"ACTS OF GOD"

Evening Post, Volume CXVI, Issue 147, 19 December 1933, Page 12

"ACTS OF GOD"

CLAIMS BY WORKERS

THE COMPENSATION LAW

PROPOSED CHANGES

The provision in the Finance Bill regarding the liability of insurance companies in respect of workers' compensation claims arising out of "acts of God" gave rise to considerable discussion in the House of Representatives this morning. Moving the second reading of the Bill, the Minister of Finance (the Rt. Hon. J. G. Coates) explained that the , clause was necessary as a result of the ' recent Privy Council decision in the case of Brooker v. Thomas Borthwiek and Sons. Mi-. J. A. Lee (Labour, Grey Lynn): A big bonus to the party funds. Mr. Coates: That is an exaggeration that is not worth talking about. It is a peculiar mind that will interject like that. It is a very unjust remark -for anybody to make. I am debarred from using the term I would like to use. The Minister of Finance said that, j broadly speaking, the decision of tho Privy Council was as follows:— (a) Where a worker is injured by some force of Nature—lightning, heat of sun, extreme cold (unconnected with the employment)—he cannot recover unless he can show he was exposed in a special degree by his employment to suffering such an injury, but if by physical contact with the place of employment injury results therefrom this associates the accident with the employment and nothing further need be considered. If the roof falls on him or he slips on the premises, there is no need to make further inquiry as to why the accident happened; (b) the fact that a workman is injured in the streets while on his master's business establishes an accident arising "out of" the employment, though the risk was shared by all members of the public using the strpets in like circumstances. CONSTRUCTION BROADENED. . It could bo reasonably suggested, said Mr. Coates, that when the workers' compensation legislation was first introduced into New Zealand, it was not contemplated that an employer would be responsible for personal injury to a worker caused by an earthquake whilo in the course of his employment; but by a long line of eases the construction of the words "arising out of" had been progressively broadened until they were now faced with a liability on employers, which in the event of a disastrous earthquake in a thickly populated area, would be unquestionably greater than could be borne. That liability had to be met even though the risk to the worker was no greater than to members of, the general public, who might be equally exposed in the locality. Mr. Coates said it might be contended that the risk was one which it was possible for employers to insure against, but the contingent liability was so immeasurable that the insurance companies had stated their inability to continue to undertake, it. If the companies withdrew, the' resources of the State office might be totally inadequate to meet the liability, and of course it would be useless to expect individual employers themselves to meet the responsibility which present insuranto resources found it impossible to undertake. From the purely practical point of view of finance', therefore, it was necessary to bring the present employers' liability in the event of an earthquake disaster within limits which could bo envisaged, so that adequate provision might continue to bo mado for it. It might be reasoned that no accident arising out of an earthquake should be compensational on the ground that an earthquake was an act of God, but it was not proposed to go as far as. that and the clause in the Bill limiteel exclusion of liability to accidents arising out of the real "community" risk—the risk of falling buildings and of fire following earthquake. That risk was one to which all men in sonic degree were exposed, whether the matter came within the provisions of the Workers' Compensation Act or not. PROVISION IN CONTRACTS. Since tho Hawke's Bay disaster the Government had been seriously concerned to find, some way of mitigating the financial loss which a severe earthquako entailed without having recourse to public funds for rehabilitation purposes, as was necessary in 1931. One of the conclusions clearly established from the San Francisco and the more recent Napier earthquake was that tho greatest damage to property was from fire following earthquake, but in common with the practice in other parts of the Empire New Zealand fire insurance policies did not ordinarily provide against loss by fire following earthquake; If such protection were required, it was necessary to contract for it specially, and pay an increased premium, which was relatively high and more than the average insured could afford to pay. It was the case also that lessons taught by earthquake disaster were soon forgotten by the community in general, and property owners were inclined with a return to normal conditions to dispense- progressively with special insurance against the consequences of earthquake. Thus to protect owners against their own shortsightedness, and to conserve- the liquid resources of the Stale in the stress of earthquake catastrophe, it was considered that fire insurance policies should provide as a usual term in the contract insurance against fire following earthquake. Power was taken in the Bill to approve fire policy conditions and to ensure that they were uniform, but it was not proposed to exercise the power until an agreement had been arrived at with the insurance companies as to the rates and conditions. It was recognised that the inclusion of tho risk presented considerable difficulties both to tho companies and the State Fire Office, and that'it was necessary for the matter to be referred overseas and for the companies to consult together before finality could be reached. That might not be for some inpnths. "ASTOUNDING." The Leader of the Opposition (Mr. M. J. Savage) said that the.Minister's explanation had been astounding. The question was: Who should carry the liability? Was it anyone in New York, Australia, or in some place outside New Zealand altogether? "Is it not a fact that we all carry the liability, whether done in an organised fashion or in a piecemeal fashion?" he asked. Property could be insured, but life could not. The Minister asked how was it possible that a premium could be stated? Mr. W. E. Barnard (Labour, Napier): Ts property more valuable than life? Mr., Savage proceeded to quote from the Privy Council decision in the Hawke's Bay earthquake compensation cases, and referred to the fact that the provisions of the New Zealand Act were identical with those of the English Act. If a worker were injured in Britain, the English Act would cover him, but New Zealand was to lead the way in a new principle and was not going to follow Britain. Insurance companies accepted risks on properties, but in the case of a man being injured as a result of an earthquake the Minister wanted to know who was go-

ing to accept the responsibility. The Minister contended that it was impossible to arrive at a premium that would cover the risk. "Wo can arrive at a premium to cover the building," said Mr. Savage, "but not to insuro the individual who happens to be in it." 'RISK WITH PEOPLE. Mr. Savage said that in the finish the people of New Zealand had to take the risk, oven if it meant by taking up collections. The question was whether the people should take the risk in the organised orthodox methods of insurance. "The Bill is going to destroy that cover, and I hope the House will never stand for it," said Mr. Savage. "Whether we have an insurance cover or not, the people of the country must ] carry the risk. We should not desert anyone in disaster." Mr. Coates: Who suggested that? Mr. Savage: The Bill means nothing else. Mr. Coates: The lion, gentleman is arguing two ways. Mr. Savage said that men who had got compensation for the Hawke's Bay earthquake would not receive compensation in any future earthquakes if the Bill were passed. The Privy Council said that the men were entitled to compensation.