The Gazette 1986

GAZETTE

sepTemBER 1986

In the main, civil actions for compensation for an injury at work are settled outside the court: this is the case in 90% to 95% of all claims. 14 A spokesperson for the insurance industry claims the reason for this is the uncertainty and the sheer cost of such court procedures. Awards which insurers consider to be completely out of proportion to the injuries are frequently made hence insurers decide to cut their potential losses and settle out of court. 13 The money paid out in claims naturally governs the premium — business organisations are continually being told that as their claims have gone up so their premiums must increase accordingly. It has been stated that "more cases will have to be fought — it is really a question of the long-term view vis-a-vis the short-term advantage. If a certain number of cases were fought then it would have a knock-on effect. Few relish the ordeal of being cross-examined in the witness box and a frequent remark by plaintiffs after a two or three day hearing in court is "had I know what I was letting myself in for I would have settled years ago". The knowledge that an accident and claim does not automa- tically lead to an insurance company running around with a cheque book would be of benefit to all, and in this matter the insurance companies have been their own worst enemy, as they now realise." 16 There is little doubt that one successful claim against a company spawns a number of similar ones. To quote from the Barrington report: ". . . we detected some uneasiness about present arrangements which (as one employer put it) provide opportunity for employers (sic) and workers 'to milk the system'. This was an expression of a vague, but nevertheless, real concern that if people in large numbers do not exactly put their hands under the chopper, one might well believe it to be possible. Allied to this were concerns about malingering, compensation neurosis and just plain fiddling." 17 An example of the uneasiness mentioned above could be taken from Mr. Larry Goodman's experience. When the level of industrial injuries claims at his factory just outside Dundalk reached epidemic proportions his insurance bill soared to £750,000. His suspicions about the reasons for this were heightened when it transpired that the eighty claims of one thousand pounds each for fingers cut open by butchers' knives compared with just two similar claims in two comparable factories elsewhere in his empire. When the Unions protested that the plant was unsafe, he threatened to close it if the level of claims was not dramatically reduced. Overnight the factory suddenly became a less hazardous place for butchers' fingers. 18 No fault liability The latest recommendations in relation to employer liability comes from the Oireachtas Committee on Small Business. The Committee has recently recommended taking occupational injury claims out of the jurisdiction of the Courts and placing such claims in the hands of a tribunal to assess claims on a no-fault liability basis. 19 The Barrington Commission, made up of represen- tatives of Industry, Trade Unions and Central and Local Government, had this to say in 1983: -"Although the concept of a no-fault system has

some merits in that it permits to some or more degree and open appraisal of accident causation, we find it difficult to come to a reasoned conclusion on whether such a fundamental change in the present system would be justified on that basis alone. We feel that many aspects would have to be weighed in the balance, notably issues of the equity and effectiveness of the compensation system. As regards prevention, in our discussions with various experts, we hear many say that a no-fault system could be counter-productive. They would argue that automatic compensation was incompatible with prevention, that it restricts rather than increases the likelihood of care being taken and this removes an element of responsi- bility." 20 The conclusion surely is that it is up to Irish Industry to take the initiative towards solving the problems connected with Employers' Liability Insurance and claims. Suggestions towards this end are given hereunder. These might be used in combination or singly depending on the problem being experienced by the individual company. One suggestion not included in the list is that a company forego insuring. Employers' Liability Insurance not compulsory Employers' Liability Insurance is not compulsory in Ireland. As an alternative to having insurance an employer could give a guarantee that he would handle all claims himself. However, with some awards reaching in excess of half a million pounds few companies are capable of carrying the risk. "There have been cases where, because the employer was uninsured, the Plaintiff, in pursuance of his claim ran the risk of jeopardising fellow workers by going against the assets of the company. This of course creates a particular problem which Trade Unions, acting on behalf of an injured member have encountered." 21 For this reason a partnership of industry and unions should be considered to jointly attack the problem. How Industry can solve the Liability Insurance problem 1. Establish an Insurance Consumer Organisation — Businesses are consumers too. 2. Establish a National Insurance Industry — funded re-insurance programme. 3. Establish Group Insurance Schemes, or "Insurance Pools" to negotiate better rates. 4. Any changes in the legal system must be followed by a reduction of rates by the Insurance Industry. 5. Rates based on experience of claims record, rather than category. 6. Risk management. 7. Calamity Cover — company carries risk up to a certain threshold. 8. Prevent insurers from acting in concert to raise premium rates. 9. In-house settlements in association with Legal Adviser, the claimant to have a solicitor of his choice. • CONCLUSION Industry must take the Initiative

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