Posts Tagged: liability

Mobile phones and driving impacts on employers liability

Thursday, December 24th, 2009

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Mobile phones and driving is again a high profile issue on BBC TV today and is a subject I have long campaigned about due to risk to life and property by offenders.

As a TUC recognised Safety Rep (Unite – amicus section) I raised it at the HSE SERTUC Annual Safety Reps Conference to the HSE Chief Exec (Judith Hackitt) , Govt Safety Minister (Bill McKenzie) and the specialised lawyers (Thompsons).  The law and sentencing is steadily becoming more consistent due to the influence of  the Law Commission.

The background is even better.  Prior to the new legislation I took the opportunity of raising the issues with the former Asst Commissioner of the Met Police (Tarique Gaffur) and Bromley Borough Commander (Charles Griggs) at the Bromley Community Engagement Forum AGM.  As an AVIVA shareholder I raised the subject by invitation of the Group Company Sec at the AVIVA AGM and thus it is corporate record.

A paper was submitted in few weeks in advance and the response by the Chairman was stunning for all concerned.  Lord (Colin) Sharman is a Lib Dem Spokesman in the House of Lords and the day before the AGM he had spoken in the Reading Debate on the Corporate Homicide and Corporate Manslaughter Bill, returning to the debate that afternoon after the AGM lunch.

The essence is that while some big businesses have acted accordingly many small and medium enterprises (SMEs) have not realised that the Corporate Homicide and Corporate Manslaughter Act (CHCMA) can be invoked on the Employer by an Employee driver committing an offence using a mobile phone, even hands-free kit, while driving.  It is essential concerning EMPLOYERS LIABILITY that Employers include in DISCIPLINARY PROCEDURES that using a mobile phone of any kind whilst driving on business is a CATEGORY 1  OFFENCE subject to DISMISSAL.

The various scenarios of mobile phone usage at time of occurrence are:-

Police check point at road junctions  -  Likely charge DRIVING WITHOUT DUE CARE AND ATTENTION  Fine and Driving Licence Penalty Points on conviction  -  employ at risk.

Occurrence  with damage to third party property but no injuries  -  DRIVING WITHOUT DUE CARE AND ATTENTION  Fine and Driving Licence Penalty Points on conviction  -  employ at risk.

Occurrence with damage to third party property and INJURY  -  COULD BE CARELESS OR DANGEROUS DRIVING  Fine and Driving Licence Penalty Points or BAN on conviction  -  employ terminated

Occurrence causing FATALITY  -  DANGEROUS DRIVING almost certain charge  IMPRISONMENT (usual tariff now 6 YEARS) and DRIVING BAN on conviction  -  employ terminated

Note that the DRIVING BAN has now been determined to apply AFTER release from prison whereas previously it was a nonsense as the driving ban ran concurrently to the prison sentence.

A driver on business committing the offence is personably liable as set out above.  However, those acting concerning the FATALITY could raise a CORPORATE HOMICIDE and CORPORATE MANSLAUGHTER case against the EMPLOYER to test whether the Employer had taken EVERY REASONABLE PRECAUTION through clear DISCIPLINARY PROCEDURES and instruction for the use of vehicles on business (including own),  otherwise it could appear the Employer condoned the use of mobile phones while driving as part of business practice for communication purposes.  Several years ago before the laws were passed I raised the scenarios with the Senior Internal Auditor at Bromley Council who was horrified at the potential risk to the Council insurances by any offending employee.

This is definitely one for EGIS and the Underwriters.  The big businesses will have protected themselves it is more likely that SMEs have not as it may have fallen under their radar.

What started many years ago as one of my personal campaigns as a Safety Rep has developed through several networks as indicated to become law and help to save life, limb and property.

Although there were no injuries and only damage to other vehicles,  the case against Leader of the House, Harriet Harman MP will inevitably be a very closely watched test case.

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COMPLIANCE, RISK ASSESSMENT & RISK MANAGEMENT

Thursday, December 24th, 2009

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EUROPEAN UNION

There is genuine concern for EU independence and French State interests following the appointment of Michel Barnier as European Commissioner for Financial Services.  This is a full appointment, replacing Charlie McCreevy who previously acted in the role.  The broad concern in the UK is that General Insurance is not the Banking Sector and any regulation needs to be effective, proportionate and professional.

GOVERNMENT and the FINANCIAL SERVICES AUTHORITY (FSA)

The views of Lord Turner, Chairman of the FSA, are widely known as a result of the economic and financial crisis.  The tripartite model of Treasury, Bank of England and FSA failed as without clear and specific responsibilities the problems went through the middle.   Any future government must ensure that the regulatory model has clear and specific responsibilities, however they are structured in organisational terms.  Within UK and EU considerations, it is appropriate to distinguish General Insurance from Life Insurance, equally, Retail Banking from Investment Banking.

In the UK, regulation has developed by industry default.  By my enquiry to senior officials in the original Securities and Investment Board, it was clear that all Property related business was excluded, the principle being that business was covered by Trust law. As matters have developed with the FSA, many aspects have been brought into regulation. ‘Precipice Bonds’ failing to cover mortgages was an early warning. Only recently has the FSA covered equity release schemes, second and subsequent mortgage lending, home reversion schemes.  In Life Assurance, mis-selling within industry has led to progressive regulation of most aspects of the Life Assurance, long term business.

AVIVA GROUP

A Special Report by Andrew Cave in The Daily Telegraph 23 October 2009, ‘Assessing the Carbon Risk’ reported on the career background and views of Lord (Colin) Sharman of Redlynch.  With a long background in what became KPMG, he is Chairman of Aviva Group, non-executive director of BG Group and Reed Elsevier.  Elected to the House of Lords in 1999 as a Liberal Democrat peer, he has acted as a Spokesman on aspects of Trade and Industry.  A significant role was in Committee forming the Companies Act 2006 and regarding the Corporate Homicide and Corporate Manslaughter Act.  This Special Report covers key aspects of risk in the framework of Corporate Governance, Corporate Social Responsibility, Climate Change and Energy Conservation. He is quoted ‘There is no point in having a list of responsibilities if you don’t report against them.’

LEGAL & GENERAL

Group Chief Executive, Tim Breedon, reporting in The Daily Telegraph on 13 December put forward various comprehensive arguments for the role of Insurers in the economic recovery.  Fundamental is that the State may only be able to target the most needy in Welfare terms and a shift in the present balance of roughly 65% government and 35% industry support.  Quoted, ‘Our industry needs to do more to encourage high standards of governance and corporate behaviour, as well as supporting the managers of those companies which do successfully deliver benefits to customers and shareholders.’

HEALTH & SAFETY EXECUTIVE

Faced with a limitation on resources, there has had to be a sharp focus on Advice and Guidance, promotion of ‘Best Practice’ businesses and organisations, with a sign-up to HSE Strategy.  The underfunded Inspectorate are unable to attend the majority of work place fatalities. Convictions and fines remain relatively few and modest.  It is essential that future government addresses the focus and effectiveness of safety regulation.

The essential and primary purpose of the HSE, and Air and Rail regulators, is clearly to ‘SAVE LIFE, LIMB and WELLBEING’.

Any future government should ensure that all work place fatalities are investigated, including work-related suicides.  Stress and mental health remain a very high risk factor.

The bonkers, conkers and other nonsense has developed due to misunderstood or badly interpreted safety principles and Risk Assessment.  Some is clearly used as an excuse to cancel or avoid events on the grounds of perceived liabilities and insurance costs.  Some is the result of over concern rather than any application of HSE available guidance. Thus there is a key role for the General Insurance industry to play, in partnership with future government.  There has been a tacit failure of support owing to de-regulatory concerns.

ASBESTOS

Speaking as a shareholder at the Aviva Group AGM in 2009, I requested that Aviva do all it can to assist the Association of British Insurers (ABI) to identify the insurers of historic businesses involved in claims.  An identification rate of only 40% harms industry repute.

The advantage of incorporating statistics in media campaigns has been suggested to the HSE.  It is interesting to note a recent HSE Asbestos campaign.  ‘Estimates show that each week approximately 6 electricians die from this hidden killer.  Asbestos is responsible for an estimated 4,000 deaths ever year, and it could still be hiding in anything built or refurbished before the year 2000.’  The Independent on Sunday dated 22 November 2009 carried a report by Emily Duggan ‘A betrayal of our working class’ -    Asbestos will kill 90,000 Britons.  The authorities knew it was deadly more than 100 years ago, but it was only banned entirely in 1999. The annual death rate will peak at more than 5,000 in 2016 – now MPs have a chance to do the decent thing.  The Sun has also run a successful campaign concerning asbestos in schools.  Esso was given a Court Order to settle a case brought by a widow in October and Nestle faces a similar case.

A future government should ensure that insurers behave equitably and more promptly.

CORPORATE HOMICIDE and CORPORATE MANSLAUGHTER

Much of the effect and implications of the legislation are yet to be felt on a wide range of activities.  Many organisations and people were involved in the formation of the law. The TUC, Centre for Corporate Accountability (CCA) played a key role, HSE and others.  Lord Sharman was involved.  For the Aviva AGM in 2008, I helpfully raised the subject which accorded with the work of Lord Sharman in the House of Lords at that time.

I raised the implications of mobile phone equipment used whilst driving causing death.

Questions raised by shareholders, are of course, part of the formal corporate record.

Recent events and casework clearly indicate the diversity of potential application:-

Bus crash with lorry, Clapham (2009)  -  (20 hurt, 4 seriously)

A bus overturned after collision with a lorry, which was carrying two sections of rail extending over the cab and several metres in front of the lorry.  National Rail have apparently stated the responsibility for carriage lies with the haulage contractor.

Go-kart track, Cambridgeshire (2009)  -  (1 fatality)

Reported Go-kart track allowed to be used ‘out of hours’.  Teenage girl killed by scarf caught in engine.  Cambridgeshire Police investigating, criminal charges may result.

Residential Property (2009)  -  (6 fatalities)

The fire at Lakanal House, Camberwell and tragic six fatalities.  The single stairwell and ‘Stay Put’ issues are under review.   Reported in Private Eye, Southwark council has instructed Burton Copeland, Britain’s leading corporate manslaughter specialists.  Since the fire at Carisbrooke Gardens in Peckham, has added to the debate for improvements.

Dartmoor Endurance Trial (2007)  -  (1 fatality)

A teacher Is concerned with this tragedy, involving the death of a teenager.  ‘Controlling Mind’ is a feature with regard to pushing for the event to continue in very poor conditions, despite appeals from those involved. The Coroner has halted the current inquest and the case referred to the Director of Public Prosecutions.   The Coroner has also criticised the investigation carried out by Devon and Cornwall Police and that a file will go to the Independent Police Complaints Commission.

XV230 Nimrod spyplane crash Afghanistan   -  (14 fatalities)

The Daily Telegraph reported on 17 December 2009 to the effect that the Secretary of State for Defence has confirmed that two senior RAF officers blamed for safety failings in a key report are being investigated by Military Police.  The Secretary of State delivered his official response to the QC Independent Report in House of Commons 16 December.

RISK ASSESSMENT and RISK MANAGEMENT

Risk Assessment can be formally written or otherwise evidenced that it has been properly thought through.  It should very much be a good deal of common sense, experience and knowledge, supported by access to advice, guidance and information, as appropriate.

Levels of education, experience, knowledge and training are pertinent.

‘Controlling Mind’ and ‘Significant Failure of Management’ are key terms in the application and purpose of the law  -  the preventative nature of regulations.

A future government should not allow considerations of reduction in costs to authorities, businesses and organisations, to undermine the essential aim to save life, limb and well-being through good risk assessment, risk management and compliance.

It is a fact of life that tragic events occur.  However, it is prevention methods and their effectiveness that is crucial.  The case on cost savings has been well made.  It is not only the financial cost to business, insurers and the state, there is the human and wider social costs of affectation, family, friends and wider society.

There is a solid business case for the General Insurance industry to be pro-active.

The obvious benefit is a general reduction in potential claims costs arising from ‘Best Practice’ across the board adopted and performed by those insured.

Acknowledgement and premium reduction to those signed up to HSE Strategy.

Acknowledgement and premium reduction for properties refurbished to Decent Homes Standard.  New build with recognised safety features.

Greater involvement with government and agencies regarding planning and build on land subject to flooding annually or twice within any five years.  More sophisticated treatment to differentiate true risks within Post Code areas and Environment Agency mapping, rather than blanket declinature, which reflects badly on the industry.

Discussion with government for creation of FLOOD POOL for those risks that have become certain and frequent rather than fortuitous and insurable in historic terms.

This could operate similar to the arrangements for Terrorism Cover.

Improved guidance to customers for Disclosure of Material Facts.

Alan Ingram  -  Consultant

December  2009

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Employers Liability Insurance

Thursday, December 10th, 2009

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Employers Liability insurance (EL) is the most misunderstood cover that is available for the photographer today, so confusing are the rules and regulations that surround it even the Government are not sure! However, don’t let that put you off, as the Health and Safety Executive (HSE) would be quick enough to prosecute you if they thought you should have it and you didn’t and there was an accident with someone who was assisting you.

If you don’t have EL cover and you should have then you could be taken to court and prosecuted – the maximum penalty being 14 years in jail and an unlimited fine although this would usually be as a result of an accident to someone who was assisting you. However, you could face a large fine and be disqualified from running a company just for having incorrect insurance. For that extra premium it really isn’t worth it?

Do I really need it Employers Liability Insurance?

Firstly, if you are a husband and wife team, or your sons/daughters assist then you generally do not need EL cover. If you’re in doubt, then usually a good way round it is to insure them jointly with you – that way all the cover applies to them as well as you. The exception to this is if you are a Limited Company with 2 or more working directors then you MUST by law have this cover even if you are a husband and wife team under the Employers Liability (Compulsory Insurance) Act 1969. There is an exception to this legal requirement which is a Limited Company with only ONE working person who is a director and owns fifty per cent or more of the issued share capital, i.e. there are no other persons whatsoever doing any work in the company.

It is also usual for Employers Liability to be required if you have work experience students or volunteers assisting you even if there is no payment.

Don’t be fooled – you may only have a “friend” assist you, who is not getting any payment but if something happens to them, even if they don’t try and sue you, the HSE may take up the matter or indeed the Police may decide to prosecute for negligence. Remember, EL is dealt with under criminal law – the same as murder, assault and arson!

Could I be held responsible if someone injures themselves whilst following instructions from me?

Absolutely yes! The easy way to define the differences between EL and Public Liability (PL) would be to use the example of a wedding. If you gather the bride, groom and all the family together and ask them to step back and one of them falls off a ledge and injures themselves that would be a claim under Public Liability. If the same thing happened with a student that you were training or an assistant the cover would be under EL.

What is the definition of an employee?

This is the million pound question and where the regulations get confusing, for example, someone that assists you to whom you pay a “day rate” would be classified as an employee even though you are not responsible for their tax and national insurance contributions!

You are responsible for the health and safety of your employees while they are at work. Your employees may be injured at work, or they or your former employees may become ill as a result of their work while in your employment. They might try to claim compensation from you if they believe you are responsible. The Employers’ Liability (Compulsory Insurance) Act 1969 ensures that you have at least a minimum level of insurance cover against any such claims.
In general, you may need employers’ liability insurance for someone who works for you if:

You deduct national insurance and income tax from the money you pay them;
You have the right to control where and when they work and how they do it;
You supply most materials and equipment;
You have a right to any profit your workers make although you may choose to share this with them through commission, performance pay or shares in the company. Similarly, you will be responsible for any losses;
You require that person only to deliver the service and they cannot employ a substitute if they are unable to do the work;
They are treated in the same way as other employees, for example, if they do the same work under the same conditions as someone you employ.

In general, you may not need employers’ liability insurance for people who work with you if:

They do not work exclusively for you (for example, if they operate as an independent contractor);
They supply most of the equipment and materials they need to do the job;
They are clearly in business for personal benefit;
They can employ a substitute when they are unable to do the work themselves;
You do not deduct income tax or national insurance. However, even if someone is self-employed for tax purposes they may be classed as an employee for other reasons and you may still need employers’ liability insurance to cover them.

These are only guidelines – you have to decide yourself if your situation would fall into either of these categories although my advice would always be err on the side of caution if in doubt!

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