Work accident to a subcontractor employee – division of liability between the subcontractor and the operating contractor
Sep 22, 2019
Case TA 9973-07-16
Construction sites frequently engage subcontractors. When one of the employees of these subcontractors is injured in a workplace accident, disputes may arise regarding who is responsible for compensation. For example, what portion of the compensation should be paid by the subcontractor (the direct employer of the injured worker) versus the main contractor?
An example of such an allocation of liability can be seen in the following case, which was heard by the Tiberias District Court.
Accident Circumstances:The claim was filed by an assistant electrician who was injured when he fell at the site due to a bag filled with plaster waste. The employee was transported from the site by ambulance and had to undergo surgery on his leg due to a comminuted fracture and displacement of the patella.
Parties to the Case:The plaintiff filed the claim against his employer, the subcontractor (Defendant 1), on a project executed by a main contractor (Defendant 3). The insurance companies were defendants 2 and 4, respectively.
Who Pays, and How Much?
The court ruled in favor of the injured worker, awarding compensation exceeding 500,000 shekels, due to a series of safety failures. It was found that the defendants did not implement a safe working method and were negligent toward the plaintiff, who was only on his second day of work. Among other failings, the defendants:
Allowed him to work without the required safety measures
Failed to ensure safe access paths
Did not remove hazardous obstacles
Did not supervise activities at the site
The court allocated liability as follows: the subcontractor (the injured worker’s employer) was responsible for 30% of the damages, while the main contractor (construction executor) bore 70%.
Tel Aviv 9973-07-16
On-site work frequently involves subcontractors. When one of those subcontractors' employees is injured in a work accident, a dispute can arise regarding liability for compensation. For example, what is the rate of compensation to be paid by the subcontractor (the direct employer of the injured employee), compared to the rate of liability of the performing contractor. An example of this type of division of liability can be seen in the case below, which was discussed as part of a lawsuit filed in the Tiberias court.
Circumstances of the accident – The claim was filed by an electrician's assistant who was injured when he fell on site following a mishap with a bag full of plaster waste. The worker was rushed from the site by ambulance and had to undergo surgery on his leg for a crushed fracture and a dislocated patella in his knee.
The parties to the case – the plaintiff filed his claim against his employer, the subcontractor (Defendant 1), in a project carried out by a contracting company, which is Defendant 3 (the insurance companies were Defendants 2 and 4, respectively).
Who will pay and how much will they pay?
The court ruled in favor of the injured party in compensation of over 500,000 shekels, following a series of failures in the field of safety. It was determined that the defendants did not introduce a safe work method, and were negligent towards the plaintiff, who was only on his second day of work. Among other things, they left him to work without the necessary precautions, did not ensure safe passageways, did not remove dangerous obstacles, and did not supervise what was happening in the building.
The court ruled that the injured party's employer, the subcontractor, would be responsible for 30% of the damage, while the main contractor (the construction contractor) would be responsible for 70%.
The legal aspect
The question of dividing liability between a subcontractor and a main contractor is examined according to the degree of fault of the parties, as derived from the degree of their negligence. The division of liability is at the discretion of the judge sitting in the case, based on his impression of the degree of fault of each of the parties involved, including in terms of moral culpability.
The subcontractor's liability (30%) stemmed from the fact that it sent an employee on its behalf to a construction site, without ensuring a safe working environment, and because it did not instruct him on the safety rules at the site, even though it was aware of the existence of dangerous obstacles (such as construction waste bags).
The responsibility of the contractor performing the work was broader – 70%. First, the court mentioned the first principles according to which the appointment of a subcontractor does not detract from the responsibility of the main contractor, who will continue to be considered as the construction operator. It was then determined that the main contractor did not appoint a foreman as required by the occupational safety regulations, and did not prove that safety briefings were given to the workers. Also, although a work accident occurred on site that required the evacuation of a worker by ambulance to the hospital, no investigation form was prepared.
As you can see, work accidents in the construction industry can cause serious bodily harm. Even if it's not a fatal accident, and even if the accident is not apparently serious, things can escalate into a lawsuit for large sums. See how a fall due to a garbage bag turned into a lawsuit in which the injured party demanded (and received) compensation in the amount of more than half a million shekels.
Allocation of Liability Between Subcontractor and Main Contractor
The question of liability allocation between a subcontractor and the main contractor is examined according to the degree of fault of each party, as derived from their level of negligence. The allocation of responsibility is at the discretion of the presiding judge, based on their assessment of each party’s culpability, including moral fault.
The subcontractor’s liability (30%) arose from the fact that it sent its employee to the construction site without ensuring a safe working environment and failed to instruct him on safety rules, even though it was aware of hazardous obstacles, such as construction waste bags.
The main contractor’s liability was broader (70%). First, the court noted established principles that appointing a subcontractor does not absolve the main contractor, who continues to be considered the responsible party for the construction work. The court then found that the main contractor did not appoint a site manager as required by safety regulations, and failed to demonstrate that safety briefings were provided to employees. Additionally, although a workplace accident occurred that required
ambulance evacuation to the hospital, no accident investigation report was prepared.
As can be seen, construction site accidents can cause severe bodily injury. Even if the accident is not fatal, and even if it appears minor, it can escalate into a claim involving substantial sums. For example, a fall caused by a bag of construction waste led to a claim in which the injured party demanded (and received) compensation exceeding 500,000 shekels.
The insurance aspect
In any construction project, it is very important that all those involved in the work insure themselves with a proper insurance policy. Both the main contractor and each and every subcontractor who comes to the site. Since claims often rise to significant amounts, insurance policies should be prepared accordingly.
Unfortunately, we often encounter policies with inadequate coverage (to put it mildly). We often encounter policies for insurance for contractor work that do not comply with the latest case law in the field of bodily injury. Therefore, please note. It is important to clarify that the policy includes appropriate amounts for the purpose of covering bodily injury, both in the chapter concerning employer liability and in the chapter dealing with third-party insurance. Similarly, one must ensure that there are extensions to the policy's exceptions, and ensure that they are based on adequate amounts. Furthermore, one must ensure that the name of the insured is properly expanded in the contractor work insurance policy, so that the rights of each party are well protected.
In every construction project, it is extremely important that all parties involved in the work insure themselves with an appropriate insurance policy—both the main contractor and each and every subcontractor who comes to the site. Since claims often climb to substantial amounts, the insurance policies must be arranged accordingly.
Unfortunately, we frequently encounter policies with insufficient coverage (to put it mildly). More often than not, we come across contractors’ works insurance policies that do not align with the most recent case law in the field of bodily injury. Therefore, pay close attention. It is essential to verify that the policy includes adequate sums to cover bodily injury, both under the employers’ liability section and under the third-party liability section. Likewise, it is necessary to ensure the inclusion of extensions to policy exclusions and to confirm that they are supported by appropriate coverage limits. Furthermore, care must be taken to properly extend the definition of the insured under the contractors’ works insurance policy, so that the rights of all parties are fully protected.
