Let us set the scene: You get injured at work. Your employer becomes liable to you for damages. Then they go bankrupt. And to top it off, your boss never took out insurance.
Not ideal.
That’s exactly what happened to William Campbell who, after injuring his hand at work, raised an action for damages against Peter Gordon Joiners Ltd. His first claim was against the company and his second claim was against the company’s director Peter Gordon.
The case arose from the fact that Mr Gordon’s company was now in liquidation and wasn’t insured against becoming liable to an employee for accidents like Mr Campbell’s. Which goes against section one of the Employers’ Liability (Compulsory Insurance) Act 1969.
Lord Brodie stated that the nature of the employer’s enterprise created certain risks of avoidable injury for the employees. And while the employer should financially shoulder the burden of these risks, the same cannot be said for the company director.
“The company can limit its liability. It can obtain insurance. The company’s officers cannot limit their liability.” Said Lord Brodie.
Agreeing, Lord Malcolm went on to say of the 1969 Act, “There is no mention of any intention or non-intention to make employers and/or officers liable in damages to anyone harmed by an absence of insurance.”
On the other side of the fence, Lord Drummond Young suggested the responsibility to insure rests with the company’s director. And one who consents to, connives in or facilitates a failure to do so should be held liable.
So while not unanimous the company director was not held liable personally for the failure to insure and the employee lost out
However you feel about this, it’s clearly essential to know whether your company is insured against the necessary risks at your place of work.
Johnson Legal are Edinburgh’s experts in such matters and are always on hand to answer your questions. If you’re facing a similar situation or you’d just like to know the facts about issues like this, get in touch today.