First published in ITIJ 101, June 2009
In the fast-growing adventure tourism sector, the risk of injury and death is an unfortunate fact of life. Matthew Davies explores the difficulties a UK adventure travel company could face when a participant is injured on an expedition or adventure holiday overseas, and how combined planning by the operator’s insurer and the insured (adventure travel company) could reduce potential future legal complications.
Most liability insurers are familiar with the concept of early intervention or even third party capture as valid claims handling and mitigation processes, but what if the claimant is on the other side of the world? When dealing with an overseas investigation or an overseas coroner’s inquest, operators and insurers who fail to take control of a claim from the outset can damage their prospects of mounting a successful defence. Meanwhile, costs can easily spiral out of control.
Imagine the scenario: an incident occurs on an expedition overseas where a British traveller is injured, perhaps fatally. As the tabloid media get wind of the story, the travel operator is vilified and the usual cycle of ‘more must be done to ensure safety in this sector’ begins to do the rounds. The outrage of the injured party or their family is fuelled by the press coverage, and the risk that a claim will follow will be magnified.
Of course, the number of incidents in the expedition industry is very small and most of the providers in this sector operate excellent safety systems
It is with no little irony that a road traffic accident attracts little media interest, despite the fact that the number of people killed in road traffic collisions worldwide, on a daily basis, equates on average to the equivalent of ten jumbo jets crashing with no survivors. However, as the above example illustrates, public perception can often be based on unsubstantiated facts and wild media reports from unnamed sources that fail to materialise in any official or subsequent investigation. While this is something of an irritant, it has to be taken seriously by operators and insurers. Bad publicity for a tourist destination or operator can cause significant reputational damage for the insured and ultimately, if they fail the adventure travel company’s insurers will not receive premiums from the insured in the future.
If an incident involves a fatality, an inquest will follow. In the example above, upon the body landing back in the UK, the UK coroner into whose jurisdiction the deceased arrives, will open and immediately adjourn an inquest. Often, the UK inquest will be postponed until the outcome of the overseas inquest is know. And here’s the catch. Inquests are not always covered by the tour operators policy or if they are, it is sometimes within the insurer’s discretion to fund the inquest if the outcome (whilst technically, the “verdict” at the inquest should not dealing with the issue of Civil liability) may impact on the Civil Proceedings to follow. The UK Coroner is likely to request a full copy of the file of papers of the overseas Coroner once the overseas inquest has concluded, before conducting the UK inquest.
The problem for insurers is that if they are not directing the proceedings from the earliest possible moment, ensuring that the adventure travel company insured are legally represented at the overseas inquest, problems may arise, from crucial evidence not being preserved, through to families of the deceased uk citizen being represented at overseas inquests by Counsel and expert witnesses, with the insured operator often unaware of the workings of the process or potential implications arising from the inquest that could impact upon any future civil claim brought by the injured customer or , in the case of a fatality, by dependents of the estate of the deceased.
It is likely it was the local service provider or ground handler that was running the activity at the time of the incident. If that ground handler is unrepresented whilst the family is not, the insured’s position (the insured may not be represented at all) may be damaged, particularly in light of the fact that the Package Travel Regulations 1992 will see a claim being issued against the insured by the family of the deceased or by the injured person.
Given the legal time limits for issuing a claim form (three years from the date of incident for an adult and until the age of 21 for a minor), it is often likely that much of the evidence will either have deteriorated (witnesses’ recollections) or that witnesses (particularly given the transient nature of employees in the travel service sector in many countries) will simply be untraceable.
operators and insurers who fail to take control of a claim from the outset can damage their prospects of mounting a successful defence
Insurers should be notified under the policy as soon as possible after the event – that will be a Condition of the Policy. However, a letter of claim may not follow for many years – rest assured the Claimant will have collated all possible evidence at the earliest possible opportunity and will take all possible advantage in the delay prior to issuing proceedings.
Travel insurance cover?
The injured party may have their own travel insurance, taken out independently of the adventure travel package and this may have legal expenses insurance cover to fund the injured party in bringing a claim in the UK (pursuant to the terms and conditions of the holiday contract).
If any subsequent claim were to succeed, then the injured party’s solicitors would, if successful, have their costs, subject to court rules, paid by the adventure travel company’s insurers in addition to the damages (compensation).
In terms of the repatriation costs, if the tour operator was at fault and the injured party’s own travel insurance policy covered the costs of the repatriation, then that insurer may seek to recover those costs. Insurers I have spoken to have experience of claims being brought as a separate claim or as a bolt on to the personal injury claim.
The adventure company’s insurers may, in many cases, save significant sums by having a procedure in place for cost effectively gathering evidence from overseas jurisdictions at the outset; dispatching investigators and specialist lawyers who understand the intricacies of the process as early as possible. During this period, the relevant ground handlers can be traced, statements obtained and, if possible, indemnities from their insurers. There is nothing more frustrating than facing a claim many years down the line, to find that the insured operator had no indemnity contract in place with their ground handler or that the insured did have such a contract, but did not keep a signed copy and did not secure a copy of the insurance policy required under the contract. Had this been managed from the outset, even if the ground handler has long ceased trading, any future claim could be directed to the insurer. Fail to do so and the opportunity is lost, for once the ground handler has ceased trading your chances of securing insurers’ details are virtually non-existent. Securing witness evidence early (perhaps by telephone using teams with multi-lingual staff) can pay dividends, as can ensuring that evidence is collated early, supporting the insured at the inquest and allowing an early and definitive denial of liability with such overwhelming evidence to avoid a claim being pursued.
The UK Coroner is likely to request a full copy of the file of papers of the overseas Coroner once the overseas inquest has concluded, before conducting the UK inquest
Of course, the number of incidents in the expedition industry is very small and most of the providers in this sector operate excellent safety systems and emergency back-up procedures. Indeed, many of them work together to ensure safety standards – organisations such as the Expedition Providers’ Association and The Year Out Group – both of which have their own safety standards. In addition, many of the industry bodies, along with experts in the field and those representing consumers, have come together to develop the new British Standard for safety on overseas expeditions/adventurous activities – BS:8848 (being the height of Everest in metres). This has been developed for adventurous activities abroad with the aim of reducing the risk of injury or illness.
The task for brokers and insurers should be to go that one step further and encourage their clients to seek the knowledge and tools that can help them stay conversant with the risks they face in the adventure travel sector.
Many insurers and brokers are now going one step further; encouraging insured’s to attend specialist training courses. In association with a number of specialist brokers and insurers, we run two day training seminars for the travel sector throughout the year, including those specifically tailored to the outdoor and adventure travel sector, covering such issues as company formation, booking terms and condition, advertising, data protection, police response to incidents in the uk and overseas, coroners inquests, indemnity contracts with service providers, Health and Safety Prosecutions, Liability issues in the UK and overseas, concluding in a full mock trial with participants as witnesses. The insurers and brokers involved encourage their insured to attend, to minimise liabilities, ensuring that corporate structure and terms and conditions afford all possible protection to the insured (and thereby insurers). Similarly, the insured understand their potential liabilities and can respond appropriately to investigate when incidents arise. Ideally, insured’s will have indemnity contracts with service providers AND will have a copy of the valid and relevant insurance policy, making redirecting a claim far easier and therefore that any early investigation by insurers is likely to pay dividends and save the insurer money. Several of the insurers are contemplating offering premium discounts to their insureds who attend the future seminars in our programme (including specialist health and safety courses for companies on the sector such as Off Site Safety Management (Risk assessment, venture planning, legal liabilities, contingency planning, crisis response and management, media response) as well as vehicle safety assessment courses from our specialist Health and Safety Advisers.
Insurers I have spoken to have experience of claims being brought as a separate claim or as a bolt on to the personal injury claim
The old military adage that ‘Proper Prior Planning Prevents Poor Performance’ is as relevant today as it has ever been. Working together from the outset not only protects the insured’s and insurers’ position, it also confirms your sector expertise and client commitment to the insured.