Employer and Public Liability claims are top of the agenda for many finance directors. With their impact on insurance premiums, deductibles and absenteeism levels, it is easy to see why. In particular, small and medium-sized businesses can pay a significant percentage of their turnover on employer and public liability insurance, in already straitened times.
Historically in Scotland, there has been a perception that for companies these claims are indefensible, settlements encourage copycat claims and perpetuate a vicious cycle. Lord Young’s health and safety recommendations and Professor Löfstedt’s report have the aim of reducing the burden of health and safety regulation on business and the government is committed to implementing the Löfstedt proposals. The implementation of the Gill Review of the court system in Scotland should see the cases that do reach court being less costly to defend.
In the meantime, a series of recent Scottish decisions provide some comfort for directors, showing that, where a company can evidence ‘common sense, common safety’, a defence can succeed, potentially discouraging future claims and keeping insurance costs down.
GOOD SYSTEMS
The importance of good health and safety systems has never been in doubt. The decision of Strange v Wincanton Logistics Ltd [2011] reinforces this but also makes the point that cost should be considered. There are limits to what is required of companies to prevent injuries. Manual handling claims have been notoriously tricky to defend. Mr Strange was a loading bay operative who injured his back while handling pallets. The manual handling operation had been subject to risk assessment, the employee had been trained and it formed part of his normal job. Our client, Wincanton, succeeded at trial. The Inner House of the Court of Session upheld the result on appeal. The Court held that, on the facts, the risk of injury was small and it could only have been avoided at significant cost. The employer had lowered the risk to the lowest level reasonably practicable. In reaching its decision, the Court noted that the operation had been carried out routinely, almost universally, in the industry, and emphasised that industry practice is a benchmark which ‘weighs significantly in the balance’ when determining whether it would have been reasonably practicable for an employer to do more.
ENFORCEMENT OF THOSE SYSTEMS
The importance of monitoring and enforcing good systems was emphasised in Ronald Sutherland v McConechy’s Tyre Service Ltd [2012]. The claimant was the manager of a tyre fitting company and was also the company’s appointed health and safety representative. He sustained injury while inflating a commercial tyre, having failed to use a tyre safety cage as required by his employer’s health and safety policy. The tyre and the wheel were blown towards him, hitting his left leg. The injury would have been prevented if the employer’s system had been followed. The claimant accepted he knew he was doing something ‘contrary to health and safety’. He argued that the safety cage system was not used routinely and that his employers were aware of that. He also stated that, when he signed to confirm that he had read and understood the safety manual, ‘that was a lie’. The employers succeeded by proving that they had a monitoring system in place to ensure that work was carried out in accordance with their health and safety procedures. The Court held that they had fulfilled their duty to the claimant and he was deemed to be the author of his own misfortune. This also illustrates the difference a witness can make, which I will return to later.
PICK THE CASES ON WHICH TO FOCUS RESOURCES AND DEFEND
Early and detailed accident recording and thorough investigation of accidents is crucial. Close working between a company’s management, their health and safety advisors and its legal team is key to early decision making on whether a case is one to defend all the way.
IS REASONABLE CARE BECOMING MORE REASONABLE?
Public and employer liability cases in Scotland regularly involve consideration of whether a company has breached its duty of reasonable care, as in Murphy v East Ayrshire Council [2012]. A wheelchair user, Mr Murphy, attended the council’s day centre. The council arranged transport by an independent firm to and from the centre. The task of securing the wheelchairs and ensuring the passengers were strapped in was carried out by the driver. Two care workers, employed by the council travelled in the minibus. The minibus had to brake sharply and Mr Murphy’s seatbelt was unfastened at the time, he fell from his wheelchair and was injured. It was recorded in a risk assessment that Mr Murphy had previously unfastened his safety belt in the course of journeys home. It was argued there was a duty to monitor and supervise Mr Murphy during the journey and that since there had been evidence of the claimant unfastening his seatbelt in the past, it was reasonably foreseeable that he would unfasten his seatbelt during the journey home.
The Court held there was a duty of care, which was almost self-evident from the designation ‘care worker’. The Court restated that whether there has been a breach of duty to take reasonable care is determined according to the foresight of the reasonable man. The duty is to avoid doing, or omitting to do, anything which has, as its reasonable and probable consequence, injury to others. This is a question of fact in the particular circumstances of the case and there is some room for diversity of view. There are many factors that may be taken into account, including knowledge of the risk, its magnitude and the practicability and effectiveness of any preventive measures. Here, where the risk to be guarded against was found to be so rare, the judge was bound to hold that there had been no failure to take reasonable care. There was no reason to place an obligation upon the care workers to strap the wheelchairs to the floor and ensure that the seatbelts were fastened, or to add a further task for monitoring the state of the seatbelts through the journey. There was no apparent reason that they ought to have guarded against other eventualities outwith the scope of their normal duties.
ARE THE COURTS BECOMING MORE AWARE OF THE REALITIES BUSINESSES FACE TODAY?
Moira Brown v Lakeland Ltd [2012], a claim under the Occupiers Liability (Scotland) Act 1960, also involved consideration of what amounted to a failure to take reasonable care. A 77-year-old claimant lost her footing and fell as she descended steps leading out of the Lakeland shop in Edinburgh. She suffered various injuries, including extensive bruising to her right side and several fractured ribs. She argued for fault on the part of Lakeland for not installing a handrail at the steps and not having better signage to inform customers that there was another entrance with a ramp and a handrail. In deciding whether or not Lakeland had breached its duty of reasonable care, Lord Woolman assessed the magnitude of the risk and the practicability and effectiveness of any preventative measures. He found as follows:
- All steps and stairs may be said to present a degree of risk.
- With the exception of one case, there had been no history of accidents among perhaps 3 million visitors to the shop over the ten years of its existence.
- If anyone does fall, they will not fall far.
- Lakeland had already provided disabled access to the shop and had taken steps to bring its existence to the notice of customers.
- There was no evidence that if the handrail had been present it would have prevented the accident and it was unclear whether the planning authority would have permitted a handrail to be installed.
Lord Woolman concluded Lakeland was not under a duty to install a handrail and therefore was not negligent.
WHAT A DIFFERENCE A WITNESS CAN MAKE
As in England, the issue of control of employees or property is often determinative of liability, as highlighted in Kenneth Win-Pope v ES Access Platforms Ltd and CKD Galbraith [2012]. A trainee surveyor needed to view a roof for a survey. He arranged for the injured party’s employers to provide a mobile platform. When the trainee surveyor left the platform, the claimant, who was the mobile platform operator, followed him. The trainee surveyor realised that the claimant ‘did not know what he was doing’ and told him to get off the roof. In doing so, the claimant fell through a roof light. The claimant abandoned the case against his own employer before trial, concentrating on pursuing the surveyor’s firm. After hearing evidence from the surveyor, among others and whom he thought was a credible witness, the judge concluded that the claimant was following a project of his own when he came onto the roof. He was not satisfied that the claimant was a person under the control of the surveyors – while the survey work was under their control, the claimant was not.
Ordinarily in Scotland witnesses are required to attend court to give evidence. Taking early detailed statements and explaining and providing support to the witnesses through the court process can make all the difference. In contrast, the claimant did not give evidence himself with his own legal team, stating that they could not commend him to the court ‘as someone worthy of credence’.
Where appropriate, agreeing quantum at an early stage and limiting the trial to liability and contributory negligence can limit costs. In Kenneth Win-Pope’s case, the judge observed that had he found the defenders liable he would have been open to an argument for a finding of 100% contributory negligence on the part of the claimant.
REDUCE EXPOSURE BY REDUCING PUBLIC ACCESS
The general rule in Scotland is that an occupier must take all reasonable and practical steps to protect the public from foreseeable dangers. For example, where a 14-year-old was injured after falling 15 feet from scaffolding erected by a council, the council was held liable for not erecting a two-metre fence or barrier.
The occupier is the person occupying or having control. The test is possession and control and will be a matter of fact in each case. Where someone has had the power to exclude others, they have been held to be the occupier. This is worth remembering if, as a financial institution, you take title to unoccupied property through repossession, which is increasingly common in the current economic climate. Ownership is not necessary and, indeed, independent contractors have been held liable. Businesses in this situation need to address the risks on site and limit public access.
The recent case of Dawson v Page [2012] shows that there are limits to an occupier’s duty. The case involved a 72-year-old delivery man, who slipped on a wet plank outside a house that was being renovated. The occupier’s defence was successful, with the judge noting that as the wet plank was such an obvious hazard, it was not a danger to a reasonable person.
LESSONS LEARNED
Post-settlement reviews to assist a company in refining its health and safety policies are crucial. Analysis of accidents and claims and identification of their cause enables the introduction of corrective measures to prevent a recurrence. Detailed accident reports and investigations are invaluable to this. Independent assessment of health and safety systems to look at premises and recommend changes in compliance with health and safety obligations is also advisable.
Effective rehabilitation and post-accident healthcare can benefit employees, increase motivation and save money in employer liability claims by accelerating an employee’s recovery and return to work. Early intervention, eg within the first four to six weeks of absence, is often critical to the success of rehabilitation.
REAP THE REWARDS
Effective management and defence of these claims results in reduced claims and premium costs, increased staff motivation and reduced absenteeism levels.
By way of illustration, for one client with whom we work closely, in a 12-month period we secured three abandonments with costs awards, a win after trial and a significant reduction in claims in the following year.
Evidence of good health and safety management, health and safety accreditation schemes and risk management policies can reduce premiums. It has been reported that a good claims history, coupled with well-documented health and safety procedures, can give rise to an employer liability premium discount of 20-40%. Start renewal negotiations early, present full information and evidence of a robust claims management system, policies and practices.
If your trade association or sector grouping has applicable risk management procedures to a standard recognised by the insurance industry, this can result in lower premiums. Clubbing together with businesses of a similar genre to buy employer and public liability insurance, can result in a better premium for all. If you are in a high-risk sector, find a niche or scheme broker specialising in your area.