Skimping on compensation will fuel an increase in litigation & costs says Richard Scorer
According to the BBC (16 September 2011), the government has cut the budget of the Criminal Injuries Compensation Authority (CICA). The CICA is a taxpayer-funded scheme which awards compensation to victims of violent crime. It will have £10m less this year—a cut of 5%. While the Ministry of Justice (MoJ) maintains that the reduced funding will be sufficient, the victim’s organisation, Victim Support, argues that there is already a “financial time bomb” in the scheme.
Sensible policy?
Is cutting the CICA’s budget a sensible policy, even in narrow accountancy terms? Between 1964 and 1 April 1996 the Criminal Injuries Compensation Board (CICB) awarded damages to victims of violent crime on the same basis as the civil courts. In 1995 the then home secretary, Michael Howard, deemed the CICB scheme too expensive and replaced it with the CICA scheme which came into effect on 1 April 1996.
The 1996 scheme was significantly less generous than the scheme it replaced. Whereas the CICB applied common law principles, the CICA introduced
