NOHSAC : Occupational Safety and Health in Five Countries : Tech Report 8

2.2.7 Research institutions

2.2.8.1 State benefits | 2.2.8.2 Employers’ liability insurance | 2.2.8.3 Litigation

The HSE conducts research in the Health and Safety Laboratory (HSL) and commissions a diverse range of external research projects. The current HSE Research Projects Directory lists details of 1,460 research projects.⁵⁷ The EASHW provides an electronic portal to research conducted in member states throughout the EU.

The HSL is an agency of the HSE that has been functioning for over 30 years. The HSL describes itself as the UK’s leading industrial health and safety facility with experience across all sectors.⁵⁸ Its mission is “to protect people’s health and safety by ensuring risks in the changing workplace are properly controlled”. As well as delivering a comprehensive service to the HSE, it provides skills and expertise to other public sector organisations and the private sector. The scope of the HSL’s work requires a diversity of talents, and it employs over 350 people including scientists, engineers, psychologists, social scientists, health professionals and technical specialists. The main laboratory is located in Buxton, but there are also a number of field stations. The HSL’s capabilities encompass a wide range of topics including fire; explosion and process safety; human factors and risk assessment; occupational and environmental health; safety engineering; work environment; and specialist photographic and technical services. Services include research and development, specialist advice and consultancy, forensic investigation into the causes of accidents, environmental and biological monitoring, assessment of levels of risk and investigation of their control, establishing realistic requirements for standards and processes for meeting those standards, and validation and certification.

2.2.8 Compensation

There are currently two systems of workplace compensation in the UK.⁵⁹ One is the social security benefit system administered by the DWP, for example, the IIDB, and the second is the employers’ liability (EL) insurance. State benefits such as the IIDB do not involve fault being established. By contrast, employers’ liability insurance requires the courts to establish the negligence of an employer. This is often done through actual or threatened litigation.

2.2.8.1 State benefits

Any employee who is injured or made ill at work is entitled to claim benefits under the social security system as well as receive treatment from the NHS. The Social Security Act 1975 provides entitlement “in respect of any day during the injury benefit period on which<0x2026> he is incapable of work”.

People who become sick while they are working for an employer and earning enough to be relevant for national insurance (NI) purposes (this is lower than the amount when they have to start paying NI contributions) are entitled to statutory sick pay. This is paid out via the employer. People who are not working when they become sick, or are self-employed, or who have been sick for more than 28 weeks may be entitled to the Incapacity Benefit (IB).

The Industrial Injuries Scheme provides preferential social security benefits for disablements caused by an accident or a prescribed occupational disease arising out of or in the course of employment. It is not necessary to have paid NI contributions to be eligible for these benefits. Benefit is paid irrespective of fault.

The IIDB is for people who have suffered an accident at work or contracted a disease because of their job. The DWP administers it. Related benefits that may also be paid include the Constant Attendance Allowance, Exceptionally Severe Disablement Allowance, Reduced Earnings Allowance and Retirement Allowance. According to the DWP, “Industrial Injuries Disablement Benefit is a payment for people who are ill or disabled as a result of an accident, disease or event that happened at work – or in connection with work. We use accident to mean any incident or series of incidents at work which were not deliberate and which resulted in personal injury”.⁶⁰

People who lodge an injury claim through litigation may have to resort to claiming social security benefits while it is going through the process toward settlement. Should the claim be successful, the claimant will be obliged to repay benefits and possibly some other costs out of the settlement.

2.2.8.2 Employers’ liability insurance

All employers are required by law (Employers’ Liability (Compulsory Insurance) Act 1969)⁷ to take out compulsory insurance against their civil liabilities,⁶¹ unless they are exempt from the Act. The following employers are exempt:

Most public organisations including government departments and agencies, local authorities, police authorities and nationalised industries.

Health service bodies including NHS trusts, health authorities, primary care trusts nd Scottish Health Boards.

Some other organisations that are financed through public funds, such as passenger transport executives and magistrates’ courts committees.

Family businesses, i.e. if the employees are closely related to the employer (as husband, wife, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister). However, this exemption does not apply to family businesses that are incorporated as limited companies.

Companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company.

Employers’ liability insurance enables an employer to meet the cost of compensation for employees’ injuries or illnesses whether they are caused on or off site. However, any injuries or illnesses relating to motor accidents that occur while employees are working are usually covered separately by motor insurance. If an employer has any employees who are normally based in England, Scotland or Wales (including offshore installations or associated structures), they must have employers’ liability insurance. An employer does not need employers’ liability insurance under English law to cover any employees who are based abroad (e.g. if they are on secondment). Public liability insurance is different. It covers employers for claims made against them by members of the public or other businesses, but not for claims by employees. Public liability insurance is generally voluntary, but employers’ liability insurance is compulsory. An employer can be fined if they do not hold a current employers’ liability insurance policy that complies with the law.

An insurer cannot refuse to pay compensation purely because the employer:

has not provided reasonable protection for their employees against injury or disease
cannot provide certain information to the insurer
has done something the insurer told them not to do
has not done something the insurer told them to do (for example, to report the incident)
has not met any legal requirement connected with the protection of their employees.

However, this does not mean employers can forget about their legal responsibilities to protect the health and safety of employees. Employers are legally obliged to conduct risk assessments, to take practical measures to protect employees, and to report incidents. If an insurer believes that an employer has failed to meet their legal responsibilities for the health and safety of employees and that this has led to a claim, the policy may enable the insurer to sue the employer to reclaim the cost of the compensation.

The total value of this insurance must be a minimum of £5 million ($NZ14.3 million). It can be made up from more than one policy. If the business is part of a group, a policy for employers’ liability insurance can be taken out for the group as a whole. In this case, the group as a whole, including subsidiary companies, must have cover of at least £5 million. The £5 million minimum level of cover includes costs, so most employers choose to purchase a higher level of cover. It seems that the most common current employers’ liability insurance policy is for £10 million ($NZ28.6 million). Insurance is provided by private insurance companies that might also provide some preventive services, especially if they consider the work setting to be high risk.

2.2.8.3 Litigation

Employees in the UK who are injured or made ill at work are entitled to sue their employers for compensation in the civil courts. The UK is acknowledged to be a highly litigious society nowadays.

In general terms, industrial disease claims for compensation must usually have been settled or legal proceedings must have been issued in a court of law within three years of knowledge of a significant injury. This is because of the provisions of the Limitation Act 1980. This states that:

the limitation period is three years, which runs from the date the injury occurred or from the date the person injured had knowledge of the injury
the limitation period does not start running until a claimant reaches the age of 18 years
the limitation period does not run against those who are mentally incapacitated.

In most cases, the time will start running on the day the injury occurs, as in a road traffic accident, however occupational illness is different,as the injury occurs over a long period of time and the symptoms may not become obvious until decades after exposure to the problem. In these cases, the three-year period starts to run from the time when the potential claimant knew or ought to have known of the existence of a problem. In practice, the courts rarely exercise discretion to vary the time limits.

The UK litigation market has become notable for the presence of US-style “ambulance-chaser” legal firms, especially those who operate on a “no win, no fee” basis. The legal firm attempts to extract maximum costs within a settlement, either at court or in out-of-court agreement. In this way, they can legitimately advertise that the claimant will receive “100% of the compensation”. An example of this is, “If we deal with your claim on a ‘no win, no fee’ basis and you win, we are usually able to recover any legal costs, including medical report fees and so on, in addition to your compensation. You will therefore have nothing to pay. If you lose, you will not have anything to pay”.⁶²