14/03/2011

Defending claims, managing risk and reducing costs

Lord Young resigned on 19 November 2010 following comments the British public ‘had never had it so good’. He was involved in a high profile Health and Safety review which included consideration of whether there really was a compensation culture. It is not clear what, if any, of his recommendations will be implemented subsequent to his departure.

Whilst Lord Young considered low hazard employment such as office and shop work should not adhere to the same regulations as high hazard employment and the Government proclaim an end to red tape in the forthcoming Budget, the European Union have proposed a new Directive on musculoskeletal disorders (MSD).

The Directive is aimed at simplifying requirements by merging existing Directives on Manual Handling and use of VDU equipment into one. However the opposite is likely to be true. The Directive will increase the burden upon employers by applying all the requirements of existing directives and adding to them. The draft includes a requirement for risk assessments to contain consideration of psychological factors something which campaigners are vigorously opposed to not only because such assessment must by its very nature be subjective.

In certain circumstances however subjective assessment is not a bad thing perhaps not in the context of manual handling but in terms of workplace culture it could be of assistance.

Stress and MSD are the two most common causes of work related illness and there is growing consensus that the two are intrinsically linked. Proposed legislation aside, accidents at work cost time and money both of which could be put to better use.

Good business strategy will protect employees from injury, reduce absence, boost productivity, reduce insurance premiums and ensure your reputation remains intact.

Employer Liability (EL) claims rise as a consequence of an employer’s breach of common law or one of their statutory duties. Britain’s shift from industry to service sector have led to a natural fall in risk exposure and improvement in health and safety.

There is not always correlation between health and safety standards in a workplace and the number of EL claims pursued. For example between sites across a large organisation, there is often significant variation despite there being generic procedures/health and safety policies in place.

There are several factors at play in this phenomenon which if addressed can reduce a company’s exposure substantially.

Approach

All too often companies faced with a claims culture seek to lay the blame at the feet of their workforce and/or upon trade unions that are perceived as actively encouraging their members to claim compensation.

A much better approach is to look at the strategy in place with a view to pro-actively managing health and safety. At Gordons our Defendant PI team go beyond defending El claims. We advise and assist clients with identification, risk analysis and reduction, including advice on operational issues where appropriate.

Identification

The obvious starting point is with identification of hazards. Given the statutory obligations in place it is more likely than not a company already has procedures in place to identify equipment and process which have the potential to cause harm. Many companies however do not take steps to identify their workplace culture. Where they to do so they many find it is relatively simple to establish when and where claims are made in a volume disproportionate to accidents and/or identified risks.

Attitude

Companies should consider whether the way in which they deal with accidents in the immediate aftermath has a knock on effect upon the number of claims submitted. For example if a company refuses to pay sick pay for a genuine absence following an accident at work, the employee may seek legal advice in order to recover lost wages but the eventual claim will include damages and costs. A final award is likely to be many multiples of the amounts saved by merely paying SSP to the injured person.

Analysis

As above in the identification process, analysis is twofold. Where a risk or hazard has been identified consideration must be given as to whether it can be eliminated. If not, a company should introduce less hazardous alternatives. If that is not possible, the hazard must be contained so far as possible by limiting exposure, comprehensive training and providing safety equipment.

Companies should look to their personnel procedures as they often have a bearing on the number of claims made. Stress, bullying and harassment claims often arise out of personnel procedures, particularly where grievance is involved. It is not unknown following an accident at work for a tribunal claim to fail but a personal injury claim from the same facts to succeed.

Reduction

Health and safety must be a key element of workplace strategy. Employers must review their liability controls on a regular basis. Control must include deliberations upon the behaviour of all staff towards health and safety.

It is essential that accidents at work are properly documented but all too often for some Managers and Supervisors, participation in the health and safety process begins and ends at that point. Adopting formal procedures for the use of absence management and occupational heath underpinned by a successful defence strategy will reap benefits.

Our team rejects the high volume, commoditised approach of most other PI firms. The result is an experienced group of Defendant PI lawyers who will work with you to ensure your company is in a better position to understand and manage your EL risk exposure.

If you have any questions about future risk management for your business contact Marie Colleran on 01274 202 182 or email marie.colleran@gordonsllp.com.