Hopefully, you will never be in this situation: it’s a manufacturer’s worst nightmare, and particularly nasty if you’re in the safety wear business where lives are at stake. While there are specific steps that you can take to manage a situation when safety product fails, once injuries have been dealt with and the situation has been made safe, that’s when the finger pointing can start.
Among all the uncertainty, there are some things that are certain: if the injured person has time off work, they will expect compensation. Some injuries do permanent damage so again, compensation is expected. Research shows that people are more likely to be dissatisfied and sue if they perceive the post-injury process to be unfair. Whether we like it or not, individuals feel that corporate defendants who publicise their profits are inherently less trustworthy and fair (WJ Koch, 2001). So it is in your interests to show compassion and listen when someone is injured as a result of a safety product failure. You may not agree with everything they say, but just listening and showing that you are human will go a long way to blunt the litigation sword.
Who gets what from whom? Before you do anything, if an accident does happen involving your safety product, you should check your insurance policy. Often a call to the broker or the insurance agent will trigger a process of investigation, case management and lawyers being appointed. But this does not mean that you can wash your hands of the matter. After all, if your insurer pays out a claim, that will affect your future premiums. Aside from the financial consequences, it’s your reputation on the line. Take an active part in the management of a claim and don’t just leave it to your insurers and lawyers.
There are at least three ways that claims can be made against you: directly by the injured person or indirectly by a customer who has been sued by an injured person or the relevant WorkCover authority. If your product was used by a worker who was injured, they can bring an action directly against you. The amount that can be claimed has been significantly limited by legislation in most jurisdictions (for example, the Wrongs Act 1958 (Vic)) so we don’t tend to see the fabled multi-million dollar claims of yesteryear any longer. Some safety wear manufacturers make goods that are combined with other goods to make safety wear. For example, metal clips may be combined with fabric webbing to make safety harnesses. If you happen to manufacture the metal clip, it’s unlikely that the injured person will sue you directly. But your customer who manufactures and sells the safety harnesses may be sued. If your customer believes that it was the metal clip in the harness that failed, you might find yourself with a claim from your customer.
If you were smart up front, you would have negotiated a contract with your customer where your liability is limited to a specific amount of money. But so often, folks are so happy to do business that they don’t read the fine front and just sign on the dotted line. Although product failure shouldn’t be a common occurrence (we hope not, anyway!), reading the fine print before you sign on the dotted line can save you a lot of money and uncertainty if this sorry situation happens.
More often than not, people who get injured due to safety product failure were at work. Their first port of call will be a claim on their employer’s worker’s compensation policy. Being a no fault compensation scheme, it is relatively quick and simple to make a worker’s compensation claim. Certainly, it is faster than going to court. However, if your product had a part to play in the injury, you can be sure that the relevant WorkCover authority will make a claim against you. Dealing with these indirect claims can be difficult, particularly if the worker who was injured is not cooperative. Claims are often made up to three years after the injury happened, and it is not unusual to receive a claim a few days before the three year time limit expires. So when you do experience a safety product failure, keeping good notes and records is critical. In three years’ time, you can be sure that memories will have faded and often, people will have moved on. In many cases, if you want to save time and money and prevent lengthy distractions to your business, settling the matter may be the best way to go. Settling doesn’t mean that you have to admit liability and it doesn’t always mean paying out a lot of money.
In many cases, being listened to, acknowledged and receiving an apology can help an injured person get on with their life and help you get on with your business.
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