Liz Booth examines recent court rulings on workplace claims and their impact on the sector
A series of recent court rulings could well change the landscape for workplace claims, with varying consequences for the insurance market.
Most recently, and most publicly, the UK High Court found a classical musician is entitled to damages after suffering ‘acoustic shock’ while employed in the orchestra at the Royal Opera House.
As Toby Scott, a partner at Clyde & Co, reports: “The judgment represents a landmark decision for this newly recognised species of noise-induced hearing loss in the UK, which could have wide-ranging ramifications for insurers and risk managers at entertainment venues and beyond.
He suggests Goldscheider is now likely to become the precedent that will allow claimant firms to begin banging the drum and actively advancing claims of this nature. Indeed, he said: “Many such firms have already begun marketing these claims in anticipation of the judgment.”
While the case suggested that the concept of acoustic shock is “relatively new”, there have been reports internationally of settlement of employee claims at call centres going as far back as 2001, including in the US and Australia. These individuals, who work with headphones and headsets, are considered particularly at risk from acoustic shock; this was explicitly referred to within the judgment.
There is a real risk of a floodgates argument occurring on the back of the decision, potentially in the most unlikely of places, warns Mr Scott.
“European studies recently found there can be similar exposures to sudden loud noise in a classroom context, raising occupational and safeguarding issues. Is it unreasonable to suggest that a claim could be brought as a result of someone shouting within an office setting?” he asks.
Employers have previously concentrated on protecting employees from long-term exposure to noise, given the known risk of noise-induced hearing loss. However, they now also have a duty to assess and mitigate risks arising from single exposures that could result in foreseeable injury to employees.
HEALTH AND SAFETY AT WORK 2017
- 1.3 million working people suffering from a work-related illness2,542 mesothelioma deaths due to past asbestos exposures (2015)
- 137 workers killed at work
- 609,000 injuries occurred at work, according to the Labour Force Survey
- 70,116 injuries to employees reported under RIDDOR
- 31.2 million working days lost due to work-related illness and workplace injury
- £14.9 billion estimated cost of injuries and ill health from current working conditions (2015/16)
Source: Health and Safety Executive (HSE)
ACTIONABLE PERSONAL INJURY
Meanwhile, David Wynn, also a partner at Clyde, warns: “The UK Supreme Court has broadened the scope of actionable personal injury, raising important implications going forward for employers and insurers.”
This follows a case involving platinum salts, and the decision will result in a renewed emphasis on ensuring that adequate workplace protections are in place for employees who may encounter potential allergens, says Mr Wynn.
“If an employee develops an asymptomatic condition as a result of employer negligence, it is no longer sufficient to simply move the employee to other duties to prevent the asymptomatic condition becoming symptomatic.
“This is a landmark decision in respect of what constitutes an actionable injury”, adds Mr Wynn.
He warns that the judgment may also prompt additional claims for minimal and imperceptible injuries, with the argument likely to be advanced that the physiological change has left a claimant worse off in some measure.
This could be particularly relevant to noise-induced hearing loss claims, where any de minimis yet measurable hearing loss or damage to the cilia in the inner ear could now be argued as precipitating deafness in a claimant, allowing this loss to be claimed for.
It is now clear that should an employer’s negligence result in a physiological change to an employee, then the employee may be entitled to claim compensation for any financial losses resulting, even in the event that the physiological change is asymptomatic.
ACCORDING TO THE HSE
Stress, depression or anxiety and musculoskeletal disorders accounted for the majority of days lost due to work-related ill health – 12.5 million and 8.9 million respectively. On average, each person suffering took about 17 days off work. This varies as follows:
- 9.1 days for injuries
- 19.8 days for ill health cases
- 23.8 days for stress, depression or anxiety
- 17.6 days for musculoskeletal disorders
Employers’ liability insurance covers:
- Full-time and part-time employees
- Self-employed contractors
- Temporary staff, apprentices and volunteers
- People taking part in work experience or training schemes
- Public liability insurance
- Professional indemnity insurance
- Own plant, tools and equipment for tradesmen
- Business equipment for professionals
- Personal accident – covers your income if you or a key partner is injured
The average workplace injury payout on behalf of a small business by AXA in 2013 was £14,300. Employers also risk being fined up to £2,500 for every day that they do not have insurance.
Source: AXA Insurance
These cases are by no means unique. David Williams at DAC Beachcroft points to another two examples where employers and their insurers might be looking at a new landscape.
At the end of last year, the Court of Appeal ruled in Stewart v Lewisham and Greenwich NHS Trust, in a judgement he believes should still be of assistance when considering manual handling cases and also other employers’ liability cases when risk assessments are an issue in post-Enterprise and Regulatory Reform Act claims presented in negligence.
“If lifting an item or some other activity does not present a real risk of injury, the absence of a risk assessment should not enable a claim to succeed,” he concludes.
Another area where claims have sprung up slightly unexpectedly and caused concern around claim fraud has been among beauticians, spas and leisure centres.
Mr Williams says: “In recent months, we have noted a significant increase in claims presented in the fitness, leisure and beauty industry, with many claims being presented against pop-up beauty therapy parlours, which presents challenges in obtaining evidence from businesses that have ceased trading.
The scrutiny of treatment records, obtaining of evidence from the treating beauticians and searches of social media often provide evidence through which the claims can be repudiated, however, and the passage of time and closure of the beauty parlours does not necessarily prevent the defence of the claim.
FABRICATED OR EXAGGERATED CLAIMS
“Alongside the spike in public liability claims against beauticians, spas and leisure centres, we have noted a recent increase in the proportion of claims presented by carers,”
Mr Williams adds, “which are either fabricated or exaggerated.”
He continues: “Many claims by carers relate to accidents or alleged attacks in the home of service users or rooms of care home residents, accidents which are not witnessed or are witnessed by individuals whose age or medical condition prevents their giving evidence in relation to the claim.
“Claims for manual handling and for slips and trips are frequent, often giving rise to allegations of acceleration injuries, which are based to a significant extent on the history given by the claimant. The nature of these claims leaves them open to exaggeration and the nature of the work enables the presentation of fabricated incidents.”
These few examples provide a snapshot of the range and breadth of claims in the employer liability arena and the increasing challenges for those who provide such insurance.
A report from the recent WEF annual meeting in Davos, where improving global growth was earmarked as offering a chance to tackle a range of modern risks.
Sam Barrett looks at how and why a growing number of insurers are turning to behavioural economics to improve customer relations and drive sales.
With a large percentage of customers wanting to pay for their insurance premiums in monthly instalments, it is no wonder premium finance has become such a large industry, as The Journal discovers