Slip-and-trip claims rise in severity each year

By Supplied Time of article published Feb 6, 2020

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The R7.1 million claim that was recently filed against retailer Woolworths after a customer stumbled and fell over a packing crate once again brings the growing liability risks faced by South African businesses into focus.

Manisha Chiman, the executive head: liability underwriting at SHA Risk Specialists, said personal injury claims were increasing in severity with each passing year.

“Looking at SHA’s own statistics, the average intimated values for personal injury (slip-and-trip) claims have risen from R172600 to R270690 between 2016 and 2018. This essentially means that the value of claims by individuals who sustained injuries on an insured’s property, grew by over 56percent in a space of two years.”

Chiman said one of the main reasons for this rising litigation risk was that the public has become more aware of their rights in personal injury cases.

“In addition, claims for pain and suffering are becoming progressively larger and are often inflated, while claims for future loss of earnings tend to be exaggerated.”

However, where claims were obviously inflated and likely to be dismissed or greatly reduced, businesses could still face crippling monetary losses.

“From what we have seen, the cost of adequate legal defence has gone up by between 8 percent and 10 percent annually in recent years. When considering the inflationary effect that legal costs have on liability cases that routinely take three to five years to reach settlement, this represents a potentially catastrophic monetary loss for the uninsured business.”

Chiman said another area of concern was the role of litigation funders and attorneys in driving these claims.

“The average South African consumer cannot afford the costs associated with pursuing a claim in court, especially against large corporations. However, recent years have witnessed a major increase in the popularity of litigation funders.”

She said individuals paid a premium to these entities in return for the promise that they would fund the costs of legal representation, in the event that the policyholder requires it. “The concept may appear to be advantageous for all the parties involved: the insurer, insured and the legal representative.

"However, drawing out the litigation process often means that the legal representative has an opportunity to rack up more fees. In some cases, unscrupulous legal representatives play on the fact that most plaintiffs are lay people who have little to no knowledge of the onus that needs to be discharged in a civil claim for liability to attach to the defendant.”

Consequently, drawn-out litigation where the plaintiff’s claim is not valid in law, often results in the court handing down a costs order in favour of the defendant. Chiman warned that plaintiffs need to become more aware of the fact that property owners were not necessarily liable for each and every incident of injury or damage to property by virtue of the fact that an incident occurred on their premises.

These trends were likely to continue, which was why businesses must ensure that their broadform liability insurance policies, reporting procedures and their risk management measures were in place and up to date. 


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