The New Regime Emerges…
Welcome to our April 2019 newsletter & an update on the recent developments & issues facing us all as we reach the second quarter of 2019. In my commentary last month, I indicated having monitored with interest the ongoing changes in the statutory liability area with a great deal of interest. The Health& Safety at Work Act 2015 was effective on April 4th 2016, & only now are we really getting some insight into the impact on employers & their insurers.
Under the former legislation the regulator, Worksafe, was allowed six months after an accident to decide if charges would be laid. The new Act allows 12 months & it appears Worksafe have taken full advantage of this extended interval which means the outcome of delayed prosecutions are only now starting to emerge.
In the 2~3 year run up to the introduction of the new legislation there was much official rhetoric on toughening up on PCBUs [Persons Conducting a Business Undertaking] with harsher penalties for perceived guilt.
As if this was not enough The Sentencing Amendment Act 2104 [as I discussed last month], opened up the scope for increased reparation sums in injured workers & the Courts are now clearly responding with significantly greater awards with the “affordability” test being satisfied by the existence of Statutory Liability insurance.
The way ahead was sign-posted in a District Court decision on May 22nd 2017 in the case of WorkSafe NZ v Wai Shing Ltd where reparations totalling $336,300 were awarded which included $226,300 top up of ACC benefits plus $110,000 for emotional harm. The company was fined just $37,500 & its director $12,500.
Some influences on the sentencing decision were:
I am aware of several other cases where the Worksafe sentencing submissions are seeking greatly elevated reparations & harsher fines. Insurers are beginning to focus increasingly on workplace bodily injury exposures.
- The company did not follow basic Health & Safety management practices, that was; understanding & acknowledging risks associated with operating a mechanical harvester, despite using it since 1996;
- The employee was not adequately trained in the use or transport of the harvester;
- The company had no emergency plan for when a person is injured whilst working independently;
- The company failed to notify WorkSafe of the incident when its inspectors visited the property on an unrelated matter two weeks following the incident [Worksafe was only alerted to the incident approximately six months later by the wife of employee].
- The employee is now a tetraplegic & requires 24 hour care.
The future is here.
Should you have any enquiries regarding these developments, or just simply wish to check adequacy of your existing levels of indemnity, then please call us. We look forward to speaking with you all again soon.
With my best wishes & kind thoughts,