Why can’t I defend claims? Claims and risk man-agement guide

“How are we paying this one?! We have the risk assessment, they have been trained and it looks like they weren’t even wearing the PPE we gave them?!”

It’s been five years since I stopped being a claimant solicitor (you can boo now) and joined Marsh’s Defensibility & Regulatory team and this is the single greatest frustration I hear from our clients.

Hopefully this article will shed light on some of the reasons why you might be struggling to defend claims:

1. Documentation

When stress testing our client’s ability to defend claims, our Defensibility Reviews always start from the ground up. This means starting with the basic policies and procedures that are legally required to keep employees, members of the public and other third parties safe.

These documents are familiar to everyone and will include (amongst others) your:

• H&S Policy
• Risk Assessments
• Safe Systems of Works (or method statements)
• Incident Investigations
• Procurement and contractor management policy
• Cleaning and inspection regimes

Whilst we often think of these documents as ‘basic’, the team and I often find that the following key weaknesses hamstring a defence:

• Non-existent: From our experience this is relatively rare but we still come across clients who do not always have the ‘basic’ documents they need to defend claims. Although this is no longer a ‘slam-dunk’ for the Claimant (thanks to s. 69 of the Enterprise and Regulatory Reform Act 1969) it is unlikely that an insurer is going to support a defence without these basic documents.
• Generic: When risk assessments or other documents are not specific to the risk it is only too easy for the Claimant to paint the organisation as taking a tick-box approach to Health and Safety (H&S). Make sure that your documents are specific to your site and/or the individual.
• Not suitable: Inadequate documents that were ill-conceived from the start are a key reason why claims are settled. It is important that crucial documents, such as risk assessments, are created with the involvement not just of H&S but also with the workers who will be expected to abide by them. If you’re still unsure, Marsh has some excellent H&S consultants who can provide effective risk management support.
• Not retained: A potential claimant has three years from the date of knowledge of their injury¹ to bring a claim. For disease claims, this could be the date of diagnosis 60 years later. It is therefore essential to retain key documentation. Remember if you can’t evidence it then the court is unlikely to accept it existed.
• Enforcement: You have effective risk management controls but can you prove that you enforce them? Many Claimants will argue that the unsafe practice that led to their injury was effectively condoned as they ‘always did it like that and no one said anything’. If you are having safety conversations with people to ensure they comply with your safety controls, you need to be recording these. It could be a simple spreadsheet or email but this is evidence is crucial it demonstrating that you stand behind your policies and procedures. In the event of an accident or incident you should also consider disciplining the individual, even if they were the injured party.

2. Training

Put simply you need to demonstrate you have trained your people so that they can work safely. If you can’t prove this you will almost certainly fail. Good training must demonstrate three things to count as good evidence:

a. Content: Can you evidence the content of the training and show that it was adequate for the task at hand?

b. Attendance: Can you show that people attended? This could be through the delivery of an online course or the good old-fashioned name and signature.

c. Understanding: The hardest of the three. Claimants often argue that whilst they attended the training it was a ‘tick-box’ exercise and they didn’t really understand what they were told. However, a simple set of questions at the end of a training session is enough to put that argument to bed. This is not suitable for all training, much of which is on-the-job. For this type of training it is important to document, on a regular basis, how the inexperienced colleague is progressing and the process by which they are deemed competent.

3. Poor Incident Investigations

If you have all of the above you may be feeling pretty comfortable. However, many clients fail to defend because their incident reports and investigations undermine their defence by:

• Not recording the incident objectively and therefore admitting the facts. ‘Joe Blog has hurt his back whilst carrying a load’ rather than ‘Joe Blog says that he was carrying a crate when he felt a pain in his back.’
• Not identifying a broad enough group of witnesses. Remember witnesses are not just those who saw an incident but anyone who can provide relevant information.
• Poor witness statements. Statements written by the individual, rather than through a formal interview process, that seeks to questions and probe further, are often of minimal assistance to a defence.
• Lack of objective evidence. People might take 20 pictures of their lunch for Instagram but we often find that client investigations lack any photographs at all. CCTV is also fantastic evidence but is sometimes not reviewed or retained.
• Root cause analysis that damns the organisation.
• Actions that simply record ‘review the risk assessment’ or ‘retrain staff’. Without context these statements can be used by the Claimant to argue that risk controls and/or training was not suitable or sufficient at the time of the incident.

Our Incident Investigation Analysis reports and associated training can help your teams to improve the quality of their investigations and your chance at defending claims.

Regulatory Defence

Hopefully, reflecting on the above gives you some understanding of why defending claims is often difficult and what you could be doing to improve your chances. If you’re new to claims, our Claims Consulting Practice has some fantastic introductory training to take you through the basics of the claims management process.

However, a greater threat to your organisation may not be the individual claimant but rather a prosecution and associated fines.

The fines now available to the Health and Safety Executive (HSE) are in the multi-millions. Thanks to s.37 of the Health and Safety at Work Act, any senior leader ‘with a controlling mind’ in the business is liable for personal fines and a potential custodial sentence of up to 2 years. Personal prosecutions are on the rise and now make up 20% of all prosecutions brought by the HSE.

It should be noted that these fines are uninsurable. Along with the reputational damage, they will have a serious impact on you and your organisation.

Our Mock Trials and Regulatory Reviews can help you understand the potential risks to your business and individuals. They will also allow you to identify existing gaps and consider strategies to avoid and/or mitigate prosecutions. By developing strategies for effective claims and risk management, you can improve claim outcomes and enhance customer satisfaction while managing risk effectively.

In the context of private equity and business interruption, understanding the total cost of claims and the claims process is crucial for insurance brokers and organisations alike. Additionally, leveraging risk management services and focusing on risk identification within your own systems can further strengthen your defence against claims.

Sources

1. For those under 18 they have 3 years from the date they turn 18.