11/02/2007

Defending personal injury claims – the bigger picture

Rachel Hudson, personal injury partner

In the last five years the personal injury claims culture in the UK has increased significantly. Wherever you turn you see or hear adverts on the television, radio or in the press encouraging people to make a claim – “where there’s blame – there’s a claim”.

The impact of this on business has been such that in certain sectors public and employer liability insurance premiums have risen significantly. One way to counteract premium rises has been to have a higher insurance excess. The end result is that whilst the business avoids getting hit by a significant increase in the premium, the potential financial cost to the business in the event of successful personal injury claims is greater on a claim by claim basis.

There is however an advantage to accepting higher insurance excesses in that it has enabled businesses to insist that their insurers allow them to use their chosen legal advisers rather than a panel firm which is appointed by and looks after the insurers. The result is that the chosen legal advisers are not just considering the immediate financial implications of dealing with a claim in a particular way, they are also and importantly looking after the client by considering the business’s wider requirements – the bigger picture!

For example, it is important to consider:-

  1. Floodgate arguments – would settling one claim result in a number of similar claims being advanced by others? Whilst settling one claim might appear good economic sense, looking into the future it could well result in significant cost
  2. The message that might be given to the workforce or the public in dealing with a claim in a particular way
  3. Operational issues – has an accident identified a problem with a system or training function which needs to be resolved?

By choosing your legal advisers carefully you can ensure that your overall business requirements are looked after.

What do you do if an employee claims to have had an accident at work because he has not received any training on a particular piece of equipment?

Is there any suggestion that the person making the claim is not telling the truth? If so, it may be necessary to take a hard line to illustrate to the workforce, particularly where there is a strong Union presence, that the business is not an “easy target”. If compensation is offered voluntarily where it is believed there is a significant element of fabrication to the claim and this becomes common knowledge throughout the workforce our experience is that other employees may well follow suit in the hope of seeing financial gain. Over the last five years we have taken this firm stance for a client at one particular site. The result has been to reduce significantly the claims culture which had developed which in turn has resulted in a reduced number of spurious claims.

Was any training given? In some cases inadequate or no training has been provided. This may highlight a problem with the business’s training function which can be brought to the relevant department’s attention and remedial steps put in place to prevent a similar oversight in the future.

Alternatively, in some cases training has been given but unfortunately not documented. Such lack of training records could have a potential impact on defending a personal injury claim. To avoid a similar situation in the future we would liaise with the business’s training function and make recommendations as to what additional documentation might be advisable in the future.

Are the Health & Safety Executive involved? If so, it is important to liaise with those legal advisers dealing with any criminal prosecution to ensure that action in the personal injury claim does not prejudice any criminal defence. At Gordons we are often required to work hand in hand with our colleagues in our regulatory team.

Is the injury such that consideration is being given to terminating the employee’s employment on grounds of ill-health? As legal advisers in a personal injury claim guidance can be given to the human resources function which can mitigate exposure in that area.

These are just a few examples of the issues that those in the Defence Personal Injury team at Gordons consider on a day-to-day basis. Whilst we ensure that we look after the insurer’s interests, our priority is to look after the best interests of the business client. Accordingly, we do not simply consider the personal injury claim in isolation – we consider the “bigger picture” and look after our business client’s requirements on many different levels.

Consideration of the wider issues results in our team being able to look after our client’s interests on a much larger scale. This results in savings to the business on financial and operational levels in both the immediate and long term.

Gordons regularly advises on personal injury issues. If you require any further information or advice please contact Rachel Hudson on 0113 227 0100 or at rachel.hudson@gordonsllp.com.