FOCUS RISK MANAGEMENT THE QUARTERLY NEWSLETTER FROM GALLAGHER BASSETT. High Court makes an important decision on the trigger date for

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1 FOCUS RISK MANAGEMENT THE QUARTERLY NEWSLETTER FROM GALLAGHER BASSETT ISSUE 33 JAN 2009 INSIDE COURT OF APPEAL RULES ON MANHOLES ANOTHER PERSONAL INJURY CLAIM UNDER THE USE OF WORK EQUIPMENT REGULATIONS NATIONAL STANDARDS FOR REHABILITATION SERVICES NOISE INDUCED DEAFNESS AND LIMITATION IT S NOT THE HEIGHT THAT DOES THE DAMAGE- IT S HITTING THE FLOOR High Court makes an important decision on the trigger date for employers liability policies Durham v BIA and Others 2008 Six cases were brought to the High Court following the reaction of certain employers liability insurers to the case of Bolton Metropolitan Borough Council v Municipal Mutual Insurance 2005 (see Summer 2005 edition of Focus). The issue in the Bolton case was the trigger date for latent disease in relation to public liability insurance. That case found that the trigger date should be the date when the disease was manifest, in other words when pre-cancerous cells developed, which was about 10 years after the exposure to asbestos inhalation. Following the Bolton case, a group of insurers relied on the judgement to reject claims made against them under employers liability policies where the disease became manifest some years after the exposure to asbestos and at a time when the employers concerned were no longer insured by those insurers. In a long and complex judgement the High Court found that employers liability policies using the words injury sustained or contracted or something similar should be interpreted to mean the same as caused during the policy period. The caused date is the date or period of asbestos inhalation and this is the trigger date to determine which insurance policy should operate. The main findings included the following: Public policy underlying previous mesothelioma case law has been such that, as far as is possible, victims should not be left uncompensated. In a number of cases the employer no longer existed when the tumour developed and if the insurers at the date of inhalation did not offer indemnity, these employees would not be able to recover damages at all. When interpreting policy cover the relevant factual matrix, particularly for workers compensation, is that employers liability insurance is intended to cover injury to employees during the policy period. Although the Employers Liability (Compulsory Insurance) Act 1969 does not dictate a particular trigger, an inhalation trigger is the best way of ensuring cover is maintained because an injury trigger would have to be continuously reviewed to achieve interrupted cover. Implications of this judgement include: Asbestos victims will be compensated and those employers affected will no longer be forced to selffund costly mesothelioma liabilities from other budgets. The judgement will apply to other occupational diseases where there is latency between the period of exposure and the manifestation of the injury. It is unclear how this decision will affect the Bolton case which is distinguishable as it related to public liability policies. The defendants have been granted permission to appeal to the Court of Appeal and we will, of course, report further when the appeal is determined. On a practical level, given that the trigger date could be 40 or more years ago, this case highlights the importance of being able to identify which insurer was on risk at the time of exposure to the injury. Often, and particularly following a merger, take-over or some sort of re-organisation of functions within and between public bodies, records become lost and evidence of a contract of insurance being in existence at the material time is difficult to find. Even if past records cannot be located policyholders should ensure that contemporary records will be available if and when required in the years to come. The current case law suggests a lifecycle of at least 50 years should be considered.

2 02 FOCUS RISK MANAGEMENT Police win important decisions in the House of Lords Van Colle and Another v Chief Constable of Hertfordshire 2008 and Smith v Chief Constable of Sussex 2008 These cases are important decisions which, had they been lost, an adverse legal precedent would have been established exposing the police and other public authorities to the risk of massive sums in compensation. In both cases the police faced claims for damages for failing to act on threats which led to the harm or murder of a witness. Noise induced deafness and limitation In the Van Colle case (brought by the parents of the witness) Mr Van Colle had reported a number of threats being made against him. The Law Lords determined that the police could only be liable if they were aware of a real and immediate risk to life and had failed to take steps to deal with that risk. The parents of Mr Van Colle also brought an action under Article 2 of the Human Rights Act 1998 (right to life) and had been successful in both the High Court and the Court of Appeal. They had been awarded 25,000 in compensation. The Law Lords, however, overturned this decision on the grounds that the murder was at the hands of a seriously disturbed individual; it was unreasonable to suggest that the police could have anticipated that the risk was both real and imminent. Field v British Coal Corporation Court of Appeal July 2008 The court of appeal overturned a judgement of the Doncaster County Court which had declared Mr Field s claim as being time barred. The Smith case, also involving harm to a witness, was decided in the context of the public interest. If the claim was successful the police would have to treat threats against witnesses with special caution at the expense of the many other threats to life and limb which they become aware of through their own and others endeavours. Again, the Law Lords ruled in favour of the police. If either case had been decided in favour of the claimants, the police, and other public authorities, would have had to devote considerable resources to dealing with complaints or be constantly under the threat of costly litigation. Mr Field started work at a colliery in 1982 when aged 16. He had suffered for many years with minor ear problems. His employer carried out periodic hearing tests and in 1998 an audiogram revealed no abnormality. In 2003 Mr Field noticed ringing in his ears. Later that year his union referred him to an ear nose and throat surgeon who diagnosed noise induced hearing loss. Mr Field issued proceedings for his claim in August The claim was declared as time barred by the Doncaster County Court on the basis that he was aware of issues about his hearing in The Court of Appeal could not accept that Mr Field could reasonably have sought a second medical opinion in 1998 and allowed the claim to proceed. Another personal injury claim under the Use of Work Equipment Regulations Lees v Northamptonshire Heartlands NHS Primary Care Trust 2008 This case, heard in April 2008, is yet another reminder of the far reaching extent of the Use of Work Equipment Regulations The claimant was employed as a senior Dental Officer. Whilst undertaking a tooth extraction she felt a very sharp pain in the top of her neck and head which ran down her arms, spine and left leg. She had to break off what she was doing and slowly straighten up. Following the incident she was found to have a disc bulge and degenerative changes which led to her undergoing surgery. The claimant argued, amongst other things, that her injury was caused by deficiencies in the podiatry chair supplied by the defendants. The defendant argued that the injury was caused through the unavoidable needs of the job. The High Court found that, in the absence of any evidence implicating any other person or cause, the chair was clearly defective. The only logical conclusion was that the injury was caused by the unusual posture the claimant was forced to adopt due to her perceived shortcomings of the chair. This is another case which highlights the need for employers to be vigilant in making assessments as to the suitability of work equipment.

3 FOCUS RISK MANAGEMENT 03 National Standards for Rehabilitation services The United Kingdom Rehabilitation Council has been taking advice on the proposed launch of a set of national standards designed to improve the quality of rehabilitation services. The council hopes the standards will also assist service users in the selection of a service provider. The standards are designed to apply to: all sectors, public, private or not for profit settings; all clinical and vocational rehabilitation services; single and multi-discipline services; and sole practitioners or larger, indeed very much larger, organisations. The standards are grouped into 5 component areas: Standard 1 what the service does The provider should clearly define the service or range of services they offer and are competent to deliver, and the geographical range of the services. In other words, they should define the scope of their practice. Standard 2 the skills held to provide the service The provider should demonstrate appropriate skills and competence relating to the services offered. This includes the qualifications, knowledge, experience and ongoing learning of the people engaged in delivering the services. Standard 3 how is the service delivered This includes definitions of the work practices for referral, assessment and reporting, and other service parameters including details of rates and charges Standard 4 how the customer and consumer are protected This is about the health, safety, welfare and integrity of the client customer. The provider should clearly define the service or range of services offered and the protection of the rights/ interests of other stakeholder customers. Standard 5 how the service is made to work The provider should state the business practices in place to ensure there is a structure and process which support the services offered. Given the range of service providers, there will be proportionality in the application of these standards, for example in relation to Standard 5, the processes of a sole trader will be less structured than those of a large organisation. The consultation process has closed and it is hoped to have final standards in place in the spring of We will keep readers informed of the final outcome. Court of Appeal rules on manholes London Borough of Ealing v Thames Water Utilities In our February 2007 edition of Focus we reported on a claim involving a tilting manhole cover. The claim against the London Borough of Ealing, the highway authority, succeeded in the County Court and an appeal was heard in the High Court in October 2006 which upheld the original decision. Subsequently the council sought to recover their outlay from Thames Water, the owners of the manhole. Thames Water defended its position on the grounds that: following a case of Reid v BT PLC (1987) it was entitled to rely on the council s system of inspection; and under the precedent set in the case of Nolan v Merseyside County Council and North West Water Authority (1982), any liability was limited to a 50% contribution. In the recovery proceedings expert evidence (not available when Mrs Atkins claim was originally heard) showed that the manhole chamber had not been installed correctly. Evidence was also brought to show that it was not reasonable for the council s highways inspector to spot the defect. Furthermore the water meter situated within the manhole chamber had been read on behalf of Thames Water on at least eight occasions since installation. In other words Thames Water had a system to inspect the apparatus within the manhole chamber and therefore had every opportunity to inspect the manhole itself. The council was successful and made a full recovery from Thames Water. For highway authorities there are a number of issues: Claims of this nature should be referred to the relevant utility company. In the event of a dispute utility companies should be required to disclose meter readings and/or other works at the location, as well as details of training and instructions to utility company s employees and contractors about inspection and defect reporting Furthermore highways authorities can put forward an Atkins defence based around the proportionality of the costs of a detailed inspection system by highways inspectors in contrast to the number of claims received.

4 04 FOCUS RISK MANAGEMENT It s not the height that does the damage- it s hitting the floor Contrary to the many myths that have appeared, the 2005 Work at Height Regulations do not ban working at heights, nor do they ban the use of ladders. What they do is to require employers to assess the risks associated with working at heights and put measures into place to control the risk of a fall which could cause injury. A hierarchy of control approach is taken which sets out the following: News in Brief Personal injury claims reforms. According to the Ministry of Justice the reforms for the implementation of the reforms to the road traffic accident personal injury claims process and legal costs regime should be in place by October Some difficult discussions are likely to take place around the costs regime for claims under 10,000 and we will continue to watch progress and report to readers in future editions of Focus. Avoid work at height where possible Use work equipment or other measures to prevent falls where working at height cannot be avoided Where the risk of a fall cannot be eliminated, use equipment or other measures to minimise the distance and consequences of a fall should one occur. Steps and ladders remain a perfectly acceptable means of access providing they are suitable, in good condition, adequately secured and people understand the risks and know how to use them properly. They should not, however, be used as a work platform. The Health and Safety Executive has published guidance on interpreting the requirements and on implementing practical measures to control risks, including; a brief guide to the Regulations (INDG401) ; Using access equipment safely in building and plant maintenance ; and a guide on the safe use of ladders and stepladders (INDG402). These can be found at falls/guidance.htm; The Work at Height Safety Association also publishes technical guidance on equipment and safe practice for a variety of work activities Information If you would like further information on any of the articles contained in this issue, need guidance on whom to contact or just wish to pass on any comments, please call, Francine Lagna-Fietta Telephone +44 (0) Francine Lagna- Fietta@gbtpa.com New Loom House 101 Back Church Lane London E1 1LU Telephone +44 (0) Facsimile +44 (0)

5 FEEDBACK PERFORMANCE EVALUATION SURVEY We have now completed the Performance Evaluation Survey for 2008 and are pleased to report on the following findings. GB received a response rate from clients of 37% Of those clients, the average number of questions answered was 11 (there are 14 in total) PERFORMANCE EVALUATION SURVEY % 2% 34% 55% Clients were requested to break down their answers into categories excellent, good, fair and poor The chart opposite shows those results Excellent Good Fair Poor As with other years, GB encouraged clients to put forward their views or comments on any part of the services provided, or any other improvements they would like to see. Where such comments have related to claims or risk control issues, these have been passed through to the relevant departments and have been dealt with directly. With regard to centrally related issues, i.e. Risx-Facs issues, coding etc. these have been followed up by Account Management. It was found that many related to fairly straightforward Risx-Facs queries and running of reports and we have now solved many of the queries. It did, however, appear to us that there was an overall need for further knowledge on the Risx-Facs system and further training schemes are currently being considered. If you or your colleagues would be interested in further Risx-Facs training, perhaps you could us at crm_uk@gbtpa.com. We would like to thank those clients who took part in our annual survey and hope that you continue to be satisfied with the service you are receiving from Gallagher Bassett. However, if you feel there is anything you would like to discuss with regard to the service you are provided with, or any other general issues, please do not hesitate to contact either your local Branch Manager, or the Account Management Department. New Loom House 101 Back Church Lane London E1 1LU Telephone +44 (0) Facsimile +44 (0)