September 2017


Body hire complicates compo claims

By Kate Tilley, Editor, Resolve

The lack of contractual relationships between businesses and workers they employ via "body hire companies" creates legal complications if workers are injured, barrister Geoffrey Watson SC told the AILA Qld Insurance Law Intensive.

Many businesses no longer had major workforces, preferring flexible workers they could engage and disengage. Rising workers' compensation premiums were "popular to blame" for the increase in contract hire companies.

Some employers required workers to establish "alter ego companies" to avoid the statutory regimes governing master-servant relationships because the duty of care was onerous.

Businesses could circumvent imposition of statutory workers' compensation regimes. But, if a worker was injured through a company's negligence, common law remedies for the worker were available.

"There is something inherently unfair in this," Mr Watson said. Two workers could have identical injuries and one would be entitled only to what was available under a workers' compensation scheme, the other could receive "millions of dollars" through a common law claim.

If two workers, one a direct employee and the other a labour hire worker, received identical injuries, one would be "stuck on the workers' compensation drip; the other is entitled to millions of dollars of damages at common law.

"There is something wrong with that and I am not sure that the solution will ever be found in the common law – it probably requires some statutory intervention," he said.

"It seems hard to imagine that the common law, which has imposed such an onerous duty upon an employer, can rationally impose an identical duty on a non-employer."

Mr Watson discussed several other "fundamental issues" that "regularly cross my desk". Another was the rise of psychiatric illnesses. "When I was a boy, you were mad if you went to a psychiatrist. Today 20% of workers will get psychiatric injuries."

He said the rise in psychiatric illnesses was not because more people were suffering the, but because they were being more generally recognised, and people were more willing to report them.

The rise in post traumatic stress disorder (PTSD), particularly in "risky and dangerous jobs", like the police force or ambulance officers, was a "vexed area of the law".

"How do you protect yourself against a claim for psychiatric injury that emerges slowly? How does the duty of care apply? How do you balance intruding in these circumstances? You have a duty to be proactive and the individual has a right to privacy."

Mr Watson said any job in which personal interactions were not always positive was risky, for example human relations managers. "They are always giving bad news."

Mr Watson detailed the NSW Appeal Court case, Optus Administration Pty Ltd v Glenn Wright by his tutor James Stuart Wright [2017], NSWCA 21, which ruled Optus could not have known a course participant would try to kill another attendee and should not be held liable.

The judges overturned by 2:1 a $3.9 million damages finding and cleared the telco of responsibility for the 2001 incident (see Resolve, June 2017). Mr Watson said the injured man, Glenn Wright, is seeking leave to appeal to the High Court.

In State of NSW v Briggs [2016] NSWCA 344, Mr Watson said "a very generous judge" had awarded former police officer Ryan Briggs a large sum for PTSD. The case was overturned on appeal. Mr Watson said privacy issues were a key consideration after Mr Briggs had told a supervisor he was "struggling". Mr Briggs has been granted special leave by the High Court.

Mr Watson said Griffiths v Kerkemeyer damages was "a real bugbear of mine". The 1977 High Court decision considered the value of gratuitous services provided to injured people by their families.

Mr Watson said he was "stunned" that so many claims sought Griffiths v Kerkemeyer damages. He said the doctrine had developed when domestic nursing was unavailable and family members were the only option. "It has extended to car washing, house painting, mowing the lawn, and walking the dog – these are not Griffiths v Kerkemeyer damages."

"But for the accident, a claimant would have attended to these kinds of things – before the accident a claimant would have spent his or her valuable time attending to these dreary chores. The claimant's time had a value before the accident, just as much as it has a value after the accident; there is no loss to the claimant: his or her valuable time is being saved, thus cancelling any loss."

Mr Watson criticised the rate at which Griffiths v Kerkemeyer damages were paid, saying $35 an hour in Brisbane and $55 an hour in Canberra reflected what an agency would charge for the work. The agency rate included the agency's profit, workers' compensation, overheads, and tax taken from carers' wages. He said the award rate for a nurse's aide was about $20 before tax. "Why is an injured person's compensation including tax? This is important, someone must ask these questions," he said.

Mr Watson also criticised Lord Campbell's Act claims, which seek compensation for wrongful death. He said they were "grossly overcompensated" because "obvious contingencies" were not considered. For example, the potential for divorce, remarriage, a deceased changing to a lesser paid job, and "the vagaries of contemporary life, like drugs, alcohol and gambling".

Mr Watson said Lord Campbell's Act claims were "wildly over-assessed" and damages were probably double what they should be because statistical information was not being considered.

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