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The Government and the reviews it has commissioned by Lord Young and Professor Lofstedt may have made a link between occupational health and safety and a possible compensation culture, but, in reality, most of the claims insurers handle relate to the public, not workers.
This was one of the key points stressed by Philip Grace, of the Association of British Insurers (ABI), who took part in a panel discussion on what can be done to address the UK’s ‘compensation culture’, hosted at the Access Industry Forum Knowledge Forum.
Asked whether insurers were placing unnecessary burdens and expectations on employers to meet high standards of health and safety, Philip underlined that employers’ liability insurance is designed to pay compensation to workplace injury victims, and not to improve health and safety. If insurers focus on the latter and penalise businesses unfairly by stipulating that they meet ‘over-the-top’ health and safety standards then they will simply look for another provider, he explained.
Most claims, he added, come from slips and trips incidents but tend to be members of the public. They are very low in value, and the cost of handling them is such that it is much easier to pay a claimant and settle a claim quickly out of court than defend it. “It does seem inequitable [in comparison to some serious workplace injury cases, which can run on for several years] but that is how the system works and I don’t see an easy solution,” he said.
Illustrating Philip’s point, sitting alongside him on the panel was Jason Anker, a victim who suffered a workplace fall and who is now in a wheelchair. Jason described how he had to wait 14 years for his compensation claim to conclude, owing, in part to the complexity of the number of parties involved and the fact that some of those parties did not hold EL insurance. He admits that the accident was his fault, to an extent, which led on to a discussion of whether, in such cases, he genuinely deserved compensation.
In response, Philip explained that everyone has the right to claim and if the individual is partly blame, the level of damages is reduced by about half, or a third, via a process called contributory negligence. However, he also stressed that in almost all cases, the employer has failed in some way, and those failings will have generally contributed to the incident and the victim’s injuries.
Describing how damages are calculated in these cases is largely based on loss of earnings, Philip continued to explain. “The calculation is designed to put the victim back in the position [financially] that he would have been before the accident.” Various costs are factored in to arrive at the final figure, including things like the cost and maintenance of a wheelchair, or an adapted car, for example,
Asked how the ‘compensation culture’, whether driven by workplace incidents or public incidents, can be eradicated, Peter Bond, the third member of the panel and a representative of the Edge Protection Federation, suggested that there should be “some constraints on lawyers and limitations on how far you can push someone to submit a claim.” In particular, he proposed that sending unsolicited texts to members of the public encouraging them to submit a claim should be outlawed.
Philip agreed on this point, but went on to tell the audience that the insurance industry has agreed, as part of a summit meeting with the prime minister earlier this year, to insert some further guidance in insurance policy documents on those issues that can cause small businesses problems. Issues such as PAT electrical equipment tests, lone working and student placements, as well as working at height, have been identified.