Abstract This review examines the literature on psychological reactions, often referred to as ‘compensation neurosis’, which occur after an accident and which are thought to be produced or maintained by a compensation claim. Theories and research are examined. The area is complicated and research so far is limited in scope and design. Few accident cases involve compensation claims and the incidence of psychological difficulties across the whole range of cases is unknown. Researchers have considered a number of background factors—severity of injury, pre-existing neurotic traits, social class, sex and age— but there has been little investigation of attitudinal, family, social and employment factors or of progress of the condition and follow-up after settlement. The review identifies a major research need for more adequate screening and sampling of cases and for more systematic investigation of personal and family factors.