Workmen's Compensation Common Law Remedies and The Beveridge Report
| DOI | http://doi.org/10.1111/j.1468-2230.1944.tb00966.x |
| Published date | 01 April 1944 |
| Author | A. Russell‐Jones |
| Date | 01 April 1944 |
WORKMEN'S COMPENSATION
13
criminal law has, quite definitely, to play an important part in the matter,
but
it
cannot fulfil its task unaided. A good deal of the failure of the
Sherman Act has been due,
it
seems, to two legislative mistakes; first,
to the placing of an over-great burden on the criminal sections of the
statute and, secondly, to the absence of any organic link between them and
the existing civil and administrative machinery. As already pointed out,
the extreme vagueness and elasticity of the Sherman Act is inevitable for
the sake
of
efficiency, but
it
has made the Act much too difficult to admin-
ister
as
a
criminal statute. Again, the Clayton Act
is
more specific, but
there
is
no
penal machinery behind
it
or behind the Federal Trade Com-
mission Act. The best solution would seem to be
a
combination between
the administrative procedure of these two Acts and the possibility to
impose heavy penalties in suitable cases. As these penalties would have
to be decided upon by Criminal Courts, the old problem would arise of
how far the latter should be bound by statements of fact arrived at by
administrative agencies.
If
the Courts would be called upon to punish
what an administrative body has branded as
"
unreasonable restraint of
trade," they would rebel and insist upon independent powers of control
which would frustrate the scheme. If, however, the actions to be punished
would consist mainly in technicalities, the problem would be manageable.
It
is
probably for such reasons that the suggestion has been made to devise
a
system which would require the fullest publicity for all business activities
of trusts. Any failure would involve heavy, if necessary even crippling
penalties." While this would facilitate the task
of
the administrative
agency charged with the supervision of trusts,
it
would leave to the
Criminal Courts mainly technical questions which would be easier to deal
with. The need for publicity has recently been admitted even by business
leaders. There will
be
much dispute about its extent. The general line of
policy, however, seems to be fairly obvious as far as the division of powers
between administrative and criminal procedure
is
concerned.
It
is
a
division which, by the way, is becoming more and more common and to
which may belong the future.7a HERMANN
MANNREIM.
WORKMEN'S COMPENSATION
COMMON LAW REMEDIES AND THE
BEVERIDGE REPORT
I.
THE
BEVERIDGE
REPORT
AND
WORKMEN'S
COMPENSATION
HE proposals of the Beveridge Report on Workmen's Compensation
have received surprisingly little attention beyond some early broad-
sides from the batteries of certain interested parties who were
opposed, under any circumstances, to the inclusion of workmen's com-
pensation in
a
comprehensive scheme of social insurance. There has also
not been as much reaction as might have been expected from organised
labour to proposals which involve a contribution from the worker, though
See Handler,
op. cit.,
pp.
gz
ct
scq.
In order
to
prevcnt the iinposition
of
obstructively
low
penalties, statutory minima may have to
be
resorted
7f
Other
instances
of
this
general
trend
and
the
special problenis arising
from
it
will
be
discussed
in
other parts
of
the
book.
T
14
MODERN
LAW
REVIEW
April,
1944
it
was
always understood that such a proposal was not regarded with
much favour in that quarter.
It
may be
it
is
now considered that the
advantages of a comprehensive scheme of social insurance, covered by a
composite weekly payment, outweigh the objections
to
the workman
making contributions to the insurance fund.
Workmen’s compensation
is
a highly specialised branch of industrial
law and though circumstances arising from the war have focussed public
attention on certain aspects of the present system, it remains, from an
administrative point of view, a matter for the expert.
Whatever may be the fate of the proposals in the Beveridge Report,
it is worth while considering such proposals and some of the implications
and possibilities which arise, because
it
seems to be generally accepted
that the present patchwork of legislation and case law which make up
the “system” as we know it to-day requires an early and drastic overhaul.
Part
I1
of
the Report sets out
the
changes involved in the establishment
of unified social security. Change No.
4
proposes the supersession
of
the
present scheme of workmen’s compensation and the inclusion of provision
for industrial accident or disease within the unified social insurance scheme,
subject to
(a)
a
special method of meeting the cost of this provision, and
(b)
special pensions for prolonged disability and grants to dependants in
cases of death due to such causes.
As
regards benefit, the proposals are that for the first
13
weeks of
incapacity, payment shall be made at the same flat rates irrespective of
earnings on the suggested scale in Par.
401;
after the first
13
weeks of
disability compensation to be paid on a different principle taking into
account the earnings that have been lost
:
there
will
be industrial pensions
for prolonged incapacity due to accident or disease arising out of and in
the course of employment. There will be industrial grants for dependants,
in addition to the general widowhood provisions, where death results from
such accident or disease. Benefit will be paid forthwith, because as a
rule there will be no necessity to ascertain the cause of disability before
making payment, the ascertainment of the cause of disability will make
a practical difference only where disability lasts more than
13
weeks
when the compensation has to be adjusted to earnings. Any question
arising in regard to the assessment of compensation where the disability
lasts over
13
weeks can be adjusted by administrative machinery subject
to appeal to special tribunals in the place of litigation.
All the other benefits of the unified insurance scheme to which an
insured person is entitled will be equally available to a workman disabled
by accident.
The Report postulates that the advantages of unified social insurance
are great and unquestionable and that such unification can only be achieved
by certain changes in the existing administrative machinery. The argu-
ments in favour of change No.
4
are set out in Paras.
77-105
of the Report.
It
is very fairly stated that the present system of workmen’s compensation
has conferred benefits and has certain merits, and that if the author of
the Report has come to theconclusion that the system should be superseded
in a unified plan for Social Security, this conclusion rests not on a denial
of
any good in the present system but on the possibility
of
replacing it by
a better system. “Neither in this, nor in any other field, should the good
be allowed to be the enemy of the better.” While not conceding that the
present system deserves the qualifying adjective of “good,” we are only
too ready to agree that it can be replaced by a better.
WORKMEN’S COMPENSATION
15
There are few people to-day with practical experience of workmen’s
compensation who,
if
they approach the subject with the same singleness
of mind
as
the author of the report, will deny that the present system
is
unsatisfactory and
that
it
can
be
replaced by
a
better, even though they
may demur from the conclusion that the better way is the way recom-
mended by the Report.
Much time and paper could
be
used up on
a
detailed account of the
disadvantages of the present system
;
the insufficiency of the compensation
payable, particularly
in
the case of injured workmen with families de-
pendent
upon
them; delays in payment; the compficated system
of
dealing with industrial disease
;
the absence of any scheme for rehabilita-
tion
;
the assessment of average weekly eahngs
;
lump sum settlements
and the employer’s right of redemption
;
the existence of vested interests
essentially incompatible with the interests of the injured workman for
whose benefit alone the scheme exists; excessive and unnecessary litiga-
tion
;
the absence of provision for medical treatment and surgical appli-
ances. But
is
such a detailed account necessary?’ The main disadvantage
of the system
is
fundamental, the defects are only the inevitable conse-
quences of that fundamental defect which we contend
is
the employer’s
personal liability to
his
workman for payment of compensation.
11.
DEVELOPMENT
OF
WORKMEN’S COMPENSATION
The present “system” of workmen’s compensation is contained in
a
large number of statutes interpreted by a considerable body of case law.
Up to date there are
37
volumes of Butterworth’s compensation cmes
and the Statute Law consists
of-
I.
The Workmen’s Compensation Act of
1923
amending the Act
of
2.
The Workmen’s Compensation Act,
1925-
Consolidating Act.
3.
An
Amending Act of
1926.
4.
The Workmen’s Compensation (Silicosis and Asbestosis) Act,
1930.
5.
An
Amending Act of
1931.
6.
The Adoption of Children (Workmen’s Cornpensation) Act,
1934.
7.
The Workmen’s Compensation (Coal Mines) Act,
1934.
8.
An
Amending Act of
1938.
9.
Workmen’s Compensation Act,
1940.
10.
Workmeds Compensation Act,
1943.
11.
Workmen’s Compensation Act,
1943
(No.
2).
Add
to
these the various schemes dealing with Industrial Diseases
and in particular those relating to Silicosis and Asbestosis and it
will
be
realised
that the present “system”
is
at
least lacking
in
the virtue of
simplicity.
It
may be argued that the last three Acts became necessary
because of conditions arising from the war, but surely the fact that
it
is
necessary to
pass
three Acts of Parliament
to
amend the system in an
emergency,
is
proof that the system is too rigid to deal with such a complex
of problems
as
arises in the field of industrial accident and disease. Nor
did these Amending Acts only deal
with
difiiculties arising from the
war.
They also dealt with
ohvious
injustices which organised labour had been
striving for years to have remedied, but which it took a war to get put
right.
For
a detailed
and
careful survey see
Social
Security
(ed.
Robson),
in
particular
Chap.
11.
by
R.
Chambers:
further,
Chambers,
5
MOD.
L.
R.
113,
and,
in
defence of the existing system, Hammond,
ibid.,
p.
113.
1906
and the Acts amending that Act.
16
MODERN
LAW
REVIEW
April,
1944
It
will be admitted that the basic aim of any Workmen’s Compensation
system is to provide an adequate measure of compensation for workmen
and their dependants for injuries received at work. That is elementary,
but there is a danger of forgetting the basic purpose where organised
interests have become an integral part of the system, for example, the
interests of the legal profession, the medical profession, and the insurance
companies. These interests should be disregarded so far as they conflict
with the basic aim of providing
a
simple and adequate scheme of com-
pensation for the injured workman and his dependants.
The existing system is based upon an absolute legal liability which
the law places upon each employer to compensate any employee for loss
of earning capacity due to accident (including industrial disease) arising
out of and
in
the course of his employment. The
first
Workmen’s Com-
pensation Act of
1897
introduced a new principle into English Law by
making an employer legally liable for compensation to an injured workman
irrespective of any negligence on the employer’s part.
As the Holman Gregory Report stated, “The Workmen’s Compensation
Act of
1897
effected a revolution in the branch of law which concerns
relationships between employers and workmen.
It
set up an entirely
new doctrine and provided rights and imposed obligations which nowhere
fitted into the existing scheme of jurisprudence.” There has been no
departure from that basic principle in any of the successive Acts which
have followed up to the present day.
As stated before,
it
is considered by many people who have had prac-
tical experience in the working of the present system that the major
defect of the system is this basic principle which imposes
upon
the employer
a legal liability to compensate his injured workman-a legal right was
given to the workman against his employer, a right which in the last resort
rests in the threat or the practice of litigation. Possibly if our ideas on
social insurance had been more advanced in
1897,
workmen’s compensation
might have been dealt with on the lines of social insurance. There were
those who then advocated a comprehensive scheme of compulsory State
Insurance, but there was strong opposition to the idea. Mr. Asquith, in
the course of a debate in
1893,
stated that-
“. .
.
while a general scheme of insurance against accidents of
all kinds has a great many things to recommend it, yet
it
has
this
great drawback; that it affords no security and no incentive for the
exercise of care on the part of the employer.
A
system of industrial
insurance, unless it is safeguarded by an ancillary law, making the
employer liable-I do not say whether by criminal or civil proceedings
-for accidents due to his own negligence, would be rather a retrograde
than a progressive measure.”
This view also seems to have been
that
of the Trade Unions, because
at the Trade Union Congress in
1877
a proposal for the universal provision
of compensation for all accidents by a fund to be provided by a tax on
commodities was defeated. Thomas Halliday, a miners’ leader, said that
“what they wanted was not money but their lives and limbs preserved”
(Wilson and
Levy,
Workmen’s
Compensation,
p.
60).
This conflict between
the preventive and the compensatory aspects of industrial accident is a
live issue in a consideration of .the Beveridge proposals, especially in
regard to the suggestions with regard to the abolition of alternative
remedies, and will be dealt with later in this article. There is little doubt
WORKMEN’S COMPENSATION
17
that the authors of the Act of
1897
hoped that the administration of the
Act would be simple and inexpensive. Mr. Chamberlain said in the course
of the debates that “we should have our words
so
simple that they are
not likely to be the subject of material litigation.” What they would
say to-day
if
they could contemplate the semed ranks of “Butterworths”
must be left to the reader’s imagination! Quite apart from the cost of
this litigation is the undoubted fact that workmen’s compensation has
for many years been an irritating factor in the relationships between
employers and workmen. The injured workman with his right of action
against his employer identifies his employer with every grievance, real
or imagined, which he has, irrespective of the fact that in most cases the
employer has covered his liability by insurance. This leads in many cases
to deep and bitter resentment and has done more to widen the gulf between
the two classes than many people realise.
There have been various opportunities of revising the system.
A
Departmental Committee set up by the Home Secretary in
1903,
in their
conclusions, stated that-
“Many witnesses have suggested that some system of national
insurance should
be
established which would relieve the employers
from all personal liability except that of providing the necessary funds.
Any such proposal would require and will doubtless receive the fullest
consideration from the legislature.
It
may be that the State should
establish or regulate a system of insurance which would provide for
every employer and for every workman complete security.
It
may
be that a State policy might protect the employer from all personal
liability except the payment of the premium.
It
may be that ultimately
some form of compulsion might be adopted requiring all employers
to insure their workmen in some association under State regulations.
It
may be that under such a system, larger benefits than those given
by the present Act might be provided for, but in that case
it
would
follow that some contribution proportionate to the increase of benefit
shodld
be
made by the workman to the insurance fund. These and
similar questions are in prospect. But
it
would be premature and beyond
our
commission
to
discuss them. We can only indicate that, beneficial
as we believe the legislation
of
1897
to have been on the whole, we
do
not think it can be regarded otherwise than as a step in the direction
of a more comprehensive scheme.”
How
near the Committee came to the same conclusions as those em-
bodied in Change
No.
4
will be appreciated by a comparison of this state-
ment with
the
proposals
of
the Report. But
it
was “beyond their com-
mission to discuss
”
the possibilities which they evidently regarded with
some favour and they contented themselves with the indication that the
goal was a comprehensive scheme involving “may
be”
the abolition of
the personal liability of the employer. The result of the findings of the
Committee was the Workmen’s Compensation Act of
1906,
which did
not depart from the basic principle of the employer’s personal liability
but extended the scope of the law, increased the amounts of compensation
payable, and enlarged the legal rights of the injured workman. The second
opportunity came when the Holman Gregory Committee was appointed
in
1920.
This Committee did have in its terms of reference the investigation
of a system of accident insurance under the control and supervision of the
State.
It
will be borne in mind that at this date a State scheme of insurance
2-1
&
2
T8
MODERN LAW REVIEW
April,
1944
against sickness had been in operation since
1911
and against unemploy-
ment since
1919,
so
that the Committee had no reason to
be
unduly
apprehensive of the bogey
of
State interference, though they certainly had
to
take into account the well-eskblished interests of the commercial
insurance companies which would
be
in danger from any State scheme.
Again this Committee decided to adhere to the basic principle of the
1897
Act. They evidently did not regard that Act in the same light
as
the
1903
Committee
as
“a step in the direction
of
a more comprehensive
scheme,” because their decision was that “the present system should
continue.”
It
is true they recommended compulsory insurance, but only
within the framework of private insurance. One cannot do better than
quote this comment on the findings of the Holman Gregory Committee
in Wilson and
Levy’s
Workmen’s
Compensation
(p.
225)-
“
The Committee’s almost cynical dictum ‘The present system to
continue’ was printed side by side with irrefragable proof as to the
need of radical changes in a system which the Committee proposed
to perpetuate.
.
.
.
The Committee was unanimous in rejecting State
interference, which might take the administration of Workmen’s
Compensation out of the hands of private intdrests and subject
it
to
the supervision and control of the State. But the reforms which
it
sponsored involved State intervention without State responsibility for
its consequences. Had the experience of the past forty years justified
this ambiguous attitude on the part of the Committee
?
We have tried
to show that this question must be answered in the negative. The
evidence not only of the representatives of the Labour party but of
many other witnesses with no political affiliations gave a very disquiet-
ing picture of deficiencies and evils. The main grievance had remained.
Insurance companies and mutual associations alike were trying eagerly
to rid themselves either totally or partially of the claims which might
be or actually were put forward in connexion with accidents. In
other countries official or quasi-official bodies were intervening im-
partially between the employer and the workman. In England a third
party, namely the insurance offices, had been set up between employer
and employed, whose business
it
was
to
relieve the former
of
his
responsibility towards the latter in cases of injury, and to do
so
on a
competitive profit-making basis.
”
“Irrefragable proof of the need for radical changes” were before the
Commission, but no radical changes resulted.
“
Insurance companies and
mutual associations alike trying eagerly to rid themselves of the claims
which might be or actually were, put forward in connexion with accidents”
-words as true to-day as they were in
1920.
However strongly one may
feel about this problem of insurance against industrial accidents on
a
profit-making basis, no blame can be attached to the companies themselves,
in fact,
it
is
obvious that the system could not have worked without them.
They are not philanthropic concerns and
it
would
be
hypocrisy to blame
them for conducting their business as‘ they have done. But that is no
reason why this state of things should continue.
An Amending Act followed the Commission in
1923,
adhering to the
recommendation that the system should continue, though the proposal
for compulsory insurance was rejeCted. The number of workers entitled
to the benefits
of
the Act was increased, there were bigger rates of com-
pensation, the requirements as to notice of accident and the claim for
WORKMEN’S
COMPENSATION
19
compensation were simplified, the rights of the employer to reduce and
terminate the compensation were restricted and there was an endeavour
to improve, without substantially altering, the position as to lump sum
settlements. But
fio
attempt was made to deal with the fundamental
defect of the system, with the inevitable result that litigation flourished
and more amending legislation was required. To-day no one
is
satisfied
with the system in spite of all the patching and tinkering.
It
is, and will
remain,
a
source of grievance until we get
a
Government courageous
enough to disregard all vested interests, in whatever quarter they exist, and
translate the “may
be’s’’
of the
1903
Committee into established facts.
Once more opportunity knocks at the door.
It
would
be
a
tragedy
if
the door remained bolted and barred.
111.
ALTERNATIVE REMEDIES
IN
COMMON
LAW
Prior to the Employers’ Liability Act of
1880
the injured workman
had only his Common Law remedy against
his
employer and that
was
grievously restricted by the doctrine of Common Employment,
a
doctrine
based on
a
judicially implied contract between workman and employer,
a doctrine which Mr. Asquith described as “fictitious,” for “The Common
Law of this country does not, as a rule, imply contracts which are not
expressed.’I2 However that may be, the rule operated
so
greatly to the
disadvantage of the workman that Parliament passed the Employers’
Liability Act, which endeavoured
to
mitigate the seventy of its application,
but went no further, and the Common Law remedy for negligence remained
the workman’s chief remedy against his employer for injuries resulting
from an accident at work until the Workmen’s Compensation Act was
passed in
1897.
This Act and the successive Workmen’s Compensation
Acts, while leaving the workman his Common Law rights against his
employer as an alternative remedy, gave him a new right of action against
his employer, irrespective of negligence. The injured workman therefore
naturally turned from the restricted Common Law remedy to the wider
remedy granted to him. Claims under the Employers’ Liability Act and
at Common Law became rare as compared with the claims under the new
system until recent years, when as a result of legal decisions and of Factory
legislation, a new impetus was given to Common Law claims.
In
Groves
v.
Wimbovne,
(1898)
2
Q.B.
401,
it
was held that the occupier
of a factory who omits to fence dangerous machinery, or to provide and
maintain proper appliances of every description,
is
also guilty of negligence,
and a Common Law action for damages will lie against him
at
the suit
of
an injured workman and that to such an action the doctrine of common
employment was no defence. The passing of the Factory Act of
1937,
which imposed more stringent statutory obligations upon the employer
in regard to the safety of the workman, considerably widened the field
for the application of this decision and advantage was taken of
it
by the
legal advisers of injured workmen to put forward Common
Law
claims
in cases where
a
breach of the Act or the regulations could
be
substantiated.
In the same year of
1937,
when the Factory Act was passed, the
decision of the House of Lords in
Wilsons
&
Clyde Coal CO.,
Ltd.
V.
*
This
is
a juristically very dubious proposition;
but
it fightly exposes the
fiction
of
imparting terms appropriate to
a
highly
personal relationship to the
conditions
of
mass employment prevalent in modem industry.
On
the
doctrine
of
common employment,
see
Robson and Gold,
I
MOD.
L.
R.
224;
Unger,
2
MOD.
L.
R.
43
;
Chapman,
2
MOD.
L.
R.
291
;
Winfield, Textbook,
2nd
ed.,
142-156.
MODERN LAW REVIEW ADril.
1944
English,
(1938)
A.C.
57,
still further increased the opportunities of the
injured workman to use his Common Law remedy.*
It
was held that-
I.
Employers are not absolved from their duty to take due care in
the provision of
a
reasonably safe system of working by the appoint-
ment
of
a
competent person to
perform
that duty. Although the
employers might, and in some events were bound to, appoint someone
as
their agent in the discharge of their duty, the employers remained
responsible.
2.
The doctrine of common employment does not apply where
it
is proved that
a
defective system of working has been provided.
To provide
a
proper system of working
is
a
paramount duty and,
if
it
is delegated by the master to another, the master still remains liable.
To
summarise these developments in case law and legislation, three
legal developments, above all, have greatly affected the functioning of
Workmen’s Compensation-
I.
Cases such
as
Groves
v.
Wimborne,
(1898)
2
Q.B.
402,
and the
(a)
A
breach
of
statutory duty
is
presumed to
be
negligence
so
as
to make the proof of actual negligence unnecessary for the
plaintiff and the proof of its absence inadmissibIe for the defendant
;
(a)
Common employment is no defence to such an action.
2.
The Factory Act of
1937,
increasing statutory obligations of
3.
Wilson
&
Clyde
Coal
Co.
v.
English.
(1938)
A.C.
57,
establishing
(a)
Maintenance of
a
safe system
is
a
paramount duty of the
(b)
Common employment
is
no defence to an action for breach
Another factor which influenced the trend towards considering the
alternative remedy
at
common law in cases of industrial accident was-
the compensation payable and the damages recoverable in
a
Common Law
action, which damages included loss of earnings for the period of incapacity,
both past and future, medical and other expenses, and
a
substantial
amount (according to the circumstances) for pain and suffering. The
growth of the number of actions for damages arising out of road accident
cases-many widely reported
in
the Press, had also
a
definite effect on
the minds of the workers. They were not slow to make comparisons and
deductions (the latter often erroneous).
Dissatisfied clients would send in cuttings from newspapers recording
the amount received in
a
road accident case, or in
a
Common Law action
for negligence, asking why
a
lump sum settlement under the Workmen’s
Compensation Act, which they had been advised to accept, was
so
small
in comparison, as indeed
it
was. Consider the case of
a
widow with young
children whose husband was killed
at
work and who was entitled to the
maximum of
k600
under the Act. How could one explain to her the dis-
tinction between her case and that of a widow whose husband was killed
by
a
negligent motorist outside the works’ gate and who got
a
verdict for
LochgelJy
case
(1934),
A.C.
I,
establishing that-
employer towards workmen
re
safety.
that-
employer
;
of such duty.
a
For some recent examples, see below,
p.
21.
WORKMEN'S COMPENSATION
21
L2,500?
One could explain the legal grounds for the difference in the two
amounts
but
one would find
it
hard to give any rational and satisfying
explanation to the widow whose claim was under the Workmen's Com-
pensation Acts.
In cases of non-fatal industrial accidents the financial difference
between compensation and damages
is
not
so
obvious as in fatal cases
(even when the rate of compensation was only 30s.
a
week), especially
in cases where incapacity
is
of uncertain duration. There
is
no certainty
about the amount'of damages recoverable, and when future earning capa-
city
is
in question, the workman's probable future
loss
may easily be
underestimated without any opportunity of correction later. Nevertheless,
it
may be stated as
a
general rule that as between compensation and
damages in any one particular case, the probabilities are that the workman
will benefit fairly substantially by electing to proceed at Common Law,
and there
is
no
doubt that in recent years the proportion of Common Law
claims arising out of industrial accidents has increased very considerably.
The following figures are taken from the records of the Iron and Steel
Trades Confederation, the Trade Union which covers the Iron, Steel and
Tinplate Trades. This union provides legal benefit for their injured
members from the date of the accident, and the figures are taken from the
quarterly reports of cases dealt with on behalf of their members.
Cases Re9orted
1936: 977
1937: 967
1938: 884
1939:
920
=940: 954
1941: 1063
1942: 1301
1943:
1286
Common Law
Claims Made
3
8
18
35
50
70
178
I
It
will be noted that there is a substantial increase in the number of
accidents reported, but this
is
due largely to increased membership of this
vital war industry.
But
even allowing for other factors, the steady increase
in Common Law claims since 1937 would seem to justify the argument
put forward. Of one thing there
is
not the slightest doubt, that every
report of an industrial accident
is
now very closely scrutinised by the
workman's legal advisers to see
if
the facts justify a claim
at
Common Law,
and if there is
a
fair chance of success such a claim is put forward
in
prefer-
ence to a claim for compensation. The reason is obvious-now that there
have been substantial inroads on the application of the doctrine of common
employment and with the stringent requirements of the Factory Act and
Regulations the workman and his advisors (particularly where the workman
has the backing of
a
union) prefer the chances of a successful Common Law
action, with its financial advantages, to the certainty of compensation.
Another House of Lords decision in 1937 should be mentioned here,
because of its bearing
on
the measure of damages in fatal cases. In
Rose
v.
Ford,
(1937)
A.C.
826,
the House
of
Lords considered the position arising
under Section
I
(I)
(2)
of the Law Reform (Miscellaneous Provisions) Act,
1934, where a claim was made for damages for
loss
of expectation of life
by the administrator on behalf of the estate of a deceased person killed
in a motor accident.
It
was held that a living person could claim damages
for such
loss
(Flint
v.
Lovell,
(1935)
I
K.B.
354)-and that such right
22
MODERN LAW REVIEW April,
1944
vested in the deceased in life and, on death, passed to the personal repre-
sentative under Sect.
I
of the Act, that there was no duplication of
damages under the Act and the Fatal Accidents Acts.
It
will be noted
that the Court considered,
so
far as the claim of a living person was con-
cerned, shortening of life was and always had been an item to be taken
into account in the assessment of damages-the novelty
of
the decision
lay in its interpretation of the effect of Sect.
I
of the Law Reform Act.4
But from the point of view of industrial accidents there was not much
value in the decision, because it was further held there was no duplication
of damages.
“If
those who benefit under the Fatal Accidents Act also
benefit under the will or intestacy of the deceased, their damages under
the Act will be abated accordingly” (Lord Atkin, in
Rose
v.
Ford).
This
rule was acted on generally in practice in preference to the alternative
suggestion of Lord Wright, in the same case, that the loss consequent
upon shortening of life
is
reduced by an award under the Fatal Accidents
Act, but it was challenged in the case of
Davies and Another
v.
Powell
Dyflryn Associated Collieries, Ltd.,
(1941)
I
All E.R. 657, the challenge
being based on the wording of sub-sect.
5
of
sect.
I
of the Law Reform
Act, which stated that the rights conferred by the Act are in addition to
and not in derogation of any rights conferred by the Fatal Accidents Act.
Their Lordships held that the matter was purely one of construction of
the subsection and that the view of Lord Atkin in
Rose
v.
Ford
was
the correct one.
So
far as fatal industrial accidents are concerned, it
is
usually found
that where
a
widow and dependants are left, the widow is the adminis-
tratrix of the estate under an intestacy. Claims are therefore made under
both Lord Campbell’s Act and the Law Reform Act.
If
a
settlement is
negotiated the amount recovered is allocated between the respective claims
as is convenient according to the circumstances of the case.
If
a verdict
is obtained from the
Courts
the amount awarded under the Law Reform
Act (which belongs to the estate of the deceased) is
set
off
against the
amount recovered by the dependants in their action under the Lord
Campbell’s Act.
So
far
as
the amount of damages is concerned it is therefore
a
case of “as you were!”6
The amount of damages recoverable for loss of expectation
of
life has
been considerably reduced by the decision
of
the House of Lords in
Benham
v.
Gambling,
(1g41),
I
All E.R. 7.8 The assessment of damages under this
head had been a matter of great difficulty and widely varying amounts
had been arrived at. While no definite ruling was given as to amounts,
Viscount Simon, L.C., stated that “whether
in
the case of
a
child or an
adult a very moderate figure should
be
chosen.”
ID
the particular case
before the Court- claim in respect of
a
child aged two and
a
half years
at
the time
of
its death-it was held that
a
sum of
Lzoo
was the proper
figure. The practical effect of this decision is that in claims under the
Law Reform Act the amount recovered
is
generally somewhere between
A200
and
L300.
But
in
the recent case of
Garcia
v.
Harland
G. Wolfl,
(1943)
2
All
E.R.
477, Atkinson,
J.,
awarded L500 for the death of an electrician
of
27
years of age in good health and happily married.
4
For a full discussion of the various legal aspects, see Seaborne Davies,
2
MOD.
L.
R.
64,
Kahn-Freund,
5
MOD.
L.
R.
81,
Glanville Williams,
5
MOD.
L.
R.
68.
6
For a detailed consideration
of
the different possibilities, see G1. Williams,
5
MOD.
L.
R.
68.
a
On
this decision, cf. Kahn-Freund,
Zoc.
cit.
WORKMEN’S COMPENSATION
23
IV.
REFORM
OF
WORKMEN’S
COMPENSATION
AND
ALTERNATIVE
Assuming that the proposals of the Beveridge Report are accepted and
become law; or that some other system
of
administering Workmen’s
Compensation
is
enacted which,
so
far as benefits are concerned, is as
favourable to the workman
as
the proposals
of
the Report, how
is
the
workman’s alternative remedy at Common Law to be dealt with? Para-
graphs
258-264
of the Report consider this problem in relation to indus-
trial accidents and also in other types of claims against a third party
with which we are
not
concerned in this article. Two questions are pro-
pounded in the Report-
I.
How far should the possible existence of these other rights of
the person in need of income affect his claim under the social insurance
scheme
?
2.
Should the developments now proposed on social insurance be
accompanied by any change of these other rights
?
The report postulates one general principle which no one would chal-
lenge-the possible existence of an alternative remedy should not prevent
an insured person from getting forthwith whatever social security benefits
he would be entitled to claim
if
he had no such remedy.
It
is pointed out
that the testing of an alternative remedy takes time, the needs of the
person should be met at once; the prompt maintenance of income is of
the essence of social security and
it
is
therefore submitted that the power
to refuse sickness benefit to
a
disabled workman should be ended, and
also the requirement that the workman must elect between claiming under
Workmen’s Compensation and claiming at Common Law.
It
is
undoubtedly good business and sound common sense to cover
the gap between the onset of incapacity to earn and the receipt of com-
pensation or damages. The power to close the gap is already there to a
limited extent. Approved societies have the right to make advances by
way
of
loan to members pursuing a claim against their employers for
damages, and this right is widely exercised (National Health Insurance
Act,
1936,
sect.
52).
Many Trade Unions also make voluntary advances to
members in similar circumstances.
As to the question of election between workmen’s compensation and
damages there seems no justification for retaining this if the Common
Law remedy
is
to remain. At present
a
workman can pursue his remedy
at Common Law and reserve his right to compensation
if
he fails in his
claim, but
if
he makes a binding election and takes workmen’s compensation
he
is
barred from pursuing his claim at Common Law. Many workmen have
the advantage of expert assistance through their Trade Unions, but not
all workmen are in this fortunate position. There must be many who
through lack of such advice at the proper time and as
a
result of economic
pressure, accept compensation and lose their Common Law remedy. This
dilemma has been partially solved by a recent agreement with the Insur-
ance Companies, who have undertaken that they will not plead election
by acceptance of compensation
if
proceedings are commenced within
three months. But there seems no valid reason why the requirement
of
election should not be abolished altogether. As
a
workman cannot recover
both compensation and damages, the employer can always obtain repay-
ment
of
compensation already paid out
of
the damages recovered.
This leads on to the second general principle laid down by the Report
REMEDIES
MODERN LAW REVIEW April,
1944
-that the injured person should not have the same need met twice.
Benefit under the scheme should be paid promptly to the injured person
without prejudice to any alternative remedy, but
if
there proves to be
an alternative remedy, he should not get more from the two sources than
he would get from one alone. This could be done in either
of
two ways-
I.
The third party remains liable to pay whatever is due from him
as
if there were no benefit, but the injured person when he receives his
damages refunds to the Social Insurance Fund what he has received
from the Fund as benefit.
2.
The amount of the injured person’s claim against
a
third party
is reduced by whatever he may claim as benefit.
In favour of the first method
it
is argued that there is no reason why
a
person guilty of negligence should pay less than he would otherwise
because the person ihjured is insured against injury; and in favour of
the second method that
if
comprehensive provision is made by the State
for injury, however caused, the damage done to the injured person by the
negligence of the third party is only any excess of the actual loss over the
amount of the State’s provision. The suggestion is then made, which is
followed up later in the report, that insurance provision might exclude
altogether actions for damages in cases where they could be brought now.
The injured workman would then be deprived of his existing alternative
remedy
at
Common Law and left with his rights under the compensation
scheme. The report propounds the question but makes no recommendation.
From the point of view of the workman, much will depend on the provisions
of the scheme under which he is to be compensated for his incapacity.
If
the
benefits are
so
substantial that they compare favourably with what might
be expected to result from the retention of the Common Law remedy, the
argument for its abolition in the case of industrial accidents might be
accepted, but organised labour would certainly want to be satisfied that
the new scheme, whatever its nature, gave the workman adequate con-
sideration for such surrender. Would
it
not be the better way to allow
the Common Law remedy to remain, leaving it to time and experience to
provide the solution?
If
the new scheme proves by such experience in
actual practice to be, by comparison, sufficiently favourable to the work-
man, it is more than likely that the Common Law remedy will gradually fall
out of favour as has been the case with the Employers’ Liability Act of
1880.
A positive argument in favour of retaining the Common Law remedy
is that its existence tends to make employers more vigilant as regards
the safety of their employees, even though they cover their liability by
insurance. Although an employer may be insured against the financial
consequences of any neglect, it is only natural that he should strongly
dislike the prospects of an action for negligence and presumably therefore
in his own interests he would take every precaution to obviate any cause
of such an action.
It
might justly be argued that the good employer will do all he can
for the safety of his employees because he is
a
good employer, and that
the bad employer will continue to take chances without losing
a
night’s
sleep.
It
may also be argued that the distinction between negligence and
strict liability, whether under .Statute or Common Law, is becoming in-
creasingly difficult to maintain.? But the prospect
of
an action for negli-
gence will probably be
a
spur to the good employer to ensure the
fullest
7
Cf.
Friedmann,
I
MOD.
L.
R.
39,
57;
4
MOD.
L.
R.
143
PUBLIC
SERVICE
BOARDS
25
security possible and to act accordingly.
So
far as the bad employer is
concerned,
if
his accident ratio is unduly high, or
if
his records show
frequent cases of liability for breach of Statutory or Common Law duties,
he will find his risk unacceptable to insurers or the rate which is asked for
cover
so
high that he will be forced to amend his ways. This acts as a
kind of unofficial penalty.
There
is
no doubt that whatever scheme
is
adopted with regard to
industrial accident, and whether the Common Law remedy is retained or
abolished, the preventive and compensatory aspects should be comple-
mentary and not conflicting. There should be some provision in any
scheme for penalising the employer who has an excessive number
o€
accidents and the employer whose employee has suffered injury as a
result of negligence.
The Factory Act provides penalties for breaches of the Act and regu-
lations, but
it
is questionable if they are severe enough to act
as
a
deterrent. There
is
really no excuse for failure to comply with the safety
requirements of the Act.
It
took many years to get
it
on the Statute Book
and in the course of
its
passage through Parliament
it
was subjected to
the closest scrutiny.
No
insurance scheme covering the industrial accident
risk will work satisfactorily which does not impose exemplary penalties
on the employer who fails to take adequate precautions for the safety of
those who work for him. This is necessary as much in the interests
of
the
good employer
as
in the interests of the worker.
A.
RUSSELL-
JONES.
PUBLIC SERVICE
BOARDS
HE semi-independent public board or commission has been greeted
as
a
great discovery of the inter-war period. There can be no doubt
of the tendency to resort to
it
for an increasing number of purposes,
some of which are less apparently legitimate than others. Because
it
enshrines something of a compromise between private enterprise and
State control this invention is apt to commend itself as
a
practical meeting
ground between conservative and progressive. Many will perhaps be found
to agree with Lord Reith, who looks forward to its extended use in the
future. They would be wise, however, to pause and consider how solid
are the foundations upon which they built their hopes.
For there
is
some danger of over-emphasising the newness of
this
instrument of administration, and
so
forgetting the lessons of similar
experiments in the past. On the extent to which the Public Service Board
expresses
a
useful discovery in political science, or can claim to be based
upon acceptable principles, those who have given most attention to
its
study are not altogether agreed. Dr. W. A.
Robson
has described this
as
"
the most important innovation in political organisation and consti-
tutional practice which has taken place in this country during the past
twenty years."l But as
Mr.
T. H. O'Brien remarks, after examining the
establishment and operation of the B.B.C., the Central Electricity Board
and the London Passenger Transport Board, in each case the form taken
by these semi-autonomous corporations
"
was due more to accident and
T
W.
A,
Robson
(editor),
Public
Enter@rise
(1937).
p.
359.
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