Emergency Management Why it is important liability, loss and the cost of getting it wrong

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Emergency ManagementWhy it is important
liability, loss and the cost of getting it wrong

• Tertiary Sector Health Safety Conference
• Aaron Lloyd
• Partner, Minter Ellison Rudd Watts
• 25 August 2009

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Topics to be covered

• Introduction
• OSH 101
• obligation to manage hazards
• Emergencies
• what is an emergency?
• types of emergencies
• persons possibly effected
• state powers

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Topics to be covered (II)

• Legal Consequences
• OSH investigation and prosecution
• employment action
• private OSH prosecution
• personal grievances
• breach of statutory duty
• ACC and personal injury
• tort claims
• an act of God defence?

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Topics to be covered (III)

• Non-Legal Consequences
• asset loss or damage
• loss of access to site/use of premises
• loss of human capital
• reputational loss

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Introduction
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Occupational Health and Safety 101

• Employers obligations in respect of common place
  or usual work hazards are well understood
• Health and Safety in Employment Act 1992
• broader than just employers of course
• employers, principals, controller of a workplace,
  employees and self-employed
• Key obligation
• to take all practicable steps to ensure people
  are not harmed

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Obligation to manage hazards

• Four key steps to hazard identification and
  management
• identify the hazard
• assess the hazard
• control the hazard
• eliminate
• isolate
• minimise
• ongoing monitoring of the hazard
• Hazards can be environmental, anthropological, or
  introduced

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Emergencies
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What is an emergency?

• Definitions of emergency often depends upon the
  context
• Civil Defence Emergency Management Act 2002 talks
  of a situation whether natural or otherwise which
  causes or may cause loss of life, illness,
  injury, distress or in any way endangers the
  safety of the public or property and which cannot
  be dealt with by emergency services
• Our definition
• an event of danger or conflict
• affecting either persons or property
• which occurs suddenly and unexpectedly, and
• which requires urgent action

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Types of emergencies

• Five broad categories
• emergencies as a result of a natural disaster
• health related emergencies
• eg. pandemic
• emergencies arising from criminal behaviour
• eg. terrorism, hostage taking
• emergencies arising from the nature of the
  organisation
• eg. chemical spills, explosions, crowd related
  events
• emergencies arising from a third-party breach of
  duty
• eg. external chemical spill, vehicle building
  incident

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Person possibly effected

• Persons potentially effected by an emergency on
  campus include
• employees
• contractors
• students
• visitors
• businesses on campus
• owners and occupiers of neighbouring premises
• other persons or businesses in the vicinity

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State powers

• If an emergency is significant enough, then the
  state may exercise certain powers to take control
  over a situation
• The Police are empowered to deal with any
  situation where criminal offending is ongoing and
  where they elect to investigate an event
• There are significant powers also under the Civil
  Defence and Emergency Management Act 2002 and the
  Health Act 1956

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State powers (II)

• Some of these powers include to
• shut down a place of work
• implement an on-site quarantine
• order an evacuation
• obtain entry and/or information
• close roads and/or other public places
• requisition items of property, including
  buildings, vehicles, animals, boats, apparatus,
  food and medicines
• direct a property owner to stop an activity or
  take a required activity
• In many cases, failure to comply is an offence,
  punishable by fines and/or imprisonment

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Legal Consequences
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OSH investigation and prosecution

• Health and Safety in Employment Act 1992
• Investigations are done by the Department and/or
  by the Police (particularly in the case of
  criminal offending and/or fatality)
• Section 49 knowingly failed to comply fines
  of up to 500,000 or up to two years imprisonment
• Section 50 other breaches of the Act fines of
  up to 250,000
• The recent case of Hanham Philp Contractors
  suggests that fines are on the rise
• 50,000 low entry (under section 50)
• 50 100k medium entry
• 100k high culpability
• Individuals also liable to conviction under the
  Crimes Act 1961, particularly for manslaughter,
  in certain cases

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Employment action

• Employees can take legal action against their
  employer for alleged breaches of the Health and
  Safety in Employment Act 1992
• private prosecution for a breach of the Act
  (rare)
• personal grievance
• unjustifiable dismissal (either constructive or
  actual)
• unjustified disadvantage
• breach of statutory duty
• In certain circumstances, employees may also take
  action for breach of contract, breach of
  obligations under the Employment Relations Act
  2000 or for discrimination

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ACC and personal injury

• Generally, injury arising out of an emergency
  will be covered by the ACC scheme
• Current legislation is the Injury Prevention,
  Rehabilitation and Compensation Act 2001
• Section 37 of that act prohibits suite for
  personal injury covered by the act
• However, there are some exceptions, most notably
• claims for exemplary damages, and
• claims in relation to nervous shock

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Tort claims

• Many legal claims will be bared by virtue of
  section 37
• However, claims in relation to damage to
  property, as opposed to relating to personal
  injury, are not barred
• Negligence and nuisance are two claims in tort
  which can be taken against and organisation when
  loss arises which is not covered by section 37
• Negligence
• loss arising from a breach of a duty of care
• Nuisance
• loss or damage from something escaping or
  effecting someone else's property

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An act of God defence?

• Is there an act of God/not my fault defence in
  these cases?
• In most, if not all situations, a complete lack
  of fault will protect an organisation from a
  claim, but that is an extremely high threshold to
  meet
• Where an emergency, or the consequences of an
  emergency are foreseeable, and the organisation
  has failed to implement a plan to deal with that
  risk, then the organisation will be at fault
• circumstances in which no human foresight can
  provide against, and of which human prudence is
  not bound to recognise the possibility, and which
  when they do occur, therefore, are calamities
  that do not involve the obligation of paying for
  the consequences which may result from them
• Tennent v Earl of Glasgow (1864)
• Definition of an act of God

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Non-legal Consequences
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Asset loss or damage/loss of access

• Damage or complete destruction of property is a
  foreseeable consequence of an emergency
• Whilst insurable, such loss creates significant
  administrative problems, and oftentimes some
  level of additional financial cost
• Even where buildings are not damaged, ongoing
  investigations may mean that a site is unable to
  be used for a considerable period of time
• In all such circumstances the organisation is
  going to be unable to use its land and building
  resources

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Loss of human capital

• Injury, serious injury and death all result in an
  organisation losing valuable human capital
• In many incidences, the initial emergency is not
  what causes these, rather it is the
  post-emergency events
• Good management can limit the impact of
  post-emergency effects
• Employees who are mentally harmed, or who feel
  the organisation did not do enough to protect
  them and their colleagues, can leave also
• Loss of trust and confidence in the employer to
  provide a healthy and safe place of work

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Reputational loss

• Tertiary organisations are entrusted with the
  care and education of one of the nations most
  precious resources its talent
• They need community and state support, and need
  to attract domestic and international students
  and world class researchers and teachers
• Media scrutiny is common
• A poor response to an emergency can severely
  damage an organisations reputation, leading to a
  loss of prestige, business and funding

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Conclusions

• A prudent organisation will ensure that it has
  comprehensive and effective emergency management
  and business continuity plans in place
• A failure to do so can have catastrophic
  consequences
• reputations can be destroyed
• staff may be killed, injured, or leave
• the organisation might be prosecuted
• lawsuits might flow
• the organisation can be severely interrupted in
  it operations
• Emergencies, in many cases, cannot be avoided,
  but the severe effects they bring can be

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Questions/Contact Details
Aaron Lloyd Partner Minter Ellison Rudd
Watts Tel [phone] Email
aaron.lloyd_at_minterellison.co.nz Web
www.minterellison.co.nz