Public Liability - Exposure to Litigation

Public Liability is a legal term that Elite-ID Electronic Systems is not qualified to define.

However, in our own words and for our limited purposes, we can term public liability as "the duty of care owed to the public".

In reality - this defines the exposure a company has to litigation when an "event" (such as a slip or trip) happens in a public place that is under their care. In other words - their liability to the public - their duty to the public.

Public liability insurance is used to protect the insured against legal action initiated by members of the public or their representatives in the case of a class action.

   

Duty Of Care - A Responsibility to Staff & the Public

For our purposes and in a public liability sense, the phrase "Duty of Care" relates to the responsibilities of a company to exercise care and attention in managing and maintaining a facility in a fit and proper state.

In other words and for example - a company owning or managing a public place such as a shopping centre has a "moral" or "ethical" requirement to ensure that it is fit for occupation, that there are no hazards, that the place is in fact safe for the public.

Duty of care can also be a "fit for purpose clause" - meaning that members of the public have reasonable expectation as to their safety and protection. Duty of care applies to the effort and diligence in ensuring that safety.

Again: A person entering that place has an expectation as to its safety, and from that has legal rights and protections. Here, the duty of care is evidenced by the effort and cost that goes into keeping it clean and safe.

   

Negligence - Failure to Meet Legal Obligations

To be accused of, and have proven - that a company has been "negligent" - is one of the worst things that can happen (in a public liability setting)!

The reason is that "negligence" allows a court action / civil litigation action to claim punitive damages against a company, if it can be shown that the negligence of the company was a contributing factor to a real loss or damage.

From a work place safety point of view - it can lead to criminal prosecution. For example - a death arising from a negligent act by an employer can easily result in a charge of manslaughter against the company directors personally.

Additionally, an insurance company may decide to not honour a claim against it, if the insured is found to have been negligent. In other words - the insurance is only valid if the insured is seen to have taken every best action to have prevented a claim and thereby reduce the risk.

There is the very real possibility that insurance companies will require a form of "verification of diligence" before they will honour insurance policies. They will want to know what has been done to reduce the risk - in other words - they are requiring proof of diligence by the insured.

The reason for this is quite simple - the number of claims and the size of pay-outs are reducing the profitability of public liability insurance for the insurers.

In context - "negligence" refers to a situation where a company does not meet its obligations to provide a safe environment for the public.

Examples are;

• Not keeping an area clean - thereby increasing the risk of slip and trip accidents



• Not servicing equipment that is used to preserve life and/or prevent serious accidents - fire extinguisher maintenance for example



• Not providing adequate security - thereby allowing "undesirables" to enter and increase the risk violence etc. - gangs of youths in shopping centres



• Not maintaining an area, such as a path, so that tripping becomes a significant risk because of pavement cracking
  
  
• Not maintaining an air conditioning system such that dangerous virus and bacteria can breed

There are many more areas where negligence can be considered to be a contributing factor to risk and the impact of public liability claims and insurance.

The Elite System can help. It can be used to show that a contractor is providing a service, that the contractor has attended a location, that a contractor has in fact lived up to contractual requirements.

With this information - proving "negligence" becomes more difficult (hopefully!) since there is hard-copy and definite evidence about the performance of duties.

   

Due Diligence Documents and Risk Management Plans

For example: when a company spends a significant amount of money on purchasing something, or makes some significant change to its operation, in many cases there is a "due diligence" exercise done. It may not be called that - it may be called something else entirely - however the end result is the same.

"Due Diligence" (study) is an analysis of the effects of a proposed action, an investigation into causes and effects. In other words - a rigorous examination and testing before action is taken. This is often called "due diligence".

There is no reason why the area of public liability should be any different. In fact - most, if not all major companies, are demanding that all their operational areas have a "risk management plan" - and that it forms the basis for their operation. In reality - this can be considered to be a formalized due diligence document - examining and detailing specific events and remedial actions, outlining procedures and methods.

This is where the Elite System can help. The Elite System can be used to provide information about the supply of service by contractors and from that an estimation of risk (or risk assessment) can be made. Reports from the Elite System can be used to inform management of required remedial action, the result of which will be shown on subsequent reports, and from this diligence in managing and maintaining a situation is proven. It is quite possible that the reports can be used as evidence of due diligence - and form a business record of events, such that a company is better protected against claims.