Background: Victims who are involved in a compensation processes generally have more health complaints compared to victims who are not involved in a compensation process. Previous research regarding the effect of compensation processes has concentrated on the effect on physical health. This meta-analysis focuses on the effect of compensation processes on mental health. Method: Prospective cohort studies addressing compensation and mental health after traffic accidents, occupational accidents or medical errors were identified using PubMed, EMBASE, PsycInfo, CINAHL, and the Cochrane Library. Relevant studies published between January 1966 and 10 June 2011 were selected for inclusion. Results: Ten studies were included. The first finding was that the compensation group already had higher mental health complaints at baseline compared to the non-compensation group (standardised mean difference (SMD) = -0.38; 95% confidence interval (CI) -0.66 to -0.10; p =.01). The second finding was that mental health between baseline and post measurement improved less in the compensation group compared to the non-compensation group (SMD = -0.35; 95% CI -0.70 to -0.01; p =.05). However, the quality of evidence was limited, mainly because of low quality study design and heterogeneity. Discussion: Being involved in a compensation process is associated with higher mental health complaints but three-quarters of the difference appeared to be already present at baseline. The findings of this study should be interpreted with caution because of the limited quality of evidence. The difference at baseline may be explained by a selection bias or more anger and blame about the accident in the compensation group. The difference between baseline and follow-up may be explained by secondary gain and secondary victimisation. Future research should involve assessment of exposure to compensation processes, should analyse and correct for baseline differences, and could examine the effect of time, compensation scheme design, and claim settlement on (mental) health. © 2011 Elsevier Ltd.