Accidents at work: suing the boss

Employers are facing an increasing number of challenges in the running of their businesses. Increased competition, complex legislation, and rising costs all conspire to make life difficult for business people. Ignoring these problems does not help however; they do not go away but catch us out when we least expect them.

Successful business people prepare for these challenges and deal with them as they arise. This involves an element of "crystal-ball gazing" - trying to foresee threats and risks to the business so that we can develop strategies to cope with them.

Keeping an eye on news and current affairs that provide clues to local and international trends can help with this. For example, anyone reading the local newspapers over the last few years cannot have failed to notice the increase in the number of health and safety related stories.

Reports of accidents, the introduction of new legislation, and of awards made to injured employees all show us that this seems to be an issue of increasing public concern. In fact, health and safety at work is a good example of one of the increasing challenges facing business which if neglected, can result in major losses to the business, both financial and in terms of its credibility.

When an employee is injured at work or suffers ill-health because of his or her work, there can be some legal consequences for the employer. If for example, the damage has involved a breach of the Occupational Health and Safety Act 2000 or a Legal Notice, the employer might be subjected to a criminal prosecution which could result in a fine or even imprisonment.

Most of us, including employers, understand this, but health and safety incidents sometimes also result in civil claims for compensation brought by the 'victim', and it is this second type of liability that is the subject of this article.

The growing "claims culture"

There has been a rising trend over the last 30 years in most developed countries, perhaps beginning in the USA, for people to want to claim financial compensation for injuries and ill-health that befall them. This is especially so when they occur through the work that they do.

The term, 'claims culture' is commonly used to describe this phenomenon but it suggests that people now sue at the drop of a hat; studies have shown however that this is not so. It is probably more accurate to say that where harm has been caused through an identifiable failure, there is an increasing desire for those responsible to be held accountable.

Claims for damages or compensation fall into the category of "civil claims", and they are very different from criminal prosecutions. Civil claims are, for example, brought by individuals, whereas criminal prosecutions are brought by the state through its various agencies (in the case of health and safety, by the Occupational Health and Safety Authority).

It is not necessary for there to have been a criminal prosecution for a civil claim to be made. Awards in civil cases often far outstrip the levels of fines imposed by the criminal courts.

In Malta, the maximum fine levied in the criminal courts is Lm5,000, and a typical prosecution might lead to a fine of a few hundred liri. Civil cases however, even in Malta, can involve awards of several thousand liri.

In many countries civil claims have increased both in number and in value. In the UK for example, a widow was recently awarded £160,000 as damages for the death of her husband from malignant mesothelioma resulting from exposure to asbestos during the 1960s and 1970s.

Also in the UK, a man who was knocked unconscious as a result of an accident at work received £40,000 compensation from his employers. Malta is not immune from this trend, and one has only to examine the local media to realise that the concept of "blame" for accidents and the consequent requirement for compensation, is taking root here.

Insurance companies operating in this market are therefore likely to be involved in an ever-increasing number of claims, and they will put pressure on employers to reduce the risks to health and safety that exist in their businesses. Worse still, where employers are not insured, they may be held personally liable.

Sympathetic courts

Courts in many jurisdictions appear to be sympathetic to compensation claims arising from accidents and ill-health that are caused through employment. Subject to the normal "elements to prove", the view is often that everything that occurs at work is ultimately under the control of the employer (or should be), and he is therefore ultimately responsible.

Even where an employee might be at fault, perhaps causing an accident by some act or omission, the ultimate responsibility often still rests with the employer. In such cases it is sometimes said for example, "that he failed to arrange adequate supervision to prevent the act or omission which led to the accident".

This sympathetic view may have developed as a result of a perception that there is an "inequality of bargaining power" between the parties. Employers determine the terms of employment contracts, they create the work environment, and they manage as they see fit.

Employees often do not have much say in these things and they work for an employer out of a basic need to earn money. Some people have interpreted this situation as being disadvantageous towards employees, and when these disadvantages manifest themselves in poor working conditions that lead to accidents, it is not difficult to see how there might be a tendency to want to compensate them.

The courts also to some extent reflect public opinion, and the growth of the desire for accountability in those in positions of influence and power (including employers), is being increasingly seen in the decisions of the judiciary.

Rising level of awards

The level of awards made to claimants has risen dramatically over recent years. So much so, that UK insurers for example, settle 95 per cent of claims out of court in an attempt to save on costs.

Administrative records in Malta indicate that 983 persons had an accident in the course of their work during the first quarter of 2006. Statistics published by the National Statistics Office show an increase in accidents of 59 (6.4 per cent) over the same period in the preceding year.

Many of these accidents at work occurred in manufacturing (32.9 per cent), construction (17.6 per cent), wholesale and retail trade (8.4 per cent), and transport, storage, and communications (8.2 per cent).

The manufacturing sector remained the one which is most accident-prone. People at work are mostly affected by injuries in the upper extremities of their body. Wounds and superficial injuries are the most common types of injuries.

The Occupational Health and Safety Authority (OHSA) reported that in the period January to March 2006 two men and one woman lost their life in the course of their work. During the same period in the preceding year, three people had died at work.

Occupational ill-health has also to be considered; in fact some of the largest awards have been for conditions such as occupational stress, upper limb disorders, exposure to toxic and harmful substances, and occupational asthma.

The courts are beginning to make awards that not only reflect the pain and suffering associated with the immediate effects of the accident/ill-health event, but also the long-term, personal and financial losses of the individual affected.

What can employers do?

The extent of employers' potential civil liability should be of concern to all sensible employers, and they will want to reduce the risks to their businesses and to themselves. They cannot reasonably be expected to prevent every possible risk in the workplace from arising however, and nor is this required by the law.

An honest, common sense approach is what is required, leading to the development of a structured, systematic method for the management of health and safety at work. Recognising that it is a strategic issue to be managed like any other is a good start, because aims and objectives can then be set down in policy, and actions can be taken to deliver on them.

Attend the conference

The Institute of Health and Safety (IHS), in association with the Foundation for Human Resource Development (FHRD), is hosting a conference on these topics on May 2 at the Hilton Malta hotel.

There will be a number of eminent speakers at this half-day conference, and employers and managers will gain important insights into civil liability for health and safety at work. Anyone interested in attending should contact the FHRD.

e-mail: chudson@ihs.com.mt