ACCIDENT INSURANCE.

New Zealand Mail, 27 August 1902, Page 38

ACCIDENT INSURANCE.

! A paper read by Mr Montefiore, (Vice-President, at the monthly meeting of the Insurance Institute, held on Thursday, August 21st, 1902. Mr President, when I, in a weak moment, partially promised to read you a paper on an accident subject I certainly had no idea that my time in other directions would be so fully taken up. The subject was so wide that I hardly knew where or .when to start. However, after consideration, I thought it would be better to tackle what is now a very burning question in this colony. I refer to the liability of employers to their employees for accidents arising out of the employment, and the position of the insurers when indemnifying such employers. An.d really when you come to find how many Acts govern the matter in New Zealand it becomes almost a wonder that any one has the courage to employ labour at *all. As a matter- of fact, it would be impossible for any man of small means to do so were he unable to obtain indemnity by way of insurance.

COMMON LAW. In the first place there is the liability under Common Law ; under which, the ' amount of damages awarded, is merely limited by the opinion of the jury ; in cases where the employer is unpopular the amount is frequently assessed by a sapient jury at what it thinks the employer is able to pay, and quite irrespective of the actual or proper compensation due. The Common Law liability in New Zealand has been much extended to what it is in comparison with the law in Great Britain. Canada, or Australia. It is there held that claims could not be sustained by employees at Common Law •unless the injury was caused by direct personal negligence of the employer. as distinct from the negligence of a fellow-employee or person entrusted with superintendence. Thus it is nearly impossible for an injured man employed by a public company, or large concern to succeed under this count ; as all those to whose orders he is bound to conform wouid be fellow-workmen, being all employees.

EMPLOYERS' LIABILITY ACT. In order to remove this state oi •things and to allow compensation to injured persons where carelessness had been displayed by the use of defective machinery, ways, or means ; or the fault of a foreman, the Employers’ Liability Act was passed ; thereby very materially, and I think properly, increasing the liability of the employer. Still the incidence of this Act was much restricted by the rulings under Common Law, and in order to cope with certain dangerous trades a further Act was brought intC' force in Great Britain known as

i* THE WORKERS’ COMPENSATION FOR ACCIDENTS ACT.” This Act, however, was rigidly restricted to certain defined trades and dangerous occupations only. It gave to any employee who, met with an accident, whilst actually employed at the employment, compensation, not exceeding half wages, or a maximum of 2C>s per week after, and not including the first two weeks, for so long as that employee was disabled. It also allowed the sum of not more than £3OO to the dependents in the event oi the decease of the injured man, the amount being assessed by arbitration. The arbitrator may be :

1. A committee. 2. A single arbitrator agreed upon. 3. The County Court -Judge. 4. An arbitrator appointed by the County Court Judge.

When the arbitrator is not the County Court Judge, he may submit any questions of law for decision by the County Court Judge ; and there is an appeal on questions of law from any decision of the County Court Judge, whether on any such submission or where he himself acts as arbitrator, to the Court of Appeal and from the Court of Appeal to the House of Lords.

This Act has been practically reenacted here, but with some alterations which have extended its scope to any industrial, commercial or manufacturing work carried on by or on behalf of the employer, as part of his trade or business, and, which, by special clause, includes employees on every ship or vessel of whatsoever kind, and however propelled on or in any navigable or other waters within New Zealand ; or the jurisdiction thereof ; and increasing the maximum payable per week to £2, and the maximum sum payable to dependents, in event of death to £4OO. One good point in our Act, however, is the fact that weekly payments cannot in all exceed £3OO as against half-wages for an indefinite time in Great Britain. As is well known to all Life Companies, annuitants seldom if ever die, so- that there is some satisfaction in knowing definitely the total sum payable ; but it la generally, agreed by experts that our Act is ftt least 50 per cent, more

onerous than the Home one. Now in considering the effect of this Act here, it must be remembered that in the first place no Act has been so repeatedly adjudicated upon, during the short space of time it has been in existence in the Old Country, and there appears to be no finality ; each individual case having some slight difference, which has caused some different decision to be given, thereby upsetting some previous test case and necessitating further appeals. As a consequence of our Act, as I said before, following so closely on the English one, the employer or his indemnifier is in the same position here, and it is much to- be regretted that when the New Zealand Act was introduced advantage was not taken of the various rulings .given at Home, and that the ambiguous phrases were not altered. Still it does not as a rule take long to enact an Amending Act in New Zealand and already I see through the press that the Act which came into force in June, 1901, (14 months ago) will probably, be very much intensified by attempts to increase the compensation payable to full wages from the date of accident, and (or) making the compensation payable after the first day. Probably a compromise between the two will be effected. SHIPPING AND SEAMEN'S ACT. Ti an employer is a ship owner, then, in addition to these Acts already referred to he has *' The Shipping and Seamen's Act ” and amendments, which make the employer liable for full wages up to the time of the termination of his articles, but not exceeding three months, and medical and other expenses incurred. This Act is now sought to be increased by making the compensation payable as above to three months in any case provided the disablement continues so long. Should a vessel be lost with all hands in New Zealand waters a very heavy sum averaging probably £3OO per man would have to be paid by the owner, in addition to the loss of the vessel, freight, etc.

MINING ACT. If an employer is a mine owner or mining dredge owner then there are the terrors of the " Mining Act ” and amendments which permit any case to be heard summarily before the Warden and not by the Arbitration Court. This Act also is under request for amendment by the Miners' Union, which desires that certain provisions which were removed by the Workers’ Compensation Act should be restored. These provisions being Sections fifty-two and fifty-three of ‘‘ The Coal Mines Act, 1591.” and Sections two hundred and sixteen and two hundred and seventeen oi ” The Mining Act, 1898,” are hereby repealed. They made every accident priina facie evidence of neglect, by the owner ; the effect of which was that virtually common law damages were given with no limit, writs being issued for sums of from £2OOO upwards. Imagine the position of a coal mine here should such a disaster occur as that recently at Mount Kembla. The mine must go into liquidation because the damages awarded would be simply bounded by what were the total assets of the Company and the number of dependents among whom they would be divided. FACTORIES ACT.

If an employer is a manufacturer, then the provisions of the '* Factories Act ” apply, and really extend the liability under the ” Employers' Liability Act.” You can thus gather from the above the absolute necessity for obtaining indemnity of liability. Of all these Acts, however, the most dangerous so far as regards the liability of the employer is the ” Workers’ Compensation for Accidents Act ” with possible amendments. Yet, strange to say, the various Employers' Associations throughout the colony have never made more than spasmodic halfhearted attempts to have such amendments made as would definitely limit the possible loss, having chiefly restricted themselves to obtaining reduction of premiums. Yet any properly organised approach to our Legislature should have so modified their liability that rates could be reduced. It does not seem to have struck them that every added liability must of necessity increase the rates. One of the most difficult features of this class of insurance is that employers generally insist, not upon looking at their cover as an indemnity, but as actual sickness, life, and accident policies issued to their employees, quite irrespective of the legal liability. Now unfortunately our Arbitration Court, which has to deal with these matters, is so overtaxed with other affairs that it is unable to go into the various test cases which are pending. It has been suggested than all cases should be heard before the Stipendiary Magistrate. That, however, I am of opinion would not be advisable in the interests of employers, as it requires the judicial mind and secure position of a Even already

in other cases see how when the Judge gave a decision against a certain body there was an immediate attack upon him, and it was the indignation of the community at such an attack on the Bench that gave him that security. A Stipendiary Magistrate does not hold such«independent position, but I think they might be allowed to adjudicate on all amounts under say £SO, and.also decide whether other cases should be sent into the Higher Courts without security of costs. I hold the opinion that it is the duty of the indemnifiers to their clients to hold the scales fairly, to endeavour to administer the Act as it stands, and not in any way to endeavour to increase that liability merely because afterwards the rates can be increased. I shall now proceed to show you some of the very great abuses of the Act.

Firstly.—There is, as is very natural, an attempt to bring in every physical defect, existing disease and predisposition to disease as an accident for which the employer is liable.

The following instances will do as examples : Heart Disease, of which there have been several cases. A man for example has suffered for yearq from this. He becomes- very bad. Discovers that some weeks or months before he remembered straining himself when at work. Mho is to prove that he did not so strain ? You cannot look into his inside, and in the event of death you are unable to obtain a post mortem which which would be the only satisfactory test.

Advanced Phthisis.—Almost identical.

Lumbago and Rheumatism. —A cold snap of weather —sudden attack—workman absolutely certain caused by strain the day before. Hernia or Rupture.—One of the most common of complaints. I believe it myself to be hereditary or at least there is strong hereditary predisposition. I know of a family of three generations and another of three brothers all of whom suffered. Since the incidence of the Act operations have become very prevalent and invariably it is made a claim as result of accident. In labour!ous occupations the disease is very prevalent. The effect of these cases should they be held to be claims under the Workers’ Compensation Act will be i that employers must if they desire j moderate rates, insist upon a strin- ! gent medical examination of every j man employed, and the rejection oi j all those who are shown to be | physically unfit. Certainly no employer should neglect under the circumstances some ordinary care to see that the employees are at least in_ good health, and should so advise his indemnifier, and his rate might then be reduced. Another matter that needs amending is this : —A man claims to have met with an accident and is entitled to, say, 20 weeks’ compensation at £1 per week. He is dissatisfied with this and under the advice of a smart solicitor serves a writ for damages to the extent of £IOOO under Common Law, and (or) £SOO under the E.L. Counts. He (the lawyer) is perfectly aware that the man has no possible chance of succeeding under these counts, but the costs between solicitor and client and costs of Court to defend will amount to considerably over £IOO. Then the employer is informed that a settlement will be accepted without prejudice of say £IOO. If this is not accepted, his client, being a man oi straw, will not be able to pay any of the costs, and after having forced the employer into heavy costs as above, a verdict will be given in favour oi the employer. The plaintiff’s solicitor immediately moves the Judge to assess the damages as tliough it haa been properly brought under the Compensation Act before the Arbitration Court., after deducting such costs as he thinks proper. But although the employee can do this there is no power by which the employer can appeal that the case may be first heard in the Arbitration Court, where the costs are much Jower, nor can he apply for security of costs. Such a case as above is by no means a fancy on£. I have had several to deal with, and I regret to say that Champerty is not at all unknown in this colony. Fortunately it is restricted to a few solicitors only, but surely the employers should be allowed some such relief as that mentioned above. Some very strange claims are made at times both by employers and employees. For example, a small employer in a country town wrote me that an employee of his and in his employment (mark the legal language) had broken his. leg. I acknowledged receipt of notice and asked for further information. Upon receipt of same it appeared that the injured man had been having a friendly boxing match during his dinner hour. In several instances a football

match was the cause of similir dents whilst I have *£*** several cases when accident ° ! curring whilst on a Saturday spree in town by country *2s* has been endeavoured to be° l construed as an accident incurSi winlst in the course of einplojSJ because the employee had been -D quested by the employer to poVt letter on his way in or to bring It a tin of lollies on the way back 1 Taking claims generally i n ’ K „_ Zealand since the inception of Act in June. 1901. they appear to occur very regularly in certain trade, more especially j n timber stev£ doring, dredging and carrying. In v the past 14 months I have been notified of 48 deaths. Dee “ Loss of eyes has been an epidemic. I have had no less than 9 cases with? in the last few months. “* In conclusion. I regret to say that at the present time as regards these classes of insurance; rates are at such an absolutely low level (thev were of course purely experimental and have been so reduced that in my opinion nothing but very heavy loss can accrue. Yet one cannot recommend merely heavy increase on the employer’s rate. What would be far better would be a return to the bidfashioned Workmen’s Insurance* whereby the workman subscribed some few pence a week and i a return was insured by his employer through an Insurance Company for half wages and certain fevers', the protection extending not only to the time he was actually in the course oi the employment but to the whole twenty-four hours. This always prevented friction, but owing to some alleged isolated cases of employers deducting more than the actual amount charged and also probably to prevent the pauperising of the workers by permitting them to pay something for the benefits (?) they would receive a certain Act entitled the ” Wages Protection Act ” was passed prohibiting under pains and penalties any such deduction. It, however, acted very well and was popular with both employer and employee.

It is true that under Clause 14 such a scheme could be used, but it is so hemmed around with conditions, that it is extremely improbable that either the employer, employee or insurer would care to take it up. I regret to say that I have been compelled to .withdraw at least more than half of this paper, originally compiled by me, and dealing with the history of the Acts, because although I knew certain papers on the ” Workers’ Compensation Act ”■ generally were published in the ” Banking and Insurance Record ”• for July last, I only on Sunday last had time to read the very able papers. In that article the matter, was most fully dealt with by Mr F. : Richardson . of the Victorian Institute, and, therefore, perhaps it were best to confine myself to tlio mere local position. 1 cannot refer any of you who desire to get a good idea of the various Acts to a better paper than that of Mr Richardson.