spring 2014 hilldickinson.com Substance abuse has been a troubling issue across a range of workplaces for many years. However, it is only over the last fifteen years or so What is the problem? As early as 2003 there were statistics indicating that up to 14 million working days are lost each year to alcohol related problems and 27% of organisations were reporting issues due to employees’ misuse of drugs. There are a number of ways in which employees misusing drugs or alcohol may be affected in the workplace. Some indicators are better recognised than others and include: • impaired judgment; • poor concentration and coordination; • unusual irritability, aggression or over-confidence; • inappropriate behaviour or erratic performance; • sudden mood changes from extreme happiness to severe depression; • significantly reduced response times and/or reduced productivity; • confused actions or a deterioration in relationship with colleagues; • absenteeism; • poor time keeping; and • lack of discipline and/or deterioration in relationship with management and/or customers, together with other more extreme actions (e.g. theft). The above indicators not only impact practically on the day to day life of the affected employee in the workplace and their productivity, but can also affect others. Behaviours such as these could lead to an employer being sued either directly or on the basis that it is vicariously liable for the actions of its employee, should a fellow employee suffer physical or psychological injury as a result – or by a customer if the result is, for example, a violent outburst (in certain circumstances). Finding out about an issue It goes without saying that you do not want employees in your workplace who are under the influence of either drugs or alcohol. However, identifying an issue and dealing with it effectively can be difficult. There is a delicate balance to be struck between protecting your workplace and workforce, providing employees with the opportunity to accept and remedy their problems and ensuring that, in taking these steps, you cannot be accused of breaching either data protection laws or your employees’ human rights. If you do have to take action to dismiss an employee, you need to have procedures in place to avoid a claim in the employment tribunal or civil courts. Substance abuse has been a troubling issue across a range of workplaces for many years. However, it is only over the last fifteen years or so that real steps have been taken to assess directly the impact of drugs and/or alcohol in the workplace from a health and safety perspective. Sarah Mills looks at the issues that employee substance abuse can cause for their employers, and considers how those issues can be dealt with via drugs testing. Drugs – don’t work! Asbestos: the sleeping giant Page 3 Noise claims: reducing the volume Page 10 industry insight manufacturing and utilities sector update >>> continues on page 2 Social media and your businesss Page 12 Welcome to the latest edition of Hill Dickinson’s newsletter focused on legal and associated issues in the manufacturing and utilities sector, industry insight. We hope that you find this both an informative and entertaining read. In each edition, our manufacturing and utilities sector legal experts – drawn from across each of our national offices – will keep you up to date with key developments in this wide reaching area of interest to you all. Our cover story takes a look at substance abuse and how the issue has troubled a range of workplaces for many years. Sarah Mills looks at the challenges and considers how those problems can be dealt with via drugs testing. Also, Simon Parrington considers the legal and health risks of asbestos and what you should do if you think it is on your premises, while we recap on the Enterprise and Regulatory Reform Act 2013 and analyse the story so far. Insurers, corporates and brokers have all witnessed an exponential rise in noise-induced hearing loss claims recently – numbers which have not been seen since the early 1990’s. I consider this recent trend and what defendants and their insurers might do to stem the flow. We also provide updates on the civil justice reforms and how social media can impact on the reputation of your business, while Andrew Allan provides a thorough and step-by-step guide to product liability claims and highlights when they might be made, who can make them and how they might be defended. Finally, we are keen for industry insight to be as interactive as possible, so please tell us your views; both about the issues we cover and on any points that you would like to see covered in future editions. Best wishes, Jason Bleasdale [email protected] Welcome >>> continued from page 1 There are a number of ways you might find out that an employee is abusing drugs or alcohol. In some workplaces drug testing may be appropriate and you may therefore spot an issue via that route. Alternatively, an employee’s substance abuse may come to your attention through the disciplinary process or you may be told about an issue by another employee. There is often recognition by work colleagues that any individual suffering from illness arising from alcohol dependence or substance misuse requires help (both medical and human resources). As a result, there is frequently an element of colleague or self-referral. This early warning approach assists the human resources department in arranging for an employee to be consulted and issues dealt with sometimes before they arise clearly in the work context. Drug testing An employer cannot force an employee to undergo a test for drugs or alcohol. However, the employee could face disciplinary action (including dismissal) if they refuse and the employer has good grounds for testing under a proper occupational health and safety policy. See below for more details on that aspect. The Employment Practices Data Protection Code also suggests solutions falling short of invasive tests such as assisted performance tests and use of equipment to measure hand – eye coordination and response time. Email and CCTV evidence can also be used. This all assists in providing some objectivity so as to ensure lawful and fair treatment of an employee, even in circumstances where that employee is not prepared to consent to formal testing. Policy and procedure Arming yourself with effective policies and communicating these to employees is key to dealing with substance abuse issues through drug testing – without leaving yourself open to claims that you have breached an employee’s rights. The procedure adopted should maintain flexibility and subtlety which will serve to ensure that there are no breaches An objective and clear policy will set out at least the following: • How the tests will be carried out. • What support will be available to drug and/or alcohol misusers. • What disciplinary action may be taken. A company’s drug and alcohol policy should set out not only the nature of the testing, but also the circumstances in which a test could take place; what the acceptable levels of use are for a particular substance, the possible consequences of being tested and how the information will be used. A clear health and safety purpose for the testing, combined with a clear policy, should avoid difficulties relating to an individual’s rights under the Data Protection Act and, equally importantly, any issues relating to fair treatment. It is, of course, still open to an employee to refuse testing – but a disciplinary approach to that individual would be all the more justified if there are policies in place and failure to submit to a test results in the employee placing either themselves or other employees at risk. Getting the police involved In extreme situations, it is possible for matters to be referred to the police for drugs testing. This will normally be in situations involving the misuse of a controlled drug (ection 7 Drugs Act 2005 allows the police to test for a specified Class A drug after arrest, and applies to persons aged 18 and over). Summary A properly thought through and comprehensive alcohol and/or drugs policy will arm you with the tools to target problematic behaviour in the workplace, resulting from substance misuse. It also enables relevant professional assistance to be provided to employees facing extreme problems, whilst at the same time allowing a reasonable employer the opportunity to consider providing an employee with a written warning/final written warning if the situation requires it. Sarah Mills [email protected] 2 History During the mid-twentieth century, asbestos, in all its different forms (blue, brown and white), was used widely throughout the UK in industry, retail and domestic premises for fireproofing, lagging, cladding and insulation. In the fifties, it was seen as the wonder material that fulfilled a multiplicity of use. Indeed, if you live or work in a building that was built or refurbished in the fifties, sixties or early seventies, then there is probably asbestos somewhere on the premises. In the 1970s the industry came to understand that, improperly handled asbestos fibres could form a fine fibrous dust which, when ingested by breathing, could lead to disease and death for the victim. All types of asbestos were banned for use by the early 1980s – but vast quantities remained (and remain) ‘locked’ into buildings up and down the land. Health risks The ingestion of asbestos fibres can lead to asbestosis, mesothelioma and lung cancer. These diseases are killers. However, unlike many diseases, they are also insidious and the victim may not develop a related disease for up to 30 years. However, from day one, it is too late to undo the harm. Legal obligations and consequences The Control of Asbestos Regulations 2012 places duties on employers to prevent not only workers from being exposed to asbestos, but contractors too. It is not, therefore, only your staff that are covered by the Regulations – but tradesmen such as visiting electricians and plumbers etc. who might be expected to disturb asbestos sheeting by using drills, saws or other such equipment. Indeed, anyone who comes on to your premises, is protected from the effects of disturbed asbestos by the criminal law and will also have a civil claim for damages against you. The consequences can be far reaching and expensive. Only last month, we were involved in the prosecution of a manufacturer who was convicted of offences relating to exposure of workers and contractors to asbestos. The fine imposed by the Crown Court was £60,000. What to do if you find asbestos in your premises What you must not do, if you suspect that you may have asbestos on the premises, is to disturb it. Undisturbed, it will probably pose no risk, particularly if it has only been used for pipe lagging. However, the best option is always to have premises surveyed for asbestos. If the survey report, and analysis of samples, reveals that you have asbestos which must be removed, then you must engage a ‘Licenced Asbestos Removal Contractor’ (a general builder will not do) and have it removed to licenced waste facility. Simon Parrington [email protected] Asbestos the sleeping giant Simon Parrington considers the legal and health risks of asbestos and what you should do if you think it is on your premises. 3 industry insight spring 2014 4 Chronic pain A trick of the mind or a real pain in neck? 5 What is chronic pain and how are claims for it best investigated? Andrew Higham considers a condition for which we are seeing an increasing number of claims. What is chronic pain? The definition of chronic pain can vary widely given that both pain and its effect are subjective to the individual. Some medical experts even dispute the occurrence of chronic pain as a physical condition believing it to be a psychological reaction. Where diagnosed, chronic pain is generally accepted to be pain which has lasted longer than either three months or beyond a period that would be reasonable having regard to the injury in question. The condition may be initiated by a definite problem or injury at a certain time or, alternatively, could come on gradually and perhaps for no obvious reason. Complex regional pain syndrome (CRPS) is a type of chronic pain condition which we are seeing being referred to more often in medical reports. It is broken down into two types – reflex sympathetic dystrophy (RSD) (CRPS type I) and causalgia (CRPS type II). These types of chronic pain most often affect one limb and usually develop following an injury or trauma to that limb. The source of pain is believed to be damage to, or malfunction of, the peripheral and central nervous system. The overriding symptom is extreme pain, frequently described as burning. Other symptoms can include sensitivity to touch, skin changes, swelling, weakness and decreased function of the affected limb. More often than not, the trauma sustained does not correlate with the level of pain reported. This can lead those defending a claim to suspect a claimant of exaggeration, malingering or even outright fraud. So, how do you work out whether that is the case or whether the claimant is genuinely suffering from this debilitating condition? Suspicious minds? Suspicion arises as a result of disparity between the physical injury sustained and the pain levels and on-going disability complained of. There is a fine line to be drawn between cases were the claimant’s on-going symptoms are genuine and those where exaggeration may be obvious and apparent. There are no set guidelines for distinguishing between these two scenarios – each case must be considered on its own merits. If it is established that a claim is being pursued fraudulently, a claimant (and indeed even their legal representatives) could find themselves in contempt of court or liable under the tort of deceit/fraudulent misrepresentation. The penalties for such a finding act as a deterrent and recent case law confirms that the court will, where appropriate, impose sanctions which, for contempt, could include a custodial sentence. What can you do? There are two aspects to dealing with potentially spurious claims for chronic pain, firstly finding out whether the claim is indeed suspect and secondly taking steps to prove that it is and persuading the court to take appropriate action. Surveillance may also assist, however, recent media attention has placed the practice under the spotlight and guidance from the Information Commissioners Office must be kept in mind: surveillance must be proportionate and reasonable. Surveillance undertaken in the wrong way can give rise to claims under Article 8 of the European Convention on Human Rights (right to family and private life) or indeed trespass. The effect of this is twofold – there is greater risk of a claim if surveillance is not carried out carefully and people generally are more aware of how surveillance is being used. This may make it difficult to undertake. Once a claim is pursued, steps which should be taken include obtaining independent medical evidence to assess, and potentially dispute, the reasonableness of the claimant’s reaction, reviewing all medical records and intelligence analysis. In addition to concerns about malingering or exaggeration, another worry with chronic pain claims is the cost of settlement. If a claimant is diagnosed with CRPS the long term prognosis can substantially increase the value of the claim both for general and special damages. Moving forward Overall, the prevalence of chronic pain issues continues to increase. Medical understanding from both a causative stance and indeed a treatment perspective is ever evolving. We need to be mindful of the possibility of allegations of chronic pain arising from the most minor of injuries which could increase the value of the claim significantly. Taking steps at the outset when investigating an incident, closely monitoring the situation, being alert to indicators of potential chronic pain throughout and working closely with your claims team in relation to such cases should provide ammunition to combat or reduce any subsequent spurious allegations of chronic pain. Andrew Higham [email protected] industry insight spring 2014 Early investigation Thorough investigation and management of the potential claimant at an early stage is essential. Within the legal process there is often little or no indication of the potential for chronic pain to be diagnosed until medical evidence is served which could be as long as three years after the accident. The claim could therefore already have a potentially significant value when a diagnosis is finally made. To counter such late formal notification, which will inevitably leave a defendant on the back foot, employers should keep an eye out for key indicators of chronic pain at an early stage. Investigations/actions should include: 1. Early intervention from occupational health to obtain a thorough understanding of the claimant’s on-going problems. 2. Access to the claimant’s medical records at this stage is also helpful to ascertain the position so far as his treating practitioners are concerned. Is there any underlying cause for the on-going problem? Does the claimant have a pre-existing condition which could explain the on-going pain? A diagnosis of CRPS often follows all organic explanations being ruled out. 3. Rehabilitation treatment. 4. Continued monitoring throughout the claimant’s absence and upon any return work. 5. If you suspect the claimant of being less than genuine, you may also wish to consider monitoring the employee’s social media comments. 6 A guide to product 7 When is a product defective? Section 3 of the Consumer Protection Act 1987 (the Act) defines the concept of defect in a product. This, in summary, states that there is a defect in a product if ‘… the safety of the product is not such as persons generally are entitled to expect’. Two questions logically arise: (a) What are consumers entitled to expect in relation to a product? (b) Did the product meet those expectations? In answering the first question, consideration must be had as to whether consumers are entitled to expect absolute safety with no risk or whether they must tolerate a degree of inherent risk. In the case of A -v- National Blood Authority (2001) it was held that there was an unavoidable 1-3% risk of infection in any given blood sample. However, as the general public were generally unaware of this fact, it was not inconsistent for the judge to find that consumers were entitled to expect a 0% risk of infection. Therefore an infected blood sample was a defective product. Turning to the second question, as to whether a product failed to meet the safety standards, a claimant will often plead res ipsa loquitur – that the very fact that a product failed must mean that there was a defect… and therefore the safety standards were not met. However, it is open to defendants to plead that there are competing explanations for a defect – such as improper use by the consumer, wear and tear, inappropriate storage or maintenance or defective installation. The relatively early case of Richardson -v- LRC Products (2000) provides an example. The case involved a split condom and the judge formed the view that consumers were not generally entitled to expect that a condom would not split. There was an acceptable inherent risk of failure in relation to that product. In summary, to satisfy the defect definition, a claimant must first consider what risk they are entitled to expect. If the product is such that they are entitled to expect zero risk (as in the infected blood case) then the claimant must first establish that the product failed in a way that is inconsistent with that expectation. The claimant can then invite the court to infer defect from this. If there are other competing explanations, the claimant must also positively exclude these before inviting the court to infer a defect. By contrast, if the product is such that the consumer is not entitled to expect absolute safety and there is an acceptable inherent risk of failure (as in the case of split condoms), then the claimant will have to go further and prove that the product’s failure was more likely to be attributable to a defect than the inherent risk of failure. Overall manufacturers and their insurers should take comfort from the above case law. There was undoubtedly an element of public policy in the infected blood case and therefore a stricter interpretation which may not be so readily followed in the case of more mundane products. Who is liable? Section 2 of the Act sets out a number of classes of potential defendant and also allows for manufacturers to bring additional claims under CPR Part 20 against other classes of defendant. Section 2(2) lists those defendants: (a) the producer of the product; (b) any person who by putting his name on the product or using a trade mark or other distinguishing mark in relation to the product has held himself out to be the producer of the product; and (c) any person who has imported the product into a Member State from a place outside the Member State in order, in the course of his business, to supply it to another. Under section 2(3) the person who supplied the product to the claimant may also be liable if the claimant has, within a reasonable period after the damage occurred, asked the supplier to identify one of the other potential classes of defendant, and the supplier has failed to comply with this request within a reasonable period. So, again, comfort may be drawn from this section of the Act as it gives the potential for a carve up of a claim between a number of potential defendants. liability claims... industry insight spring 2014 Andrew Allan provides a step-by-step guide to product liability claims: when they might be made, who can make them and how they might be defended. 8 Who can sue? Despite the misleading name of the Act, the claimant does not have to be a consumer: all that is required is that the claimant has suffered relevant damage. Therefore, a worker injured at work in a factory, as a result of a defective product, can sue. So too can a claimant who suffers property damage at home as a result of a fire caused by a defective appliance. The one qualifying clause within the legislation is that the damaged property is intended for private use, such that if a businessman suffers property damage in an office as a result of a defective product, he would have no valid claim for the damage to the property, albeit he could claim if he were injured. Statutory defences The statutory defences are contained within section 4 of the Act. The two most important of these are as follows: (a) The state of scientific and technical knowledge at the time when the product was put into circulation was not such as to enable the existence of the defect to be discovered. (b) The other important statutory defence is that there was ‘no defect at time of supply’. The definition at (a) is what is contained within the European Commission’s article. There is a slight difference contained within the Act which provides a defence where ‘the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control.’ The emphasis on discoverability – rather than scientific and technical knowledge within the Act – seems to make it more generous to defendants. Case law provides the example that the research of an Asian researcher published in Chinese would not be accessible to a European producer. A producer would not therefore be able to rely upon this defence once the discovery of the knowledge had been disseminated regardless of whether the risk was generally accepted as valid at the time of dissemination. Regarding (b), often products will be subject to a number of transportation processes where defects can occur. That being the case, it would be important for manufacturers defending a claim to show that they had done all that was practicable to ensure that no defect was within the product at the time it left their premises. Manufacturers should detail the systems they have in place in evidence to check products to ensure that there were no defects. If possible, manufacturers should also detail how a product will be transported from its premises to the claimant/consumer to highlight the possibilities of damage being caused to the product in transit. Overall message Although the Consumer Protection Act has a strict liability regime in place, there are nonetheless a number of hurdles for the claimant to overcome to prove a case. This may explain why, in the history of product liability litigation over the last 20 years, claimants are struggling to bring successful claims… and should provide comfort to those manufacturing products for the general public at large. We will consider the issue of economic loss arising from a product liability in a future edition of this publication. Andrew Allan [email protected] 9 industry insight spring 2014 Stop press Guideline hourly rates The consultation on guideline hourly rates has now concluded and the Civil Justice Council Costs Committee is finalising its review. It is to be hoped that this will be the culmination of a process to define a sustainable and forward thinking approach to hourly rates – whilst at the same time continuing a certainty of cost pricing. Doing so should allow complex and appropriate litigation to be processed to good effect for defendants, whilst also allowing for economies of scale savings on the more standardised claimant areas. In simple terms, an increased use of fixed fees for lower value claims whilst maintaining a focus on higher value, more complex or precedent setting claims on an effective basis. Civil justice reforms – a robust approach The Court of Appeal set down its civil justice reforms line in the sand at the end of last year, when it handed down its decision in Mitchell -v- News Group Newspapers. It was clear that parties would be expected to comply with deadlines or face having to make an application for relief from sanctions, which would only be allowed if failure to comply had come about for an extremely good reason. Hailed by some as a positive decision – strict, but allowing parties to know exactly where they stand – there has also been consternation. Subsequent cases, especially those reported anecdotally, show that consistency of approach is not necessarily being exercised across the judiciary. There is also concern that the decision is influencing an unnecessarily adversarial approach with parties refusing to agree extensions of time and looking to take advantage of their opponents’ difficulties in complying. With this strict approach extending across a huge range of litigation areas – having effect on all elements of proceedings including costs budgets, document service, witness statements and more – the Mitchell approach is, so far, having arguably the biggest impact to date. Paul Edwards [email protected] The trend The profile of noise induced hearing loss (NIHL) and the ability to claim for the condition has risen over recent years. The Institute of Actuaries confirms that a total of 50,000 NIHL claims within the UK in 2012 had increased to a figure in excess of 60,000 (plus claims notifications) by 2013. Whilst there has been progressive growth in numbers of claims since 2001, there has been a definite and very steep increase in new NIHL claims over the last two years. Why are claims rising? The original spike in claims might have been thought to result from claimant representatives signing up as many clients as possible – pre-1 April 2013 – before success fees and after the event insurance premiums became irrecoverable following the civil justice reforms. However, if that were the case, that initial spike might have been expected to have lapsed by approximately the autumn of 2013. This does not appear to have happened and, therefore, the continued intimation of NIHL claims suggests the influence of a range of other factors, including: • The Employers Liability Tracing Office (ELTO) – resulting in easier tracing of corporate insurance. • Greater public awareness of the potential to make a hearing loss claim, coupled with the willingness to claim fuelled by the downturn in the economic climate over recent years. • Greater claims farming activities in this area and more active marketing strategies for these claims. • Economic incentive on the part of claimant representatives to proceed with these claims. Claims frequently involve more than one defendant, raise causation issues or give rise to more drawn out and complicated liability issues. This allows them to fall out of the claims portal and therefore attract higher recoverable costs and greater profit for claimant representatives. The ‘new whiplash’? It had been hoped that a combination of the indemnity and costs impact of the civil justice reforms, taken together with increased ability to defend on causation and/or limitation, would have resulted in a steady decline in the numbers of NIHL claims. If spurious claims are being presented, the additional factor of improvements in the diagnosis of NIHL and associated conditions should also have an influence. However, as yet, this does not seem to have happened and the insurance industry is now asking how prolonged this rise in claims will be and how best to tackle it. There have been suggestions that NIHL claims could be the ‘new whiplash’. The actual ‘whiplash epidemic’ has come about through opportunistic and fraudulent claims being exploited. Deciding whether NIHL claims could also be taken to these extremes depends on whether or not a proportion of the claims being presented could be characterised as fraudulent rather than merely speculative. Where NIHL claims are concerned, the only real analysis which could result in a finding of fraud would be through either (i) a claim presented by an individual, which had been presented in near identical terms many years or decades earlier (thus representing a clearly fraudulent attempt to claim a second time around) or (ii) an attempt to misrepresent the factual details of the claim, either in terms of job description, duties and employment or the overall profile of the medical issues in question. How can claims numbers be reduced? The future success (or otherwise) of these claims will depend very greatly upon the collective will of insurers and corporates to fight them firmly. The advent of specific claims farmers seeking to produce large numbers of these claims in a speculative and odds-based approach means that the only antidote for the increase is to clearly identify and fight those claims that merit it and avoid settling claims on purely 10 Insurers, corporates and brokers have witnessed an exponential rise in noise-induced hearing loss claims recently – numbers which have not been seen since the early 1990’s. Jason Bleasdale considers the recent trend for these claims and what defendants and their insurers might do to stem the flow. Jason Bleasdale and Andrew Allan presented a webinar discussing noise-induced hearing loss, to over 700 viewers, on behalf of SHP magazine recently. It can be viewed here: shponline.co.uk/ home/features/full/noise-webinar-–-yourquestions- answered. 11 economic grounds. In respect of pre-April 2013 cases, this will have the advantage of achieving costs awards for defendants. Successful cases generally can be relied on to set a precedent going forward and thus short circuit or eliminate repeat or highly speculative claims. Specific steps to take in fighting claims include: (a) seeking access to historic documentation and witnesses; (b) pushing hard to obtain accurate medical testing and report evidence; and (c) following guidance, such as the Coles criteria, painstakingly. In truth, the factual and liability issues are almost entirely dependent upon the availability of either good quality documentation or key witnesses who can corroborate effective defence information or contradict allegations presented by claimants. Using this in combination with access to good quality medical testing and key medical record data should assist in defendants being able to obtain a good, objective and strong defence to appropriate claims. A team approach Overall it is this analytical and thorough approach to the defence of these claims that, taken across the insurance industry, should ensure that the present bubble of NIHL claims is short lived. As is the message with a number of, if not all, aspects of the recent civil justice reforms, defendants working closely together with their brokers and insurers to deal with claims quickly and efficiently, will reap the greatest rewards. Jason Bleasdale [email protected] industry insight spring 2014 12 Solicitor Katie Mickleburgh considers how the burgeoning popularity of social media sites impacts on the reputation of your business, its directors, employees and brand. Increased use, decreased protection? Social media usage has increased substantially over the last decade and has revolutionised how we all choose to communicate. Social networking sites, such as Twitter and Facebook, enable individuals and organisations to raise their profiles instantaneously and inexpensively. However, increased use of social media also presents an ever-increasing reputational risk for both individuals and businesses. A common misconception is that you have to live with an online reputational attack. This is not the case. There are several options open to your business in dealing with reputation problems arising from social media – by taking action either before something happens or reactively when it does. Here, we focus on the key points to consider, while future editions will focus on some specific issues in more detail. Social media problems with employees Broadly speaking, two kinds of social media use by employees cause problems for employers. The first is posting comments that reveal some form of work-related misbehaviour – for example, ‘tweeting’ about feigning illness or avoiding work. The second is where employees express views which employers do not wish their organisation to be associated with. We will focus on the latter. Employees expressing views on behalf of their employer? Employees complaining about the members of the public they have to work with probably always happened. These days, however, it happens more visibly and can be immortalised in cyber space forever. Virgin dismissed 13 staff who participated in a discussion on Facebook in which passengers were described as ‘chavs’ and made allegations that planes were full of cockroaches. The employees were dismissed on grounds of bringing the company into disrepute. In a manufacturing context, a similar issue might be caused by employees suggesting that a particular product is substandard. Confidentiality breaches Another significant risk for employers is when an employee breaches confidentiality via an online medium. Again, it is the kind of thing that, in the past, probably happened… but in a much more low key/low risk way with fleeting comments made to family or friends. External risk to reputation Another social media-related risk that businesses need to monitor is members of the public – unhappy customers, campaigners and ex-employees – airing their views online to a wide audience. Social media and 13 Taking action If comments are being posted by an employee, you may be able to take action via your disciplinary policies and processes. Where an attack comes from outside the business, or if comments made by an employee are sufficiently serious, there are other options to consider too. The usual recourse is via an action in defamation. The law in this area has changed recently with the introduction of the Defamation Act 2013 and the Defamation (Operators of Websites) Regulations coming into force on 1 January 2014. The Defamation (Operators of Websites) Regulations set out a procedure for website operators to follow in order to escape liability for comments complained of on their site. If this is not followed, they can be pursued in respect of the comments even if they are not the author of those comments. Under the Defamation Act, a statement can be said to be defamatory if its publication ‘… caused or is likely to cause serious harm’ to reputation. There is an added hurdle for businesses, as they also have to show they have suffered, or are likely to suffer, ‘serious financial loss’. However, if you think that is the case, this is one of the first options to consider. Actions in privacy and harassment may also be considered by individuals, so you may be able to support a company officer or employee doing so if comments have impacted them as well as the business. The cause of action in privacy cases is misuse of private information and is based on the values enshrined in Human Rights Act 1998 , including Article 8, the right to a private life. The Protection from Harassment Act 1997 provides protection to victims of harassment such as stalking, racial abuse and bullying. Harassing a person includes alarming a person or causing the person distress. There must be ‘a course of conduct’ which must involve conduct on at least two occasions. Again, if comments are being made in respect of a company officer of employee, you may look at pursuing this avenue. Finally, if comments online or on social media are sufficiently serious, a police complaint may be appropriate. Several successful high profile prosecutions have been brought. The author may be prosecuted for offences such as those under malicious communications legislation or, in appropriate situations, for contempt of court. In terms of your business reputation, a referral to the police may be advantageous either to highlight that such comments will not be tolerated, that an allegation is untrue, or to firmly distance your business from comments made by your employees. Managing the risk It is essential in this day and age to be aware of the inherent dangers of a medium that essentially publishes people’s innermost thoughts to the world instantly. Most companies are already aware of the importance of monitoring what is said about them online: allegations spread quicker online than in traditional media and so action needs to be taken quickly. It is clear that several members of the public have been lulled into a false sense of security thinking either that comments made, say on Facebook, cannot be disseminated beyond their intended audience, or that the criminal and civil law do not apply in this area. But this is not the case and businesses of all kinds are well-advised to develop an awareness of where to go for swift recourse and damage limitation externally should this prove necessary. Katie Mickleburgh [email protected] industry insight spring 2014 your business 14 Insurance found for a small manufacturing company in the north west The claimant alleged that her husband, now deceased, was exposed to asbestos during the course of his employment with our client, a longstanding manufacturing company, for a short period in the 1960s. She said that this had caused his mesothelioma. The manufacturing company was one of a number of employers, however, it was the only company still in existence and therefore the only company pursued for compensation. We were instructed on two fronts, firstly to defend the claim and secondly to utilise the ‘DisCover’ product to assist with the insurance tracing. In relation to the claim itself, it was alleged that the deceased worked in very dirty and dusty conditions and that this dust was likely to be asbestos. Our investigations allowed us to present a robust defence to the generalised allegations. Simultaneously, we were able to identify full insurance with the company’s historic insurers, again, by preparing and providing cogent and persuasive witness evidence which did in fact persuade the relevant insurance company that despite the absence of documentary evidence such cover must have been in place. Ultimately, with the instructions of both the client and insurer, we were able to negotiate a very low, costs inclusive settlement, on an economic basis. Itching to claim The claimant brought a claim for workinduced dermatitis against our client. She said she had developed an allergy to both cobalt and nickel whilst employed by the defendant and that she came into contact with these materials as a result of her work activities – and as a result of exposure to the dust/powder – generated by her work. The claimant’s medical expert supported her allegations, but upon review of the claimant’s full medical records, we noted inconsistencies. A full investigation at the site indicated a lack of exposure to the allegedly offending materials. Moreover, we obtained the court’s permission to instruct our own medical expert – a consultant dermatologist – who we provided with our investigation conclusions and associated documentation together with the claimant’s full medical records. Our expert concluded that the claimant’s skin condition was constitutional in origin and therefore unrelated to her work activities. In the circumstances, we invited the claimant to discontinue and subsequently obtained a strike out of the claim when the claimant failed to comply with directions. The claimant has also been ordered to pay £16,000 in relation to our costs. Taking a stand This recent case is a prime example of how standing behind a part 36 offer can reap great rewards. The claimant brought a claim for a relatively significant back and elbow injury sustained in a fall during the course of his employment. Our investigations and consideration of the medical issues indicated the possibility of a relevant pre-existing back problem. We therefore made a part 36 offer of £4500. A subsequent MRI scan confirmed our suspicions that he suffered from a degenerative disc disease which was constitutional in nature and therefore unrelated to the accident. Presented with this evidence, the claimant’s expert concluded that, but for this disease, the claimant would have totally recovered within five months of the accident and that the accident had not exacerbated the pre-existing constitutional problem. The claimant’s solicitors advised that the claimant would accept £10,000 to settle. We confirmed that we stood behind our earlier offer. Several part 36 counter-offers were presented by the claimant’s solicitors and the claimant also made an attempt to accept our previous offer out of time without any costs consequences. However, we maintained a robust stance, resulting in the claimant accepting our Part 36 offer almost seven months out of time. The claimant was therefore responsible for the defendant’s costs from the expiry of our offer, resulting in a significant saving for our client. Recent outcomes The manufacturing sector teams have had a number of notable successes in recent months. Here, we share a selection with you. 15 Don’t stress! The claimant brought a claim for work-induced stress resulting from his managerial position. He alleged that he had highlighted concerns about his stress levels but had not received help from his employers and that his workload had dramatically increased. The claimant was subsequently signed off sick with a stress related illness by his GP and did not return to work. We undertook a full investigation and denied liability on the basis that (i) our client’s first notification of the claimant’s stress was when he submitted his sick note at the start of his absence; (ii) no other report or complaint had been made by the claimant; (iii) that, in fact, the claimant’s work responsibilities had reduced in the months leading up to the alleged onset of symptoms; (iv)the claimant did not return to work despite two offers of alternative employment; and (v) his symptoms appeared to have totally recovered within one month of his announcing them. Following this robust denial of liability, the claimant withdrew his claim. Walking a tightrope… The claimant pursued a claim for relatively significant injury as a result of falling from height whilst at work. He had been accessing the rear of the site by walking along a narrow ledge with a two metre drop on one side. The claimant and his supporting witnesses alleged that the ledge was a traffic route and that using it for access to the rear of the site was custom and practice and that the management was both aware of and condoned this practice. However, detailed investigations confirmed that the manager and supervisors were not aware of the ledge being used as a walkway. We obtained a number of witness statements from all levels at the site which corroborated our argument that the claimant was essentially on a frolic of his own when the accident occurred. We maintained our denial of liability and the case proceeded to a two day trial. The judge was persuaded by our arguments and the witness evidence, concluding that there had been no breach of the Working at Height Regulations. As the ledge was not a traffic route, our client had not breached the Workplace Regulations and had not been negligent. The claim was dismissed with judgment for the defendant and an order that the claimant pay our client’s costs of the action. industry insight spring 2014 Stop press Mediation – as important as ever High Court trials have reduced from around 2500 per annum in 1989 to approximately 300 per annum in 2013. The vast majority of disputes do settle – but there is a mixed take up of mediation (in all of its forms). However, the judiciary is now calling very loudly for the use of mediation and alternative dispute resolution generally. The call was echoed by Mr Justice Etherton, in a case in November 2013, when he gave the parties a ‘strong recommendation that they should attempt to mediate’. In many cases, a joint settlement meeting may fill the void in providing a solution for settlement negotiations. However, there are a wide-range of cases (including stress claims) which benefit from the involvement of a third party independent mediator and the remedies that that process delivers. Certainly therefore mediation is firmly back on the agenda. hilldickinson.com ® Liverpool Manchester London Sheffield Piraeus Singapore Monaco Hong Kong industry insight spring 2014 If you would like to know more about our manufacturing and utilities claims services, or any other services we provide please visit our website or contact: Jason Bleasdale Head of Casualty Litigation Claims [email protected] Paula Leece Partner [email protected] Lisa Fletcher Partner [email protected] David Conway Legal Director [email protected] Andrew Allan Associate [email protected] Sarah Mills Associate [email protected] About Hill Dickinson The Hill Dickinson Group offers a comprehensive range of legal services from offices in Liverpool, Manchester, London, Sheffield, Piraeus, Singapore, Monaco and Hong Kong. Collectively the firms have more than 1350 people including 175 partners. The information and any commentary contained in this newsletter are for general purposes only and do not constitute legal or any other type of professional advice. We do not accept and, to the extent permitted by law, exclude liability to any person for any loss which may arise from relying upon or otherwise using the information contained in this newsletter. Whilst every effort has been made when producing this newsletter, no liability is accepted for any error or omission. If you have a particular query or issue, we would strongly advise you to contact a member of the manufacturing and utilities team, who will be happy to provide specific advice, rather than relying on the information or comments in this newsletter. On 1 October 2013 section 69 of the Enterprise and Regulatory Reform Act 2013 (the Act) came into force. This new section serves to reverse section 47(2) of the Health and Safety at Work, etc. Act 1974 by confirming that ‘… breach of a duty imposed by statutory instrument containing… health and safety regulations shall not be actionable accept to the extent that Regulations under this Section so provide.’ In short, the principle of ‘strict liability’ for certain health and safety breaches at work and, therefore, the automatic right for an employee to bring a civil claim for breach of statutory duty, has been removed in many respects. When the Act was being drafted some queried whether section 69 would significantly reduce the number of workplace claims. However this was never going to be the case as employers remain bound by their duties. Any breach of statutory duty, while not of itself giving rise to a civil liability, can still be used in support of any claim brought in negligence. Likewise, a breach can still lead to criminal action being taken by the Health and Safety Executive. Nearly six months on and the changes have undoubtedly introduced a litigation environment where the importance of the common law has been resurrected. There has been an increase in generic pleadings for breach of the common law duty of care, such as a duty to provide a safe place and system of work, a duty to provide safe plant and equipment and a duty to provide competent staff. It has already been recognised that whilst breach of the Regulations will not give rise to civil liability, they will still exist and to some extent are likely to inform the common law standard. There is now a need to prove some element of fault on the part of employers in order for a claimant to succeed on a claim. Accordingly, using the statutory change to ‘select the right fight’ is now of paramount importance. It seems likely that over the next couple of years, as new case law is developed, the burden of proof on defendants will shift in some scenarios and this may be seen as a movement back towards the claimant. The truth of the matter is that the combination of the removal of strict liability and an assessment and movement to a new area away from the previous unreasonably high burden on can only be seen as welcome. Going forward, it will be interesting to establish the how the Courts assess cases on similar facts to previous ‘tough cases’ (Craner -v- Dorset  (EWCA Civ 1323) and Hide -v- The Steeplechase Company  (EWCA Civ 545), given the change. Jason Bleasdale [email protected] Enterprise and Regulatory Reform Act 2013 the story so far Date Event 27 March Hill Dickinson civil justice reforms seminar, Lloyds of London 2 April Hill Dickinson fraud conference – profile of a fraudster, London 29 April Hill Dickinson civil justice reforms seminar north west, Manchester 16-18 June Airmic conference, Birmingham Sept/Oct (TBC) Casualty seminar, London Events for 2014 Here are some of the events that we will be either hosting or attending through the year. We hope to see you there!