When hire plant fails, you could be blamed. Barrie Hobbs describes how to mind your back and prevent a nightmare scenario
It's easy to believe that if plant is new, or on hire, there won't be any problems. Wrong.

Imagine the scenario. Six months ago you bought a brand new drilling rig. Bristling with state-of-the-art technology, it has twice the flexibility and capacity of your old rigs and, because you are busy, the new rig is booked up well into next year. Then disaster strikes. The rig collapses. Someone is injured or dies.

The buck stops here
The police and the HSE descend and seal off the site. Work stops, employees are traumatised, the company takes a beating in the local press, programmes slip and, even after the site is reopened, you have to cover the lost rig's capacity until it gets the all clear to continue.

It might not even be your rig that failed. One too many failures of that model elsewhere could see a blanket prohibition on their use. And remember, serious accidents arise from much less imposing kit than a piling rig. In the last year, 18 construction workers have been killed by something collapsing or overturning.

If you are tempted to think that because the plant was new or hired the financial or criminal buck will eventually stop elsewhere, think again. Whether they involves rigs or other plant, here are eight situations that could leave the plant manager with a headache.

Criminal liability is even more difficult to pass down the line than financial liability

  • The warranties for the new plant limit the supplier's liability to the cost of replacement or repair and exclude all liability for downtime, catch-up costs or other financial loss
  • The warranties are no good because you used "untrained" staff. Even your most experienced employees might find themselves "untrained" if the warranty requires staff to undergo a supplier's training programme
  • The warranties have been invalidated by failure to keep to the supplier's maintenance programme
  • The warranties have been invalidated by a failure to notify the supplier of a change of ownership. Intergroup transfers can be particularly easy to overlook
  • Hire terms will almost certainly exclude all forms of financial loss beyond providing a replacement. And even that cold comfort could disappear if the plant failure is not reported quickly
  • Your own insurance policies may not cover, and may specifically exclude, liability for financial loss caused from plant failure: especially where the supplier's warranties have been invalidated
  • Even where insurers must provide an indemnity with regard to injured employees, they may still be able to reclaim what they have paid where a plant supplier's guidelines have not been followed. At the very least, next year's insurance premium is likely to increase
  • Finally, health and safety legislation assigns employers a duty to provide safe equipment. If plant managers (in addition to the company) are criminally prosecuted for failing to provide or maintain safe equipment, they will find it difficult to raise a defence where the supplier's guidelines have not been followed. Criminal liability is even more difficult to pass down the line than financial liability.

    All of which, in theory, should be easy to deal with. Read the warranties and the insurance policy and try to negotiate away the gaps and limitations, or at least be aware that they exist. Then keep proper plant maintenance records.

    Limit risk
    However, simplicity is deceptive. Each warranty is subtly different, as is every insurance policy. Frequently the warranties attaching to this year's model are slightly different to those attaching to the model you bought two years ago, and insurance policies have a nasty habit of becoming increasingly restrictive.

    Problems are compounded when those responsible for negotiating plant purchases and insurance don't pass on the relevant details to those who actually manage the plant.

    Catalogue of errors

    Recent quotes from HSE death investigations show the pitfalls of slack plant management: “On June 8 2000 a complaint was received . . . stating that the mobile cranes were unsafe as they had not had a valid test certificate since 1995 and had actually failed a test last year . . .” “He had not received training in slinging/signalling, although he had 20 years’ experience of this type of work . . .” “Dumper moved forward crushing [victim’s] head . . . Initial test of dumper by police . . . shows faulty hand brake . . .”

    • Source

    Construction Manager

    Postscript

    Barrie Hobbs is an associate partner for law firm Laytons