BEagle,
I think you've missed my point. I was saying - or intending to - that being an FI doesn't mean I can do a few circuits with someone and tell if they'll be OK on, for instance, a long cross country. I haven't been trained to do that. I think I have as much chance of being able to do so as an experienced PPL; no more, no less.
However, I still think the problem is that we're calling this a "check". Don't forget that legally a pilot can fly even if he hasn't flown for a year (or more actually), and can take passengers so long as he's done three take-offs and landings within 90 days. Private owners and pilots with shares in aircraft aren't "checked" every 28 days. Lots of pilots really don't need to be, and schools often know who those pilots are. So, if they choose to let those pilots fly with a PPL safety pilot, and the insurance company is happy with that, it may not be a safety issue.
I see your point about it being a grey area with respect to employees and payment. It shouldn't be, but the CAA isn't always completely logical with respect to their own rules, so it could be. But IMHO it's not necessarily unsafe and wrong. You may disagree, and that's fine. However, I wonder if you're not mixing up your own opinions - to which you're perfectly entitled - with what is or isn't legal.
Finally, lets keep the two issues being discussed on this thread separate. PPLs doing trial lessons is illegal and totally wrong. PPLs acting as safety pilots to other PPLs to fit in with club or insurance rules is a very different matter. Let's not lump them together.