Insurers’ Indirect Exposure to CoDaM Liability

These can be broadly summarised as an obligation to take reasonable steps to arrange for the management of the project, so that construction work can be carried out without risk to the health or safety of individuals, and that any structure designed for use as a workplace has been designed in accordance with the 1992 Workplace (Health Safety and Welfare) Regulations; these reasonable steps will include an obligation to ensure that the arrangements are maintained and reviewed throughout the project. The Client must also ensure every designer and contractor is promptly provided with pre-construction information which is within the Client’s possession (or reasonably obtainable) about the site or construction work, about the use of the site as a workplace, the minimum amount of time before construction which will be allowed to contractors for planning and preparation, and any information on the existing health & safety file.

The Client’s additional duties – Clauses 14 to 17

Clauses 14 to 17 of the Regulations deal with the Client’s additional duties when a project is notifiable (construction work lasting longer than 30 days or involving 500 person days of work). These are, again in summary, to appoint a CDM Co-Ordinator and a Principal Contractor, to provide relevant information to the Co-Ordinator, to ensure that the construction phase does not start until the principal contractor’s pre-construction obligations have been satisfied, and to ensure that the health & safety file is provided, is kept up to date and remains available to whoever might reasonably require it to comply with their statutory obligations.

How can an Insurer minimise its exposure?

The key would appear to be the taking of reasonable steps, and an overriding obligation on all parties to co-operate with one another, in respect of their various, inter-relating tasks and responsibilities. What then are the reasonable and sensible steps that an Insurer might take to minimise its exposure?

Firstly, (and this perhaps goes against the spirit of safe systems being the primary consideration) an Insurer who is aware of the potential for being held responsible, could see to it that another party is the one that elects in writing to
be “the Client” under the Regulations. Thereafter it would be that party who bears the Client responsibilities under the Regulations.

Next, if Insurers are authorising and involved in remedial work, appointments to the project of the key members referred to above, should be made as soon as possible. In that connection it would be prudent to have a list of preferred contractors and consultants with whom Insurers have experience of having worked successfully and who are known to appreciate and comply with their health & safety obligations. Standard agreed appointment terms, requiring each to confirm their fitness to comply with the Regulations, would be recommended. The right people should be appointed in the right way and at the right time. This will be necessary in order to be able to demonstrate that the relevant folk were in place to take part in all relevant discussions concerning construction, use and maintenance of the building.

As regards communication, Insurers should satisfy themselves that a proper management structure is in place (again this could be done by a suitable wording in the instructions) which will include passing on key information to the Construction Team and frequent inter-action between the members of the Design Team.

Before commencement of any work on site is permitted, Insurers should be satisfied that the principal contractor has produced a health and safety plan. At the end of the construction phase, the CDM Co-Ordinator will produce for the Client the Health & Safety file, and Insurers should satisfy themselves that this is safely retained and kept up to date.

Legal advice is very often not to involve oneself in areas which might not concern one for fear of creating a legal liability that would otherwise not exist. Where health & safety issues are concerned this advice has obviously got to be tempered with other considerations, about the morality of “turning a blind eye” where one might otherwise be able to prevent people from being injured or killed. And, as discussed above, one might after all have an exposure given the wide definition of the party commissioning the construction work. The CDM Regulations do not require a Client physically to supervise the activities of other parties. It is sufficient to demonstrate an awareness of the Regulations and to take sensible, considered steps to see that the other parties responsible under the CDM Regulations are doing what they are supposed to be doing. That way Insurers have given the projects with which they are “involved” the best chance of being completed safely and efficiently, and at the same time, they will have given themselves the best chance of seeing off any criminal challenge in the unfortunate event of there being a breach of Regulations and of Insurers unexpectedly facing direct exposure under the 2007 Regulations.

Mark Klimt
Fishburns solicitors