EARTHQUAKE RISK

Evening Post, Volume CXVI, Issue 103, 28 October 1933, Page 10

EARTHQUAKE RISK

EMPLOYERS' LIABILITY

PRIVY COUNCIL DECISION

EFFECT IN DOMINION

Speaking at tho annual meeting of ' the South British Insurance Company " , in Auckland, Sir George Elliot, chair- ';' jnau of directors, as reported in "The Post" on Thursday, commented on tho Privy Council decision in tho Hawke's Bay earthquake cases, the effect of which, he said, was tho placing of a liability upon employers that was not merely unreasonable, but unbearable. ' Views of Wellington business men on 1,. the matter were sought today by a ■ , '"Post" representative, and strong support was given to the remarks made by Sir George Elliot. It was pointed ■. out that the New Zealand employer, ; ; as a result of the Privy Council de- ;*:. cision, was facing a burden which went 1 far beyond his previous conception of ■ q his obligations towards his employees, "";' and that in the event of a gigantic con- <^| vulsion of Nature no employer in New Zealand could meet the obligations now resting upon his shoulders. Further, it was stated, that unless some amending legislation was introduced it would not be surprising to find that tho risk, tho nature of which was unascertainable, could not bo insured. "Tho civilised community, has al- *■• ways imposed certain obligations upon ;m "employer," it was stated. "The health a.nd comfort, to a certain extent, of the cmploj'eos, Lave always , been regarded as matters that might ■ properly be imposed on an employer of labour. The direct benefit, of . <oursc, is reflected upon tho employer :; through -observing theso conditions. EFFECT OF DECISION. ."From time to time, however, situa- ' ■ lions arise, momentous in their charac- ','• ter, which although they appear logically to come within the scope of an ■" employer's obligations, show by their ', very nature that they do not. Such an ' occurrence has. come upon the employer by the decision of the Privy Council in • the Napier earthquake cases. It is quite easy to imagine that however eminent, the great Judges were v.}io de- - cided these cases in England, they were - not able to visualise as a -layman in 2vew Zealand could visualise, the tre- ■'', men'dous effect of an earthquake, and indeed of their judgment. "It is not, of course, my intention in any way to question, even if I could, ■ -which I cannot, the correctness of the ■ decision from a purely legal point of view. What, however, does emerge clearly from the decision is that a New Zealand employer is facing a burden «•„• never contemplated 'before and which • goes far beyond his previous concep- * tion of his obligations towards his employees. It is perfectly obvious that no employer in New Zealand could meet the obligations now resting upon his , shoulders in the event of a calamity such as visited Napier visiting one of •■.'; the large cities of the Dominion. PROSPECT OF COMPENSATION. "Wheu one realises'that in some of tho large shops and factories thereare hundreds of men and women who might : by the dreadful catastrophe of an earthquake lose their lives or limbs, it requires no more than to say that the dependants of those persons or the ■■■■ injured would have little reasonable ■ prospect of receiving compensation for ' '•' the loss they suffered:. In the "big shops ■' and factories of the main metropolitan 7 centres in New Zealand it is not diffiLi» cult to imagine a liability" on a single .'■':■•. employer of £250,000, while the whole ",':' risk in an affected area might run into ~., many millions of pounds. v "It is commonly understood that em- • ■ ployers pay a premium to cover the ■:t risks under the Workers' Compensation ~':: Act, and these premiums, no doubt, are '■'-< based upon figures ascertained by ex- • ■'■ perience, but the calculations which re- '■' suit in the fixing of a premium never •m took into account, and it is quite obvi- -■•'•' oiis, can never take into account, the ■■'-,• possibility of meeting claims arising i from a gigantic convulsion of Nature ! -.■• such as an earthquake might visit upom a city. .; V. "Employers will rise in their wrath V' : if they are called upon to pay, as no " doubt they will be unless some limi- -■'• tation is placed upon i their liability, ■I a loading of their present premiums to . meet an event which no data already " gathered can reasonably anticipate, and ■.:!. the likely extent of the risk of which .'.'■ cannot be ascertained. "..'■" TO MEET THE POSITION. ~ "No doubt something, will bo done ''''<■ to meet the situation in the way, of ■ •■■ amending, legislation, but until it is (lone it is reasonable to expect that employees, in thevevent of a calamity such "as that mentioned, will have .little chance of their dependants rcceiv- ""• ing full compensation out of the assets of their employers. It certainly would 1 not be surprising to me to know that the risk, the/ nature of which is unaseprtainabie, could not be insured., And ■ ■ lastly, when I contemplate the wholesale disaster that might follow a bad '. earthquake in a mining area, my view that no employer could'be expected reasonably to protect his workers in ' such circumstances, is fortified. Indeed,'™ the name of justice, why should •■•■- an employer protect his employed injured by an act of God?"