Alliance articles

Ever been at the wrong end of an employee’s injury claim?

Bosses who have been caught out by an expensive injury claim from a disgruntled worker helped by the ‘no win, no fee’ brigade may soon be able to rest much easier.

The Compensation Act aims to curtail the activities of claims management companies and reduce the possibility of businesses being forced to pay out compensation even when no significant fault can be proved.

“A lot of claims faced by employers under the present ‘no win, no fee’ system come from disgruntled former employees two or even three years after they have left the business,” says our groups claims manager David Jacob.

“They have been promised money by these claims management companies – who, in addition to their usual fee, are able to claim a win bonus which can push their fee up by 100 per cent – and just sit back and wait for the money to come in.

“It doesn’t matter whether or not they have a solid case; they are encouraged to make a claim because it costs them nothing, and the employer’s insurers settle to save themselves an expensive and time-consuming court case.

“Businesses then have to pay increased insurance premiums because the worst claims you can have on your record are employer liability claims.”

David says the Act should be good for employers, good for insurance companies - and bad for solicitors –“but they have had a very good run for a long time.”

Of course, if companies already have a good health and safety system in place, they are less likely to face employers’ liability claims, now or in the future.

“Get your health and safety up to scratch and you’ll have a much greater chance of defending yourself,” says David.

The Act comes into force in the spring – until then, warns David, employers should be very careful when dealing with allegations of negligence or breach of statutory duty and avoid any action that could be taken as an admission of liability.

For more details contact David Jacob, Group Claims Manager, Alliance Corporate Risk Management, on 0870 777 1496 or 07775 835035, or email david.jacob@allianceweb.co.uk