Are Insurers settling too quickly?

Leading loss adjuster, Garwyn, has recently been involved in a work equipment accident claim on behalf of QBE in which the employer Defendant has had its judgement on the case upheld in the Court of Appeal. Garwyn believes that the outcome of the particular case – Couzens v The McGee Group - could provide insurers with an important signal that, with thorough preparation and a good legal and loss adjusting team, quick settlement isnít always the best solution.

John Bundy, Director of Legal Services at Garwyn comments: ìDefendants have not faired well of late so far as work equipment cases are concerned. With that in mind it would have been very easy for the Defence team to choose to negotiate an amicable settlement and avoid the litigation risks. However, with good evidence from the Defendant employers and strong support from the legal team of Housemans and Counsel Mr Angus Withington of Henderson Chambers, QBE decided that this was an appropriate case to contest to trial in the lower Court. The Defendants were successful and the Claimant appealed.

ìHaving successfully defended the claim, it was then decided to maintain their stance via arguably a more precarious route (given previous authority) to the Court of Appeal. The outcome clearly justifies the running of the litigation risk and tactical decisions.

ìInvariably and in the main for good reason, insurers will see it as commercially sensible to seek an economic settlementî confirmed John Bundy. ìHowever, the result in the Couzens v The McGee Group case shows that the Courts are prepared to apply Regulations in a fair way towards employers. One wonders how many cases such as this have been settled when with investment in thorough preparation a more favourable outcome could have been achieved?î

The Case
The Court of Appeal recently delivered Judgment in the case of Couzens v The McGee Group [2009] EWCA Civ 95.

The claim centred on an accident, said by the HGV driver claimant to have been caused by a makeshift piece of equipment (a piece of scrap angle iron said to have been used to scrape mud from the vehicles wheels and which the claimant stored in the driverís door pocket) which caught in his right trouser leg. It was the claimantís case that that prevented him from lifting his foot from the accelerator onto the brake with the result that he lost control of the vehicle, it overturned and he suffered a fractured pelvis. He blamed his employers for the injuries sustained, on the grounds that they had not provided a suitable place in which to safely store the makeshift tool.

The case involved in particular a consideration of Regulation 3(2) relating to ìwork equipment provided for use at workî. On this issue, the Court unanimously decided the Regulations did not apply to the use of the makeshift tool because the employer had not permitted its use.

Although the Court found that the makeshift piece of equipment was being used at work by the employee and therefore fell within the strict terms of the Provision and Use of Work Equipment Regulations 1998, the Court of Appeal decided that the Regulations do not apply when the employer did not know of its existence nor consequently that the item was being stored or used.