Elliot Lane captures the essence of this year's Insurance Times Personal Injury Claims Conference

Common sense must prevail. These were the words of Sir David Arculus, author of the Better Routes to Redress report, when he addressed delegates at last week's Insurance Times Personal Injury Claims Conference, in partnership with Norwich Union and Plexus Law.

Last November, at our first conference, the Lord Chancellor, Lord Falconer, made a ground-breaking speech where he challenged claims management companies and the 'no-win, no-fee' market to clean up its act or face stiff regulation.

His speech sent a shockwave through the industry and opened the door for change. It set the agenda for insurers, brokers and lawyers to find alternative ways forward to tackling rising claim costs.

The speech also set the pre-election agenda and in the run up to 5 May this year. The compensation culture and regulation became a political football across all the major parties.

The noise reached Number 10 and led the Prime Minister last month to make a post-election pledge to introduce a raft of measures to stamp out a compensation culture that, in his own words, is "seriously damaging our country".

The government has now proposed a new Compensation Bill. This will limit the work of claims farmers to stop them preying on vulnerable people in public places, such as hospitals and doctors' surgeries.

So there is a compensation culture, but is it as extreme as we think?

All the speakers and many of the delegates had stories of ridiculous actions being taken by local councils or in schools because the blame culture has extended its grip.

They gave examples such as Health and Safety Executive (HSE) rules resulting in one hospital banning patients from making their own toast on wards. Another reported that a 150-year-old beech tree had to be cut down because a council was worried the branches might fall and injure someone.

Department for Work and Pensions (DWP) minister Lord Hunt of Kings Heath made a bold speech and told delegates that he was planning to talk to the HSE, the TUC and push the cross-ministerial group to discuss how the Compensation Bill can really have teeth.

In some respects he admitted that this was a blank canvas and the government itself was still unsure what to do. The legislation is planned for publication in the next session of Parliament. He asked delegates to engage with the DWP and the industry's own official bodies to give feedback and help shape this legislation.

If the Compensation Bill is to get its first reading in October, the industry must make its voice heard over the summer and add its input.

As Dominic Clayden, Norwich Union director of technical claims said, lawyers should not be claims handlers, but the industry could easily be hindered by stringent regulation.

A commonsense culture will be the best form of defence against a rising compensation culture. IT

Elliot Lane, editor