursements are for physical injuries as well as mental or emotional injury, and they support "blameless victims" in coping with the circumstances that have been forced upon them. Certain nationality and residency rules apply to claimants.

Your guide to criminal injuries compensation in the news

In November 2015, a series of horrific terrorist attacks took place in Paris, France. The UK government's CICA department (Criminal Injuries Compensation Authority) made it possible for people to apply for damages through the Victims of Overseas Terrorism Compensation Scheme 2012.

Slips and trips

It's might look like the classic slapstick pratfall on a banana skin, but it's not always something to laugh about. Sudden falls on hard surfaces can cause all number of injuries, including back problems, broken bones, head injuries, and in the worst cases, death.

This kind of accident comes under the umbrella of a premises liability claim, meaning that the property owners are responsible for the safety of the area. Whether it's a wobbly step on a subway station, a loose railing in the office staircase, or slippery grapes on the floor of the grocery store, accidents happen. The difference between an unfortunate accident and one requiring compensation is if the premises owner knew or should have known about the hazard.

This is what makes it so important to report hazards through the available channels, as it means the property owner cannot ignore them. A spillage in a store should be flagged up rapidly with a warning sign while staff collect the cleaning equipment to remove it as soon as possible. A spillage left without a warning sign and / or cleared up for any significant period of time would be a strong case for litigation.

Business owners should take out public liability insurance to help finance claims, if there is any circumstance at all in which their business interacts with the public.

Your guide to slips and trips compensation in the news

A customer who slipped and fell in a grocery store in 2012 was awarded $2.3 million compensation. The spinal cord damage he sustained resulted in huge medical bills, as well as the incapacity to work. The store in question was condoned for deliberately destroying the security camera evidence.

Workplace discrimination

Those signs which claim "You don't have to be mad to work here, but it helps" could be displayed in some workplaces, but with "male", "white" or "young" replacing "mad".

Some type of discrimination in the workplace can be highly visible, in the case of harassment, or in hiring practices based on gender, age or race, but other types of workplace discrimination can be harder to detect, especially when it relates to renumeration. Workers don't often compare pay packets, and some companies expressly forbid their employees to do so. This means people may not even realise when they are being paid less, or given fewer perks, as a result of discrimination.

In the US, the Equal Employment Opportunity Commission is responsible for discrimination laws in the workplace. Employees with a complaint must file a charge through the EEOC within two years of the tort taking place. Employers are not allowed to "retaliate" against complaints by demoting, firing, or harassing the employee concerned.

Under their regulation, all types of workplace harassment are prohibited. Harassment is defined as the kind of behaviour that is significant enough to create a workplace atmosphere any "reasonable person" would find hostile or abusive, or any situation where an employee is forced to tolerate harassing or abusive behaviour in order to keep their job. The definition covers sexual harassment as well as bullying behaviour. The employer is typically liable in harassment cases, unless they can demonstrate that they attempted suitable measures to prevent or stop the behaviour.

Age discrimination rules state that is illegal to discriminate against people who are above 40 years old. Any person can be guilty of age discrimination, whatever their own age.

Disability discrimination laws mean that the needs of employees with disabilities or illnesses should be be given "reasonable accommodation". This means any adjustments that make the workplace accessible for the employee, unless they cause "undue hardship" to the employer, i.e. are financially or logistically impossible. The rule also protects employees with a history of a disability, for example, if they have recovered from cancer.

Gender discrimination is forbidden under the Equal Pay Act. If the job descriptions are "substantially equal" between a man and a woman, then the pay should reflect that. This includes all forms of renumeration, perks, bonuses and insurance policies. With this particular type of workplace discrimination, the plaintiff can take the charge directly to court without first filing a charge with the EEOC.

Discrimination is also forbidden in the areas of race, national origin, pregnancy, or religion. In the case of religion, accommodation must be made except in cases of "undue hardship", e.g. if a religious head-covering posed a hazard which could get trapped in factory machinery.

In the UK, employees are protected against any form of discrimination at work, which could include terms and conditions, pay and benefits, hiring practices, redundancy decisions, training opportunities, promotions, and termination of employment. However, in instances where certain groups must be employed due to the nature of the work, exceptions are made (such as only female staff working in a health clinic for Muslim women).

Your guide to workplace discrimination compensation in the news

In 2016, five players from the US women's soccer team began an EEOC complaint because their pay was nowhere near equal with the men's team, at roughly 40% pay of their male counterparts.

Work related injury

Work can be an awful lot worse than never-ending meetings and a bad case of the Mondays. What about when it takes a physical toll?

Accidents in the workplace are a common source of litigation. This is primarily because we spend so much time at work, which maximises the likelihood that something will happen there, but also because jobs can put people in situations they would not normally encounter. There are 30 serious injuries in the workplace every day.

Accidents at work often relate directly to industry hazards, such as use of dangerous machinery in a factory, exposure to infections in a healthcare setting, falling from a ladder reaching stock in a shoe shop, or back injuries and RSI in office settings. Perhaps predictably, some of the most dangerous work environments are for people in healthcare, oil and gas extraction, construction, and transportation and warehousing.

Because some industries have so many potential dangers, they might instead use a 'workers' compensation' system, a type of insurance which covers financial losses for injured employees, as long as they agree to be bound against claiming damages in court. Such schemes are prevalent in Germany, Japan and the USA, which has state-specific uptake.

Employees may face an internal struggle when deciding to pursue a claim or not, through company loyalty and fear of losing their job. Companies may also go to great lengths to conceal injuries which have occurred on their watch. In response to this, the Occupational Safety and Health Administration have massively increased fines for unreported injuries, sometimes as high as $7000 per incident.

Each state will have slightly different policies surrounding workplace safety, such as the Ladder and Scaffold Law in New York, which allows labourers to litigate in the case of falling objects.

In England and Wales, complaints can be made through the HSE (Health and Safety Executive).

Your guide to work related injury compensation in the news

A member of a cleaning team at a meat company was awarded $1.8 million after he was left blind in one eye. Winding up a hose knocked off his safety glasses and caused hydrogen peroxide to splash into his eye. Due to the time it took to reach an eyewash station, extensive damage was sustained and he was left blind in one eye. If the eyewash station had been in closer range, the consequences would have been lessened, so the blame for the serious injury falls on the employer.

An insurance adjuster was visiting a car repair workshop to inspect vehicles as part of his employment. He fell into an uncovered hole, which had no warning signs around it, and received $45,000 to compensate for his fractured wrist.

Injury from military service

Each country has a team of patriotic and brave soldiers who want to protect their families and their homes. Therefore, the military they serve has a duty to protect them as well.

It's no surprise that serving with the military is an extremely high risk occupation, but that doesn't mean you're on your own when it comes to coping with the after effects. Hazards include excessive physical activity, exposure to weapons, chemicals and dangerous terrain, as well as the emotional after-effects which can leave some veterans traumatised with mental health problems such as PTSD.

US veterans are eligible for four types of compensation across different categories.

The first of the types is Disability Compensation, and pays a sum proportionate to the severity of the disease or injury sustained.

The second of the types is Dependency and Indemnity Compensation, which covers the worst case scenario. The surviving spouse and / or children of a person killed in service are eligible for an income-based payment.

The third of the types is Special Monthly Compensation, an additional sum sometimes known as "aid and attendance" because it covers the support of surviving relatives in need of extra care.

The fourth of the types is for claims based on special circumstances. In many cases, there are ongoing costs associated with a disability sustained in service, so this type aims to support these delayed consequences, such as an allowance to buy specially adapted clothing for people using wheelchairs or prosthetics, or a financial allowance for children suffering from Spina Bifida as a result of their mothers serving in specific parts of the world.

In the UK, members of the army who sustain an injury at work can follow the usual process to claim for an injury at work (see, 9viii. Types of claim: Work related injury). There is also the War Pension Scheme (WPS) which covers injury, illness or death before April 2005, and the Armed Forces Compensation Scheme (AFCS) which took over from this date onwards. It is a "no fault scheme" meaning that a payment of damages is not an admission of wrongdoing. Partners and families can receive financial support in the case of death as a consequence of service. Claims must be made within 7 years (or within 3 years of seeing a doctor, in the case of delayed but associated types of illness or injury). You may receive a single payout for each injury sustained, and in the most severe situations, there will also be regular support called Guaranteed Income Payments.

Your guide to military injury compensation in the news

In 2014, British Army veterans were facing huge delays in receiving injury compensation. Over the course of four years, the waiting time for compensation payments had increased nearly three-fold, from 82 days to 219 days.

Sports injury

People do sports for enjoyment and for health improvement, but when it results in injury, it's neither good for your health, nor enjoyable. Contact sports can cause 'par for the course' injuries, but if there is an atypical or extreme injury as a result of negligence or intentional harm, then there is the possibility of claiming damages.

Sports injuries are one of many types of personal injury, so the claim should be directed at whichever party is at fault. If a person sustains a fracture using faulty gym equipment, then the gym is at fault (see principles of public liability in 9vi. Types of claim: Slips and trips). If a person gains a head injury because their ski helmet falls off before impact, then the manufacturer of the helmet is at fault (see, 9xi. Types of claim: Defective or dangerous product). If a cyclist is knocked off a bicycle by a dangerous driver on the road, then the driver is at fault (see, 9iv. Types of claim: Road accidents).

Your guide to sports injury compensation in the news

In 2008, a landmark ruling in the UK established that sports clubs can be financially liable for deliberate injuries inflicted by their players. A rugby player was punched in the face during a match, sustaining a fractured eye socket. At first, the court ordered the player who punched the plaintiff to pay compensation of £8,500. They revised the decision after an appeal, and the team itself became liable to pay the compensation and legal fees.

A 12 year old from New Jersey went into cardiac arrest during a 2006 baseball game, after the ball hit him in the chest at great speed. The cardiac arrest starved his brain of oxygen for a quarter of an hour until he was resuscitated, but it was too late and he had sustained brain damage. His family received $14.5 million in compensation after challenging the manufacturer of the baseball bat, because as a metal bat, it caused the ball to fly at a dangerously high speed.

Defective or dangerous product

Nowadays, consumers can expect their purchases to be rubber-stamped for safety. You would expect a product to be as advertised, to last a reasonable amount of time, and to be safe to use.

If an item or product you've purchased falls below this standard, and causes damage or harm, you may be entitled to compensation. It could be any problem, such as a tumble dryer that caught fire, a children's toy that caused an injury with sharp pieces, or a new car with faulty brakes.

In the UK, customers are covered by The Consumer Protection Act 1987, which entitles the purchaser to damages when the item is below reasonable expectation.

In the US or the UK, compensation should be sought from the manufacturer (or in cases where the identity of the manufacturer is unclear, the retailer).

Your guide to dangerous product compensation in the news

By 2014, a defect with some General Motors cars had been connected to 13 deaths. The cars were unexpectedly accelerating and at the same time, deactivating the air bags. Unfortunately, General Motors' unwillingness to make the problem public meant that they were continuously settling out of court. Because they didn't go to trial in this period, more deaths and injuries were able to happen.

In 2015, three tobacco firms were made to pay more than C$15 billion in damages, the highest amount ever in Canadian legal history. The smokers who challenged the companies did so on the basis that they were unaware of the health implications of smoking.

Air travel

Anyone who's ever slept on the cold, hard floor of airport will know that delayed flights are no fun for anyone.

The Montreal Convention is a piece of legislation which sets limits for passenger claims against airlines.

All liability limits stated in the Montreal Convention are given in 'Special Drawing Rights', which is separate from any nation's currency, so the conversions are given below as approximations.

Where injury or death has occurred as a result of an airline mistake, there is no cap on the amount of damages payable. Within 15 days, the airline must issue an advance payment to help the injured party while they wait for the full sum. Any figure below £156,000, or £110,000, cannot be disputed by the airline. Requests for larger sums can be contested with the defence that the airline believes they are not at fault.

If a passenger is delayed for reasons within the airline's control, the limit is around £5000, or $7100.

If a passenger's checked luggage is lost, damaged or delayed, they can be compensated with a figure up to around $1400, or £800, providing the luggage itself was not defective. Some airlines choose to increase this figure, and it's also possible to pay a supplementary fee to cover additional insurance if you know you will be carrying luggage of a higher value.

There is a separate European Union (EU) policy also regarding flight delays. With this particular law, Iceland, Switzerland, Norway and Lichtenstein are included within the umbrella of EU countries. If cancellations or delays occur at an airport within the EU, or outside of the EU but with an EU based airline, then you may be entitled to a payment as a result of the 'Denied Boarding Regulation'.

Delays are counted from expected landing time, so even if your flight was late at take off, if it lands close to its projected time then it will not be eligible for the regulation. Landing must be at least 3 hours later than planned in order to qualify for a payment.

The specific amounts are capped and relate to the total distance of journey (including connections) and length of delay.

Cancelled flights are eligible for between €250 and €600 payment per paying passenger (i.e. not usually for a child under 2, unless you bought them a separate seat). Additionally, you should be refunded for the original journey fare within seven days. Airlines must also pay for food, transport and accommodation during the period that a passenger finds themselves unexpectedly stranded at an airport.

The only exception for this rule is when there has been "extraordinary circumstances" beyond any prediction or control of the airline. This means that flights grounded as a result of the 2010 volcanic ash cloud in Iceland would not have been eligible for compensation, but if a flight was delayed or cancelled due to staffing problems, technical issues, or underbooking.

Passengers are able to claim compensation for delays and cancellations (within the EU specification) up to six years in the past.

When claiming for EU flight delays, it is not necessary to consult legal professionals or enlist their services, unless you wish to (Bott & Co are well-established in this area) . For these types of claim, you can send a letter (it may be helpful to use a template such as the one available here) stating all the necessary flight details, passenger information and delay information. Quote "EC regulation 261/2004" to ensure your request is handled appropriately.

If the airline attempts to reject your request for damages, you will have the option to take them to court instead.

Your guide to air travel compensation in the news

In 2014, calculations revealed that $300 million of unclaimed damages remained sitting in the pockets of deceptive airlines. Only 10% of passengers denied boarding (typically due to oversold tickets) were given the full entitlement. The others accepted the first consolation gesture from airlines, which is typically a low amount of vouchers to use with that company, not realising that they could

  • and should
  • have had a better settlement.

    The six years to claim rule for EU delays came into force after the precedent was set by a man claiming damages in 2012 for a flight delayed in 2006. The flight was more than six hours late, and when the airline contested his claim, the court ruled in favour of the plaintiff.

    Vacations

    A vacation is a time to relax, and it often takes months or even years to save up for. So when it becomes the source of stress, panic, or inconvenience, there is often financial recourse available.

    If you bought a vacation which turned out to be not as advertised, you might be able to make a claim with the provider.

    Thousands of people face disappointment every year when their hotel rooms have fewer beds than advertised, are missing the promised facilities, or discover that the peaceful hotel pictured on a sandy beach in the brochure is actually surrounded by intense building noise and disruption.

    In the UK there is extra assurance with any ATOL protected purchase. This scheme guarantees advertised conditions, and reimbursements where they are not met.

    Your guide to vacation compensation in the news

    In 2006, a guest at a New York Hotel pursued $750,000 after he was asked to leave the hotel. He was intoxicated (after being served alcohol by hotel staff) and had nowhere else to go. The claim was based on negligence and breach of contract on the part of the hotel.

    Food poisoning

    Just thinking about the words salmonella, listeria, or E. coli... it's enough to put you off your lunch. But whenever we eat food which we haven't cooked ourselves, we are putting ourselves at risk of food poisoning.

    The effects of food poisoning can range from an unpleasant day spent on the toilet, to much more serious consequences: pregnancy loss, life-changing illnesses, and even death.

    Certain steps can be taken to avoid food poisoning, such as keeping hands clean, washing fruit and vegetables, keeping raw meat away from other foods, and heating high risk foods to the correct temperature. However, if food poisoning is contracted as a result of someone else's error (such as a manufacturer contaminating food, a retailer storing it ineffectively, or a chef preparing it incorrectly), then there could be a case for compensation.

    Food poisoning generally shows symptoms around 6 hours after eating the contaminated food, though it can take as much as 48 hours (or even weeks, in rare cases). Nausea, vomiting, diarrhoea, fever and weakness are all common symptoms, and will cause discomfort as well as loss of earnings for time off work.

    See your doctor to receive treatment and advice, and report your suspicions of food poisoning so that the store or restaurant can be investigated. In the USA, you can use this link to report a case, while UK residents can use this link.

    With minor cases of food poisoning, people rarely think to report the restaurant at fault, and tend to chalk it up to bad luck. An experiment in Chicago used people's Twitter feeds, searching for complaints about food poisoning on their Twitter timelines, to identify 133 restaurants for inspection, with 21 of them consequently being closed down. However, if the food is contaminated, it could have more disastrous effects for more vulnerable customers, such as children, pregnant women, the elderly or people with underlying health issues. Even if you have a mild case, it's better to report it officially, rather than just complaining to friends.

    Your guide to food poisoning compensation in the news

    In 2016, a woman from Scotland was awarded £263,534 compensation after a 2009 meal damaged her digestive system indefinitely. She contracted campylobacter from a poorly prepared salad in a restaurant, and has been left with painful and constant digestive problems.

    Libel

    Spreading rumours is unkind, whether it's on the school playground or on the front page of national newspapers. Unfortunately, some publications have decided that the inevitable payment of damages is a worthwhile sacrifice to grab a dramatic headline and shift hundreds of thousands of issues.

    Libel is the written communication of false and damaging claims, which present themselves as true facts. Because of the abstract nature of reputation, no evidence of concrete damage to a person (e.g. a lost job) is required; the very act of libel is assumed damaging enough to award compensation.

    In the UK, libel and slander are prohibited by the Defamation Act 1996. Injured parties are able to sue the publishers of the false information, and claim damages, especially where financial loss has been incurred (e.g. a shop whose customer base is destroyed by false claims).

    Your guide to libel compensation in the news

    In 2010, an actor from the stage show Les Miserables was awarded £4,250 damages in a libel case. A British newspaper had claimed that he was in a relationship with another actor, when he was actually in a committed long term relationship with someone already. However, he had essentially wasted the court's time, because the newspaper had already offered £10,000 out of court settlement. By rejecting this and hoping to receive £20,000, he ended up with less, and even had to pay all the legal costs?

    A large number of UK newspapers and journalists have been implicated in celebrity phone-hacking scandals in recent years. By covertly accessing voicemail messages without permission, newspapers were able to spy on the private lives of actors, singers, politicians and everyday people, and report stories in the press. One woman received more than £260,000 to compensate for the intrusion into, and reporting of, her private life.

    Intellectual property

    Imagine working on something

  • an idea, a product, a story, a song
  • for years and years, just for it to be stolen from you.

    Intellectual property describes the ownership of ideas, inventions and creations. These can be stolen or misused like any other commodity, a process sometimes known as piracy or plagiarism, so intellectual property laws aim to protect their ownership.

    Copyright describes the legal ownership of any recorded work not in the public domain (songs, stories, films, paintings etc.), and is an internationally recognised right. Public domain laws vary between countries; in the US, works join the public domain 70 years after the author dies (or 120 years after corporate creation). In the UK, it is 70 years after the death of the author, though there are a range of shorter terms for mass produced art, multimedia and previously unpublished photographs.

    (UK)Trademarks are words or designs which are claimed by a brand for their use only, and these are usually only valid within the country of trademark registration. Patents are protected blueprints or concepts of products and processes, so that they cannot be used and profited from by parties other than the inventor. These are also protected on a national level.

    When intellectual property has been exploited or stolen, the original inventor should be able to make a claim for renumeration, as it is their "goods" which have been profited from. Copyright is automatically valid for any creative work, and does not need formal registration to be a valid concept. However, concerned parties can register for instant copyright approval if they wish to guarantee recognition of ownership.

    Trademarks and patents do require registration. Trademarks typically take around a year to process, whilst the complexity of patents means they can take several years.

    Under US law, calculating the damages due for copyright infringement is related to the intention of the defendant, and more lenient sums are ordered if there seems to be a genuine ignorance of copyright. Wilful infringement can result in fines of $150,000 per any single work.

    In the UK, damages are calculated in one of two ways, using "inquiry as to damages" (the actual financial loss suffered by the copyright owner), or "an account of profit", which considers how much money has been made by the defendant as a result of illegal distribution.

    Your guide to intellectual property compensation in the news

    In 2012, a man from Massachusetts was ordered to pay $675,000 damages to the music labels who lost sales as result of his illegal file sharing. The online distribution happened in 2007 when he was 16 years old, and it related to 31 songs.

    Water companies at fault

    Humans require clean water for survival and sanitation, so when the water company screws up, there can be dire consequences for local residents.

    We so often take for granted that we have water on tap, but things can and do go wrong at the supplier end. Water can be over-treated, leaving high amounts of chlorine or other chemicals. It can be contaminated with numerous types of dangerous bacteria. The supply can be cut off completely, leaving residents unable to drink, wash, cook, flush toilets or use water-based heating systems.

    Water companies have their own routes for complaints and compensation, but sometimes it might not be enough to reflect the severity of the situation.

    Your guide to water supply compensation in the news

    An enormous scandal broke in 2015 when it emerged that residents of Flint, Massachusetts, had been receiving contaminated water for more than a year. Serious bugs such as E. Coli were present in the supply, as well as the Legionella bacteria, at the same time that multiple locals died of Legionnaire's disease. A lawsuit for $100 million was lunched in connection with a woman who died from the illness.

    The UK county of Lancashire was affected for several weeks in 2015 when the water supply was found to contain cryptosporidium, a bacteria which causes diarrhoea. Local politicians spoke out in anger when just £60 per household was offered as a compensatory payment.

    Power outage

    It's no fun being left in the dark, and we've all experienced the frustration of a power outage.

    Energy suppliers in the US and UK have policies with small, standard sums of money paid out if you experience an outage for the minimum period of time.

    However, power cuts can have more severe consequences than the inconvenience of a dark house and a cold dinner. Sudden and unexpected loss of power can cause accidents in the home and on the road; they can affect the ability of life-supporting equipment to function; they can shut down security systems protecting homes and offices. And when the power is reinstated, a surge can damage plugged in equipment such as televisions and computers.

    If a power outage has caused more damage than the standard figure compensates for, then further claims can be pursued, though it could be a difficult fight. Home insurance policies may cover some of the side effects.

    Your guide to power outage compensation in the news

    In 2003, 50 million people were left without power during the Northeast Blackout. Many people were left stranded as the subway shut down, and 911 efficiency was damaged as they faced three interruptions to service in conjunction with a 40% increase in calls. There were dozens of fires in New York as a result of people using generators, or burning candles. Businesses lost huge amounts of takings, and many people suffered from food poisoning as their refrigerators had ceased functioning. The cause of the blackout could not be attributed to the fault of any party, and no compensation was paid. Some businesses found recompense from their insurance, though many were let down by the small print.

    Financial services

    We all hope that the bank is the safest place for our money, but even banks make mistakes. If a bank goes bust while in possession of your money, if you are overcharged for insurance, or if you are mis-sold a loan or other financial product, you may consider making a claim against them.

    Whichever financial provider has made a mistake, they are likely to have enormous funds and legal power on their side. Initiating a lawsuit should be a last resort, as other avenues of pursuit may be faster and more efficient.

    In the US, state specific laws apply to financial services. In the UK, The Financial Services Authority has ultimate jurisdiction over financial matters.

    Your guide to financial services compensation in the news

    In 2013, the state of Miami took legal action against three major banks, on the grounds that they were unfairly discriminating against minority groups with mortgages in the area. The lawsuit came just months after The Bank of America paid out $404 million due to problems with government mortgages.

    In 2014, British 'payday lender' Wonga was ordered to pay a total of £2.6 million to customers they had wrongfully intimidated. 45,000 customers who had borrowed from the company received around £50 each by way of apology after Wonga sent them threatening repayment demands from a fake law firm.

    Read section 10 of the guide for quick references to technical terms.

    Glossary

    Refer to this keyword guide if you are uncertain about the meanings of any technical terms used in this guide to compensation types.

    Read section 11 of the guide for a useful list of contacts and sources.

    Further information guide

    Further information guide

    For more information on types of compensation, types of claims and typical processes, consult your national guide:

    USA contacts guide

    UK contacts guide