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November 2008 Qbe Issues Forum

November 2008 Qbe Issues Forum



"From a legal point of view 2008 has ...

"From a legal point of view 2008 has
been a very “interesting” year for UK
businesses and their insurers, and
whilst new challenges have
undoubtedly arisen, there were
some notable developments. Summary of these developments by QBE - the leading global insurer



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    November 2008 Qbe Issues Forum November 2008 Qbe Issues Forum Document Transcript

    • INTRODUCTION EMPLOYERS DRIVEN INTO ACTION “It has been estimated that up to a third of all road traffic accidents involve somebody who is at work at the time. This may account for over 20 fatalities and 250 serious injuries every week. Some employers believe, incorrectly, that provided they comply with certain road traffic law requirements... that is enough to ensure the safety of their employees, and others, when they are on the road. However, health and safety law applies to on-the-road work activities as to all work activities and the risks should be effectively managed within a health and safety management system”. Opening statement from HSE Guidance INDG382 Driving for Work. Driving is an essential part of the operations of virtually every organisation in the UK today. With growing volumes of traffic on our roads, driving is statistically the most hazardous activity undertaken by most organisations’ employees, and hence the number one workplace-fatality risk. In this Issues Forum, we review legal and regulatory developments affecting occupational road risk, for example recent relevant case law and corporate manslaughter legislation. In examining the business case for a risk-based management approach to this increasingly important issue, we highlight some of the key hazards, risks, and control methodologies employers should consider. 2 EMPLOYERS DRIVEN INTO ACTION NOVEMBER 2008
    • ARE EMPLOYERS TAKING A BACK SEAT? Until very recently health and safety professionals have often neglected the risk of road traffic accidents (RTAs) involving ‘at work’ employees, seeing it as an issue for fleet managers. Such attitudes are reflected in the absence of specific health and safety legislation and the limited scope of enforcement action taken against employers. Because the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 1995 does not specifically apply to most types of work- A CHANGE OF DIRECTION he had fallen asleep whilst driving as related RTAs, they tend to be statistically a result of working unreasonable hours under-recorded. Few organisations The tide has recently begun to turn, and with insufficient rest, in breach of the document and monitor them like other we are now seeing a growing debate Working Time Regulations 1998. His workplace accidents, and they rarely over the issue of employers’ responsibility case initially failed when the High Court appear among risk management or for work-related RTAs. Two high-profile found that the accident was more likely health and safety key performance court cases have helped to focus minds on the issue of driver fatigue: to have resulted from the use of a mobile indicators (KPIs). phone. However the Court of Appeal The Health and Safety Executive (HSE) R v Roy Bowles Transport subsequently held that on the balance of and the Department for Transport (DfT) (1999) probabilities the claimant had indeed fallen published guidance on managing asleep at the wheel. His damages were Two directors were convicted of occupational road risk in 2003. Despite reduced by a third in recognition of his manslaughter after an employee fell significant lobbying from road safety failure to wear a seatbelt or to realise that asleep whilst driving a lorry on the M25, groups, however, the HSE has not since he was tired and at risk of falling asleep. causing a multi-vehicle collision in which pursued the issue with any great vigour. two people died. The driver was jailed for The inference is that employers may Consequently, other than where large two and a half years for the offence of be considered negligent in respect of vehicles have been involved, neither causing death by dangerous driving employees falling asleep at the wheel employers nor the enforcing authorities under the Road Traffic Act. Both directors where they have failed to carry out a have been strongly motivated to look were given suspended sentences when risk assessment, to put appropriate into whether health and safety the court found they had knowingly systems in place (e.g. for switching management failures may have allowed drivers to work long hours. drivers), and to ensure such provisions contributed to ‘at work’ RTAs. Michael Eyres v Atkinsons are put into practice. It is perhaps not altogether surprising, Kitchens Ltd (2007) These decisions have far-reaching then, that few organisations consider The claimant in this case lost control implications for both civil and criminal work-related road safety a priority. of his van and sustained serious spinal law. They are likely to be followed in injuries that left him tetraplegic. His cases where employees are seen to managing director was asleep in the be working long hours leading to a passenger seat at the time of the foreseeably increased risk of injury, accident. The claimant contended that whether at the wheel or otherwise.
    • The courts will, of course, consider relevant legislation and guidance in determining whether an organisation has fulfilled its duty of care to the standards that could reasonably be expected in the circumstances. The HSE and DfT have both emphasised that health and safety laws apply to on-the-road work activities. Employers must take steps to assess the associated risks, use all reasonably practicable measures to make journeys safe, and ensure their employees are fit and competent to drive safely and that their vehicles are fit for purpose and maintained in a safe condition. THE BUSINESS CASE The benefits of properly managing an organisation’s vehicles and drivers CORPORATE can be considerable, extending well MANSLAUGHTER AND beyond the health and safety and social CORPORATE HOMICIDE consequences of serious road accidents. From a commercial perspective, better The Corporate Manslaughter and control over fleets and drivers often results Corporate Homicide Act 2007, which in improvements in wear and tear, fuel came into force from April 2008, aims to consumption, insurance premiums, legal hold companies and managers to proper fees and claims costs, to name but a few. account by making it easier to prosecute when their gross negligence leads to DRIVING COMMITMENT death. The new offence of Corporate QBE encourages and supports Manslaughter (Corporate Homicide in organisations who develop their own Scotland) is targeted at collective bespoke business case arguments for corporate responsibility and does not action, i.e. moral, legal and financial. apply to individuals. However, the Addressing the challenge of options of prosecuting individuals for occupational road risk requires manslaughter or under existing health commitment from the top down and and safety legislation remain, and may clearly defined responsibilities. Also indeed, be more widely used in the future. essential is an integrated organisational It seems clear that we will see a greater support structure and management incidence of health and safety and both system that allows cooperation across individual and corporate manslaughter all departments with some responsibility prosecutions in relation to work-related for work-related road safety. In other road deaths in future. Where a gross words, functions such as risk breach of duty of care is held to have management, fleet, insurance, training, occurred, organisations and/or their and health and safety must operate senior managers are now likely to be outside their traditional silos to pursue a found guilty. joined-up strategy. 4 EMPLOYERS DRIVEN INTO ACTION NOVEMBER 2008
    • A RISK MANAGEMENT functions, e.g. reducing the frequency The process is essentially no different APPROACH and cost of accidents and claims, from that relating to any other work making fuel and vehicle efficiency activity, as shown below: A one-size-fits-all approach will clearly savings, improving absence and not work when it comes to managing attendance levels, or even reducing occupational road risk. The first step the organisation’s carbon footprint! Identify significant is to set company policy and formulate hazards and those who The next step is to identify each point a risk management strategy that defines at which the organisation’s operations may be at risk roles, responsibilities and timelines for create an exposure to occupational action. This strategy should incorporate road risk. Having done this, it becomes the aims and objectives of the policy possible to consider, at a very strategic or mission statement and include level, the risk-based arguments for realistic and measurable KPIs. These eliminating, substituting, reducing need not necessarily all be safety related, or controlling these exposures. The Assess the likelihood and but could include aspirations of residual risks should then be assessed potential severity of injury stakeholders within other business and documented. and loss Determine and implement control measures to reduce risks as far as reasonably practicable and economically viable Monitor and review the effectiveness of policies, systems and controls at appropriate intervals With the ever-growing potential for civil claims and criminal enforcement, employers and senior managers need to demonstrate that the systems they have in place are effectively managed, enforced, in line with best practice, and commensurate with the level of risk.
    • IDENTIFICATION OF EVALUATING RISK HAZARD AND RISK Once higher order controls have been exhausted, there are three main areas The need for driving at work can arise in to consider in evaluating residual work-related road risks: a number of different ways: from one or two employees using their own cars on ad-hoc company business, to major The The The logistics firms operating huge fleets. Employees particularly at risk include Driver Vehicle Journey young and newly qualified drivers, drivers of large or specialist vehicles, those driving long distances, and those with The driver of them and have the necessary complex or difficult routes. skills and expertise to meet these Common sense has a major role to play When an organisation is analysing expectations. Such records will become when evaluating drivers’ competence accident frequency and severity vitally important should future civil or and likely performance on the road. For and benchmarking against similar criminal proceedings involve allegations example, all motor insurance proposal organisations, fleet managers, motor of insufficient training or enforcement. forms ask: insurers and brokers can all provide Training requirements vary widely, • Does the driver hold a valid licence for valuable data. Identifying systemic and the relevant class of vehicle? and off-the-shelf training packages are root-cause failings from accident and unlikely to provide a complete solution. claims investigations is also important. • What driving experience do they have? Employers with a significant driver Insurers and brokers of larger fleets population should consider creating • Do they have any history of speeding will often be willing to facilitate such training matrices detailing the specific or other traffic law infringements? claims reviews. requirements that apply to their drivers • What is their historical accident and vehicles. A bespoke training Although not specifically required by experience? programme can then be developed – RIDDOR, recording and monitoring vehicle accident and near miss either in house or working with a suitable The answers to these questions will frequency can also help to highlight specialist provider. help determine what level of risk a trends and hot spots, e.g. vulnerable driver poses. Though specialist risk For most organisations, however, some or accident-prone drivers, accident black assessment software is available, an basic induction training covering the law, spots, and susceptible vehicle types. organisation must ultimately rely on routine safety checks, maintenance Consulting with drivers themselves its own judgement as to whether a arrangements, emergency procedures captures their first-hand practical particular driver is low or high risk. and the organisation’s driving safety rules experience and helps make them provides a useful starting point. Clearly, drivers should be made aware of more receptive to reporting adverse company policies and systems of work This could usefully be supplemented by occurrences and adopting future on road safety. Employers should be able a driver’s handbook outlining company changes in policies and procedures. to provide documentary evidence that policies and providing general advice It is also important to review any employees understand what is expected and information on road safety. case law and proposed legislation that may affect claims or criminal law enforcement, i.e. changes in the courts’ interpretation of the minimum standard of care required where work-related driving is concerned. 6 EMPLOYERS DRIVEN INTO ACTION NOVEMBER 2008
    • (including headlamp beam adjustment to compensate for different loads) and how to adjust head restraints to reduce the risk of whiplash. There should also be a robust reporting mechanism in place through which drivers can notify managers both of near misses and of any vehicles in a potentially unsafe condition. Employers must then close the loop by taking and documenting appropriate action. Satellite navigation systems equipped with helpful safety and warning features can also play a valuable role, particularly where routes are variable. Such equipment can, however, prove distracting The vehicle Employers often fail to give proper or lead to complacency – risks which also consideration to privately owned require consideration. Drivers should The Provision and Use of Work vehicles, but it is important to ensure always be trained in the safe use and Equipment Regulations 1998 (PUWER) that both driver and vehicle are insured the limitations of any such equipment. require employers to prevent or control for business use and that the latter has risks to their employees’ health and The journey a valid MOT certificate. safety from equipment – motor vehicles included – used at work. Lifting Route planning should form part of Policy documents and training should equipment is also subject to specific the risk assessment. Motorways, for cover general maintenance, servicing, requirements under the Lifting example, are statistically safer than and repair arrangements to at least with Operations and Lifting Equipment minor roads. Depending on vehicle type, the same standard as the Regulations 1998. planning should also take account of manufacturers’ instructions. Driver special hazards such as peak traffic The starting point here is to consider training should cover basic safety flows, bridges, narrow roads and driving whether vehicles are fit for the purpose checks – potentially supplemented by a in town. for which they are used. Fleet, system of pre-use checks and periodic purchasing, and health and safety ongoing checks. This might, for To reduce sleep-related accidents, work departments should all take account of example, cover tyres, lights, wiper schedules and shifts should be aligned as risk-based criteria when sourcing new or blades and safety equipment such as far as possible with natural sleep patterns. replacement vehicles. It may even prove seatbelts and head restraints. Drivers It is also important to encourage a culture cost-effective to lease or hire vehicles should also have access to information in which employees feel able to pull over with maintenance and repair outsourced on issues such as recommended tyre if necessary, regardless of delivery or to a vetted supplier. pressures, maximum load weights operational demands.
    • CONTROL MEASURES There are many ways of reducing occupational driving risk. A common mistake is to focus primarily on lower order controls affecting vehicle and driver safety. The first priority should be higher order controls, along the lines of the principles endorsed in Schedule 1 of the Management of Health and Safety at Work Regulations: • Consider outsourcing driving • Introduce either blanket or risk-based operations training whereby all drivers or, if budget constraints preclude this, all high-risk • Eliminate or minimise driving risk drivers (including those using private by encouraging telephony and videoconferencing vehicles driven on company business) undertake driver-training that is • Encourage safer forms of travel specifically tailored to the organisation’s such as air and rail and the individual’s vehicle use • Ensure company car policies do • Develop a drivers’ handbook to include not encourage employees to drive, company policies and systems of work, rather than seek safer alternative forms stressing adherence to the Highway of travel, or to select inappropriate Code, e.g. restrictions on mobile phone vehicles use, smoking in vehicles, drugs and • Ensure delivery targets and incentives alcohol testing policy, eyesight testing do not inadvertently encourage drivers requirements and any additional to drive too fast or for longer hours precautions or controls relevant to the than is reasonable specific nature of either the employee’s duties or the vehicle itself • Select vehicles preferably with a planned maintenance/service • Monitor, review and audit policies and programme in place procedures regularly, treating breaches and non-compliance as with other • Prioritise the purchase/use of vehicles safety rules, with offenders visibly with features designed to prevent subjected to established disciplinary accidents and to protect their procedures drivers, occupants and third parties • Consider the use of any relevant • Consider at pre-employment stage protective clothing or safety devices whether an individual’s safety record as the last line of defence makes them a suitable candidate As with any other major organisational • Apply similar standards to existing change initiative, effective drivers, i.e. invoking disciplinary communication and consultation are procedures where drivers are at fault vital. Senior and middle managers need to get out of their silos and deliver an effective message by engaging with the people whose participation is ultimately most critical: the drivers. 8 EMPLOYERS DRIVEN INTO ACTION NOVEMBER 2008
    • CONCLUSION Occupational road risk has traditionally passed under the radar for many organisations and not been seen as a major priority. However a combination of factors including recent developments in case law, the introduction of the Corporate Manslaughter Act supplementing other relevant legislation, and pressure from action groups has conspired to push the topic firmly up the agenda. Looking beyond the negative motivation provided by new legislative and enforcement measures, QBE would strongly encourage organisations to consider their own business case for action. Those who adopt a pro-active risk- SPOTLIGHT ON It is important to make employees based approach to managing the specific MOBILE PHONES aware of the risks of using mobile challenges of occupational road risk phones while driving and the criminal will benefit in a far broader sense than The use of handheld mobile phones liability this risks causing. Employers simply reducing the risk of prosecution. while driving, except in specified should adopt a clear policy on the emergencies, has been prohibited since use of mobile phones and look the Road Vehicles (Construction and carefully at their policy on the use Use) (Amendment) (No 4) Regulations of hands-free phones. 2003 came into force on 1 December 2003. The Road Safety Bill, given Royal Best practice is to prohibit the use of Assent on 8 November 2006, includes mobile phones and other distractions additional provisions covering the use while driving except in a ‘genuine’ of mobile phones and other distractions emergency. Any breaches should be affecting driver’s proper control of subject to disciplinary action. Employers their vehicles. This legislation affects should ensure, not only that company employers, making it an offence to policy is applied, but also that cause or permit employees to use employees are aware of both the handheld phones or other potentially individual and the wider consequences distracting devices at the wheel. of any failure to comply.
    • BEST PRACTICE RISK MANAGEMENT APPROACH: QBE & RISK MANAGEMENT Develop a bespoke business case for action QBE’s Risk Management teams are dedicated to providing our clients with pro-active risk management solutions and thus helping to reduce claims costs. We provide expert advice on accident- prevention measures and work with our Deliver a strong statement of policy, a strategy, and KPIs clients to analyse their claims trends to promote effective, innovative and from senior management affordable solutions based on best practice standards. QBE is a corporate partner of Brake, the UK’s leading road safety charity. We have strong associations with risk Introduce a process of consultation and engagement management providers in the motor fleet with the workforce arena, and provide benefits and best practice advice to our motor fleet clients via our own innovative Risk Management Essentials programme. QBE policyholders also benefit from the added value of a series of initiatives and Identify organisational driving operations and exposures resource tools designed to highlight and effectively manage road risk encountered by fleet policyholders. This covers road safety, accident management, vehicle recovery and active risk assessments. For more information, visit Adopt risk-based initiatives to eliminate, substitute, www.qbeeurope.com/motor/risk reduce or control exposure and www.qbeeurope.com/casualty/ risk-management Assess and evaluate residual risks and implement higher order controls Monitor, audit and review 10 EMPLOYERS DRIVEN INTO ACTION NOVEMBER 2008
    • FURTHER READING AUTHOR BIOGRAPHY DISCLAIMER As a starting point, QBE strongly Mark Black, Risk Manager This Forum has been produced by QBE recommends that employers consult Insurance (Europe) Limited (“QIEL”). QIEL is a Mark joined QBE in 1998, serving Driving at Work: Managing work-related company member of the QBE Insurance Group six years as a claims inspector before road safety, the guidance document joining the Risk Management team Readership of this Forum does not create an released by the HSE and the DfT in in 2004. He has 12 years’ insurance insurer-client, advisor-client, or other business or 2003. A raft of other information and industry experience working with a range legal relationship. guidance is available from organisations of major clients, and specialises in such as Brake, ROSPA, the Road This Forum provides information about the law to liability claims and risk management. Haulage Association and the Freight help you understand and manage risk within your Transport Association. Mark holds an honours degree in Risk organisation. Legal information is not the same Management and the Nebosh National as legal advice. This Forum does not purport to Useful links Diploma in Occupational Health and provide a definitive statement of the law and is • HSE: www.hse.gov.uk Safety. He is a Graduate Member of not intended to replace, nor may it be relied IOSH, a Member of the Institute of Risk upon as a substitute for specific legal or other • DfT: www.dft.gov.uk/drivingforwork Management and of the International professional advice. • Driver Standards Agency: Institute of Risk & Safety Management. QIEL has acted in good faith to provide an www.dsa.gov.uk accurate Forum. However, QIEL and the QBE • Driver & Vehicle Licensing Agency: Group do not make any warranties or www.dvla.gov.uk representations of any kind about the contents of this Forum, the accuracy or timeliness of its • Vehicle & Operator Licensing Agency: contents, or that the information or explanations www.vosa.gov.uk (if any) given. QIEL and the QBE Group do not • ROSPA: www.rospa.co.uk have any duty to you, whether in contract, tort, under statute or otherwise with respect to or in • Brake: www.brake.co.uk connection with this Forum or the information • Road Haulage Association: contained within it. www.rha.net QIEL and the QBE Group have no obligation to • Freight Transport Association: update this report or any information contained www.fta.co.uk within it. • Roadsafe: www.roadsafe.com To the fullest extent permitted by law, QIEL and the QBE Group disclaim any responsibility or liability for any loss or damage suffered or cost incurred by you or by any other person arising out of or in connection with your or any other person’s reliance on this Report or on the information contained within it and for any omissions or inaccuracies. QBE Insurance (Europe) Limited and QBE Underwriting Limited are authorised and regulated by the Financial Services Authority. QBE Management Services (UK) Limited and QBE Underwriting Services (UK) Limited are both Appointed Representatives of QBE Insurance (Europe) Limited and QBE Underwriting Limited.
    • QBE Plantation Place 30 Fenchurch Street London EC3M 3BD enquiries@uk.qbe.com tel +44 (0)20 7105 4000 fax +44 (0)20 7105 4019 www.QBEeurope.com
    • Dear reader Thank you for taking the trouble to read this publication. QBE Risk Management believe that best practice organisations are those where senior individuals facilitate and engage in the processes of sensible risk management. We make this document available to all interest parties in an effort to share knowledge and promote good practise. Our services are available only to clients insured by QBE in Europe. Our insurance products are sold through insurance brokers. We cannot offer advisory services to anyone else, however we would be delighted to hear if you have found this document useful or believe there are risk management issues that do not receive appropriate attention in the media. Regards QBE Risk Management Team email: RM@uk.qbe.com www.QBEeurope.com/RM Disclaimer This document has been produced by QBE Insurance (Europe) Limited (“QIEL”). QIEL is a company member of the QBE Insurance Group. Readership of this Forum does not create an insurer-client, advisor-client, or other business or legal relationship. This Forum provides information about the law to help you understand and manage risk within your organisation. Legal information is not the same as legal advice. This Forum does not purport to provide a definitive statement of the law and is not intended to replace, nor may it be relied upon as a substitute for specific legal or other professional advice. QIEL has acted in good faith to provide an accurate Forum. However, QIEL and the QBE Group do not make any warranties or representations of any kind about the contents of this Forum, the accuracy or timeliness of its contents, or the information or explanations (if any) given. QIEL and the QBE Group do not have any duty to you, whether in contract, tort, under statute or otherwise with respect to or in connection with this Forum or the information contained within it. QIEL and the QBE Group have no obligation to update this report or any information contained within it. To the fullest extent permitted by law, QIEL and the QBE Group disclaim any responsibility or liability for any loss or damage suffered or cost incurred by you or by any other person arising out of or in connection with your or any other person’s reliance on this Report or on the information contained within it and for any omissions or inaccuracies. QBE European Operations Plantation Place 30 Fenchurch Street London EC3M 3BD tel +44 (0)20 7105 4000 fax +44 (0)20 7105 4019 QBE European Operations is a trading name of QBE Insurance (Europe) Limited, no.01761561 ('QIEL'), QBE Underwriting Limited, no. 01035198 ('QUL'), QBE Management Services (UK) Limited, no. 03153567 ('QMSUK') and QBE Underwriting Services (UK) Limited, no. 02262145 ('QSUK'), whose registered offices are at Plantation Place, 30 Fenchurch Street, London, EC3M 3BD. All four companies are incorporated in England and Wales. QIEL and QUL are authorised and regulated by the Financial Services Authority. QUL is a Lloyd's managing agent. QMSUK and QSUK are both Appointed Representatives of QIEL and QUL.