Senior Claims Director, Ernest Foster examines the changing face of people claims
I am often asked to comment on material changes that have occurred in People Claims over the past 40 or so years. Whilst there has been several developments with regard to personal injury claims over this period of time; the question remains whether some of the developments we see today are different from years ago. The answer is probably both yes and no.
We are all too familiar with the tragic events presently unfolding in the Mediterranean Sea, as refugees try to cross over to Europe from North Africa in unseaworthy and unsafe boats. However, this has similar overtures to the Vietnamese boat people of the late 1970's (when after the Vietnam War and especially during 1978-1979 but continuing until the early 1990's, approximately 800,000 boat people arrived safely in other countries seeking refugee/ asylum status). Unfortunately, many boat people failed to survive the passage, facing danger and hardship from pirates, over-crowded boats and storms. For the latter perils substitute today's exodus from North Africa as being fuelled by people smugglers out to make a quick profit from desperate people.
Sadly, another exodus appears to be on the way from Rohingya; Muslims fleeing from Myanmar/Bangladesh and heading for Indonesia, Malaysia and Thailand. Thousands are reported to be stranded in boats after being abandoned by human traffickers.
Cases of piracy off the Coast of Somalia have been well documented in the last 10 years. While this area has recently seen a dramatic decrease in the number of incidents - due to a Combined Task Force establishing a Maritime Security Patrol Area within the Gulf of Aden, and to the employment of armed guards on board merchant ships - attacks continue off the West Coast of Africa, especially in the Gulf of Guinea. It is mainly cargo, especially oil cargoes, which are being targeted by pirates.
However another area which is now beginning to cause concern by way of pirate attacks is the South China Seas, where small oil product tankers of less than 5,000 dwt are targeted. Cargo is being stolen and sold on to local fishermen.
Incidents involving stowaways gaining access to ships have and still continue to cause problems. So not much has changed in this respect. However, attitudes of Immigration Authorities throughout the world have considerably hardened resulting in a general lack of co-operation to document and repatriate stowaways back to their country of origin. Gone are the days when Consular/Embassy officials were prepared to interview a stowaway by telephone, now requiring to interview the stowaway in person. This often results in a Consular official travelling to the ship prior to any emergency travel papers being issued, thus increasing costs all round.
A further worrying development with regard to stowaways, is that at the Port of Ruwais (a town West of Abu Dhabi, U.A.E.) a ship with a stowaway on board was refused permission to berth. Reasons of security were sighted for the actions of the local authorities. This was despite ownersí offering to employ security guards during the period the ship remained on the berth. Disembarkation at the anchorage was also refused and owners were basically instructed to sail the vessel away from Ruwais, landing the stowaway at another port prior to returning to the U.A.E. Obviously, this is a concerning issue and only adds to the difficulties and frustrations encountered when trying to deal with this type of problem.
Over the past several years, one significant change has seen 'People Claims' overtake cargo as the primary expenditure on the Club. Personal injury claims are presently running at approximately 32% of all claims brought to the attention of the Club and between policy years 2004- 2013, this equates to a US $415 million outlay. While it is true the number of claims over the years has decreased, by 40% compared to a decade ago, the average cost of claims continues to increase and is now 20% higher than 5 years ago with people claims costing almost twice what they did a decade ago. For example, a death case is now likely to incur US $100,000 (and often more) in expenditure. But why is this?
Certainly the introduction of Collective Bargaining Agreements (CBAs) has had an impact on the cost of crew claims. Under CBAs, final compensation is based on a sliding scale for disability as well as a set amount in respect of death claims. These figures are based on a crew member's basic wage, which over the years has in itself increased. Advances in the world of medicine have also meant many fatalities of decades ago now result in crew surviving their injuries, thus increasing costs in relation to hospital stay and recovery periods.
Loss Prevention Bulletins as well as our own PEME program have also had an impact in reducing reported claims. Appointed designated clinics for a pre-employment medical examination (PEME) are monitored / audited to maintain the standards expected from them. Fit crew are sent to join a ship with a copy of their medical report and the original Fitness for Duty Certificate, once all medical checks have been performed. If a crewmember is temporarily unfit, then the clinic will advise what the crewmember needs to do in order for them to be declared fit for sea duties. They can then return to the clinic for another test. Over the years this program has proved its worth and continues to do so. It should come as no surprise to find that the majority of personal injuries sustained on-board ship are suffered by crewmembers themselves. Stevedores, surveyors, pilots and passengers also suffer injuries, but not on anything like the same scale. Slips and falls are by far the largest category of accidents, giving rise to personal injury claims; well over a third of these accidents are attributable to the want of care and attention on the part of the injured parties themselves. By their varying nature, ships are dangerous environments and it is absolutely essential that crews do not become complacent of the dangers which confront them. A constant review of safe working practices should be on the agenda of every team meeting and the guidelines for every task planned and undertaken. This is especially relevant in todayís climate, whereby interaction between an ownersí office and ship should be shown to be seamless. To begin to defend unwanted claims, there is a need to show the culture in place between office and ship is as one.
When considering how to approach accident investigations, I often start from the position 'there is no such thing as an accident' and that every accident is avoidable and every contingency can be anticipated if you consider it long enough. This is particularly true in the hostile environment of working on board a ship. Energies should be channelled into establishing what went wrong so that, hopefully, it will not happen again. Safety is now very high on everyoneís agenda, not only due to the most important reason of preventing injuries and death, but to also prevent downtime and loss of revenue, because of its high profile and political nature.
So, what changes will we be seeing regarding People Claims over the next 40 years? Who knows, but be prepared for more of what we have seen in the previous 40 years
The frequency and type of People Claims we encounter has not materially changed during the past 40 years. A 'hit list' drawn up then and now predominantly brings to the surface the same type of events that lead to claims. These are:
Slips and falls
Inadequate footwear, oil or grease deposits on floors, alcohol excess, poorly marked or defective steps, descending steps and ladders the wrong way round, inadequate lighting, inadequate or non existent staging, over-stretching all these make slips and falls the top of the hit list.
Falling object injuries
Spanners in the engine rooms, cargo falling from nets and collapsing booms all feature regularly. The tremendous momentum involved usually make such injuries very serious.
Back problems, hernias and damaged ligaments are all consequences of strains caused by failing to size a job up properly; one man trying to do a job requiring two and by failing to use devices designated to assist with lifting and moving heavy objects can cause this.
Passenger accidents occur so frequently seemingly because of the sense of security generated on board ship. Passengers tend to treat the ship as a hotel, not a means of transport and do not expect to have to adapt their lifestyle at all. Passenger claims also arise from major casualties such as grounding, fire, and other incidents.
Burns, fire and explosion injuries
Carelessness in the galley and chemicals spills are common causes of burns. Electrical faults and engine room incidents lead the way for fire. Hot work and naked lights where explosive mixtures of gas have built up put both the ship and surrounding neighbourhood in peril.
Machinery and equipment injuries
Missing guards, lack of maintenance, over-loading, other abuse, and want of training all make machinery and equipment potentially fatal to their operators; accidents are all too frequent.
Entry to unventilated spaces is a common occurrence. It frequently goes wrong and usually causes multiple fatalities because the urge to rush to the aid of a colleague in distress is so strong.