The influence of compensation on recovery from low-back pain was assessed in a retrospective controlled cohort study. One hundred fifty compensable and 150 noncompensable back injury patients were invited for review between 1 and 5 years from presentation. A 91.3% follow-up was achieved, and there was no difference in the median age, follow-up, and initial injury score between the two groups. The incidence of reported pain, disability, psychological disturbance, unemployment, and length of time off work was greater in the compensation group (P less than 0.001). Settlement of the claim did not result in any reduction in morbidity, even up to 5 years later. These results demonstrate that the payment of compensation delays recovery from low-back injury.