Hit-and-run attack on the public

Zipping through the traffic at high speed, a careless motorist takes out a wobbling cyclist. Spitting fury, and teeth, the cyclist rises from the road and hollers the words to strike fear into any driver's heart: "Ha ha, I'm with Bupa."

Or at least they would strike fear if anyone knew about this: cause an accident and hurt someone with private medical insurance, and your car insurance company could be shelling out for years. Medical insurance companies regularly sue to recoup the costs of care for someone injured at another person's hands. And you can be sure that the insurer passes on those costs, either through savagely higher premiums for the poor sod that caused the accident, or through raising prices for all drivers (or both).

Now the Law Commission wants the NHS to be able to play the same game. It's a neat idea, and the principle behind it - to make the reckless pay - is appealing enough. But as it stands it would be a nightmare.

At the moment, the NHS picks up the victims of accidents and sews them back together again, no matter where the fault lies. Around pounds 1bn of taxpayers' money is spent patching up victims. So the Law Commission has proposed that the NHS should sue for costs in the same way.

There is something deeply satisfying about this idea. Why should innocent, careful people pay for the screw-ups and the recklessness of others? Those at fault should take some responsibility for their actions.

If the cost of car accidents, for example, can be spread across all drivers (or all bad drivers) through insurance company premiums, well, that's even better. Bankrupting one driver who happened to make a silly mistake - just as any one of us could do - seems severe and punitative. But charging all drivers extra money to cover the full health costs of their essentially risky and dangerous habit - driving - seems fair enough.

Why stop there? Why not apply the same principle to foolish risks we take with our own health, too? Travel insurance companies demand higher premiums for fools who choose to slither down foreign snowy slopes with nothing to protect them beyond a woolly hat and a puffy jacket. Why shouldn't hikers and climbers in Scotland or the Lake District pay an extra fee to the NHS in case they need a broken limb reset when they get to the bottom of the hill?

While we're at it, we could make people take financial responsibility for all kinds of other foolish risks. Romantics who choose to become actors rather than accountants, for example, could be charged extra unemployment insurance - on the basis that they are far more likely to be out of work than their sum-totting colleagues.

These are the principles that lie behind a new paper by the academics David Halpern and Stuart White. Writing for the on-line thinktank NEXUS*, they argue that the state should make individuals pay the cost of "risks that they undertake voluntarily, as a matter of lifestyle choice".

Theirs is not the tough, punitive, "serves-you-right" kind of approach. Far from it. Cigarette smokers would not have to pay the entire cost of treatment for lung cancer or risk being denied it altogether. Instead, they would simply pay a risk premium on every cigarette they smoked - as in fact they do already through cigarette duty - so that the burden of treating lung cancer could be split fairly between all puffers.

More important, in the Halpern-White view of the world, the state would make sure that we were not punished for brute bad luck. In other words, people who are unemployed because they don't have the ability to get the qualifications that employers want should not be charged extra insurance premiums. But people who choose to go into high unemployment professions (like all those actors) should.

It sounds so clever. And there may well be promising avenues for a government to pursue. But we should proceed with caution, for there are all kinds of ethical and practical problems along the way.

For a start, this is a ferociously liberal, individualistic way to carve up the mistakes and choices we make - working out the calculus of costs, risks and responsibilities, and producing a tax bill or insurance bill to match. What happens, for example, to the woman who chooses to get pregnant - one of the riskiest and costliest decisions a woman can make? Should we charge her for it, her family, or all women of menstruating age? Or should we bear the costs together, accepting that we all share obligations to the next generation, whether they are our own children or not?

Consider, too, the insidious effect this cost calculus could have on those who willingly share their risks and mutual obligations in a different kind of way. Some of the fiercest opponents of extra charges on hill-walkers at the moment, for example, are those who volunteer to pace the fells in rescue teams whenever someone gets lost.

Halpern and White are the first to admit that their approach should not be applied to every problem. But the limits aren't just ethical, they are practical, and this is where the Law Commission's proposal comes unstuck.

It is easy enough for the state to levy a tax on cigarettes, or on cars, so that smokers and drivers share the cost of their risky escapades. But using private insurance companies as the mechanism to make people pay the cost of the accidents they cause, as the Law Commission suggests, is fraught with practical problems.

Imagine it. Rather than getting extra cash for lung cancer through a levy raised by the state, the NHS would have to sue for extra cash for accidents through the courts. Motorists and their insurance companies would contest it furiously, battling to shift the blame on to someone else. And guess what? The lawyers would have a field day.

No wonder the Law Commission is so keen on the plan. Cynics might suggest that behind that veneer of concern for the taxpayer's cash lies a large amount of self-interest. A US-style litigation culture is in sight. Armies of ambulance chasers (otherwise known as personal injury lawyers) could sue the driver of the car that hit you, the owner of the firm that didn't provide you with adequate safety equipment at work, the waitress who spilt coffee on you, the council that failed to mend the pavement you tripped up over, and so on and so on.

Far from making the allocation of resources in society and the economy more efficient, it looks as if the Law Commission proposal would simply shift resources round in circles. Finding ways to make individuals take responsibility for their own behaviour is a worthy enough aim. So too is finding genuine savings for the taxpayer. Sadly, it seems, the Law Commission's idea is not the best way to do either. Rather than subsidising the carelessness of bad drivers (or the mistakes of hikers, and gambles by smokers) society would end up lining the pockets of lawyers instead.

*NEXUS can be found on http://www.dar.cam.ac.uk/nexus