Cedric Stephens | Accident compensation in uninsured workplaces

Question: On April 1, you wrote that the local motor insurance law was shortchanging accident victims. The monetary limits in the legislation of five other Caribbean states were higher than those in ours. I read in last Sunday's Gleaner that a local Supreme Court judge recently awarded a labourer $75 million. The labourer lost an arm in a workplace accident. Would an insurance company be involved in the payment of that compensation? Are there laws that mandate that employers must have insurance coverage to compensate employees who are injured in workplace accidents?

- G.M.S., Business owner

Answer: Thanks for bringing last Sunday's article to my attention. I saw the headline, but like some males, the 'big butts ... better bodies' lead story was the focus of my attention.

Trying to keep up-to-date and relevant amid that kind of distraction and at the same time, making connections between the 800-plus articles in my personal database and information from a variety of other sources are some of the challenges that other contributors to this newspaper and I face each week.

One plus of this for me, however, is that until I am seated before my computer, I don't have a clue where my response to readers' questions and comments will lead.

"Expectant mothers not knowledgeable about insurance benefits, (say) health insurers" surprise, surprise! This was the headline in the July 31, 2018, issue of this newspaper. I remembered the article as I thought about the response to your questions.

Don't health insurers read the Sunday Gleaner? Have the two providers, who have been offering coverage for decades, only just discovered the complexities of their products?

Two pieces I wrote came to mind: "Pregnancy and health insurance: An independent view", May 7, 2017; and "The complicated business of health insurance", June 10, 2018. Those thoughts were triggered by an email I received from the chaplain of a church group that invited me to participate in a health insurance forum. This led me to the words in the Gospel of Mark: "A prophet is not without honour except in his own town, among his relatives and in his own home."

The injured man's employer did not have insurance in place at the time of the accident. This would have protected him in case of work-related accidents to employees. He was not present in court or represented by an attorney. If he had coverage, the insurer would have paid for the services of an attorney and he, or she, would have been present the trial.

The non-existence of insurance also means that the funds to pay the court award will have to come directly from the employer's pocket and not from an insurer.

The question is, given the employer's inability to get legal representation, is it likely that he'll have the funds or enough assets to convert to cash to pay the $75 million award? The worse case is that at the end of the day, the injured man's expectation that "me a go get some money as me deh yah a suffer" is likely to remain unfulfilled.

The case will have wider impacts beyond the injured ex-employee and one St Thomas quarry operator. In my opinion as a non-lawyer there is compelling evidence that the main point in April 1 article, "Motor insurance law shortchanging accident victims" was accurate.

It is hardly likely that a trial judge would use an entirely different yardstick to measure in monetary terms the effects of a physical injury to a passenger or pedestrian in a motor vehicle accident and another person in a work-related accident. The existing limits under the motor vehicle legislation are scandalously low. The government should increase them post haste.

Employers in Jamaica are not forced by law to buy employers' liability insurance. This is even though employers have a legal duty to provide employees with safe places to work and to prevent workplace accidents.

As the St Thomas award shows, courts are not averse to making substantial awards when persons suffer serious injuries during their employment. Some employers who buy insurance to protect their legal liabilities to employees underestimate the size of potential court awards by tens of millions. Because the protection afforded by employers' liability policies is not open-ended, employers should consider upgrading the limits under their policies.

With all the talk about small business enterprises, aspiring and new entrepreneurs should be aware that there are many risks associated with the operation of businesses. This is one area that should not be overlooked as the St Thomas quarry operator is about to find out.

More on mediation

Finally, I received a response from Donna Parchment Brown, CD, JP, and notary public, to my article last week - "Mediation as a time-saving tool". Her email, which arrived just before this column went to press, and proves the point I made earlier, read in part: "The use of alternative dispute resolution (ADR) clauses in all insurance contracts and naming the Dispute Resolution (Foundation) as the facilitator/provider would enhance knowledge, access, and reliable service in the insurance sector. The DRF has already developed appropriate ADR clauses, which the sector can use.

"The DRF is very active and has a large roster of Supreme Court mediators and others qualified ... to practise in other courts and outside of the courts."

- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com