Time to introduce an employers liability pack

There is a constant battle between claimant and defendant lawyers and insurers in relation to personal injury claims. The arguments include costs being too high, damages too low, third party claims capture being unfair, no liability decisions within the Protocol period, and cases being fraudulent or exaggerated. Claims against employers are additionally stressful for both the claimant and the employer as the trust between employer and employee diminishes, health and safety practices are called into question, the company is sued, their insurance premiums increase and in some cases, employees are sacked from their employment for bringing a claim. However, there is a solution to the adversarial nature of this work which benefits all concerned.

Maximise and minimise losses

At the heart of the litigation is a claimant who has been injured while at work. Last year

241 people were killed in accidents at work. Those killed, severely injured or suffering minor injuries involving transport in the workplace last year add up to 5,573 people. On average that's 17 accidents every day, or one every 71 minutes. This is not a good thing. The compensation process that develops thereafter is borne out of a need for one party to maximise and the other party to minimise the losses. The investment by insurers in defending claims, arguing quantum and paying third party costs is

spiralling. Premiums are increasing to reflect the insurance outlay. Insurance risk managers and brokers are becoming increasingly important to businesses trying to obtain lower premiums '“ often on the back of a chequered claims history.

Following the Protocol letter of claim, insurers try to investigate the claim and obtain relevant documents for disclosure. They seldom do so by the three-month deadline. Costs then increase when claimants issue a Pre-Action application. Even when a case has a strong defence, costs are lost on pre-action applications when the insured and insurer fail to disclose the supporting documents at the appropriate time. It is beneficial to have such information to hand to disclose immediately.

Claimant solicitors also face problems with employment liability cases when they are bought from referral companies. It is difficult to assess accurately the likelihood of success until the disclosure from the employer is forthcoming. These claims cost solicitors many hundreds of pounds, but some referrers have an 'unwind' period for cases to be replaced if the case is unsuccessful. It would be advantageous to obtain early decisions on liability to reject cases which are unmeritorious. Indeed, it would be better for all concerned if only cases with a reasonable prospect of success are initiated.

How can this situation be resolved? By the introduction of an 'employers liability pack'. This pack is the key to reducing the number of accidents, reducing the number of claims, successfully defending unmeritorious claims and settling genuine claims quickly, fairly and accurately. It also ensures that those firms who do not hold health and safety in high regard pay higher premiums, whilst those firms which have a good claims record achieve much lower premiums.

Review health and safety strategy

This is how it works: firms who sign up to the pack agree to review their health and safety strategy and training procedures. They need to be fully documented and fully risk assessed. The workforce needs to be consulted in groups to determine the health and safety risks in their relevant sectors and relevant improvements implemented. There needs to be a culture of health and safety promotion so that employees are not afraid to raise health and safety issues, concerns or good ideas. Staff, once trained, must then sign a document to confirm their training and understanding.

But what of staff who are illiterate or have a language barrier? The logistics industry turns over £75bn a year in the UK alone and employs 2.3m people, or one in 12 of the working population. Customers expect their goods to be delivered on time, with accuracy and efficiency, but conservative estimates suggest that 330,000 logistics employees lack basic reading skills and 450,000 lack basic numeracy skills.

The Merseyside Social Inclusion Observatory Report Supporting Migrant Workers in the North West of England (2006) suggested that some 36,555 Central and Eastern European migrants in the North West registered for work through the Worker Registration Scheme from April 2004'“06 (excluding the self-employed). This represents a three-fold increase in numbers registering per quarter compared to the situation prior to this date. The key barrier that virtually all employers identified related to language. While certain employment agencies/larger employers pointed out that they provided some assistance with language skills (for example, through subsidising English for Speakers of Other Languages provision), smaller companies often struggled due to resource constraints, and similar findings emerged in relation both to the provision of training in the workplace more generally and to knowledge of relevant employment legislation.

Suitable training

Even larger employers identified that they would benefit from further assistance with the translation of key documents relating to terms and conditions of employment and employment law. Hence the majority of respondents indicated that they would like additional support in respect of recruitment, employment law, language support and translation, health and safety, welfare concerns and good practice.

In gaining the understanding of workers towards health and safety training whether they are literate, illiterate or have a language barrier, it is imperative that suitable training is provided so that the worker is conversant with the rules and procedures and is kept safe. Therefore, videos and one-to-one sessions are appropriate and records should be kept of these.

Refresher courses every 12 months

Following a company's introduction of the Employers Liability Pack, every 12 months companies a refresher course is provided for each member of staff, and the training documents are renewed and re-signed, just before the date of insurance renewal. The documents highlight any training need. Once every three years, all employees undergo full health and safety training to account for any changes in the law, health and safety legislation or good practice, and to take account of new machinery and firm practices.

This information is then put with the employee's earnings information, contract of employment, list of duties, risk assessments, documents in line with the 1992 Regulations, REACH documents and other documentation specific to the industry (such as driving licences and Highway Code training sessions for transport industry, or police checks for those working with children). The health and safety manual is updated and approved by the company, and any amendments are provided to all staff in all formats.

All the relevant data is then added to the company's insurance renewal or proposal form, previous risk history, and staff handbook (including policies on search, capability, lay off, wastage, protective equipment, sickness, disciplinary, whistleblowing and age) and sent to the underwriters for insurance renewal.

The insurers then have a meaningful document in which to assess risk and place the insurance. They can apply a discounted insurance policy to reflect the level of health and safety investment and information available to defend claims. They also have the benefit of having readily available within the underwriting department documents that would be disclosable upon receipt of a claim and that can be disclosed almost immediately. If, following assessment, there is no defence, they will be able to admit liability quickly to save further cost.

At this stage, the insurer benefits by having additional information upon which to base its premium and risk, and information at a later date upon which to rely to defend or admit claims. This information securely stored also saves the problem of documents going missing, being kept on different sites, memories fading and staff leaving. Even future disease cases will be assisted by having relevant training and documentation preserved.

Benefits for solicitors and employers

The employer benefits from having up-to-date health and safety, a workforce committed to health and safety improvement each year and lower insurance premiums, lower claims and (one hopes) a happier, more positive workforce. In the event of an accident, only those genuine claims with a reasonable prospect of success will succeed and the company will be in a better position to recognise this and to assist the employee with recovery and rehabilitation.

The employee benefits from a safer workplace, investment in training and, in the event of an injury, a more focused and caring employer and insurers with quicker decisions on liability.

Claimant solicitors benefit from early disclosure to ascertain risk and the prospects of success. If liability is denied then there should be the documents to support that contention and the client can be advised accordingly. If it is admitted the claim can swiftly proceed to quantum assessment.

The industry as a whole must embrace health and safety training. The Health and Safety Executive is constantly striving to better the working environment and improve safety standards and those standards must improve. The argument should move from solicitor costs to employers' improvements in the reduction of accidents and swifter claims handling. Then lower costs will follow for the most meritorious of actions.