Directors, due diligence and occupational safety and health

By Glen Bartlett.

Key Points:
Planning how you will investigate an accident and understanding the consequences of the investigation are critical to your business.

Companies who investigate workplace accidents and produce reports of these investigations frequently identify the causes of the accident and the failures in the workplace systems that contributed to the accident. At times these reports can detail in brutal honesty the companies' failures. In doing so they create the best opportunity to remedy actual inadequacies, but they may also be providing evidence for their own prosecution for a breach of the relevant safety and health legislation.

Problems of investigation reports

Statutory safety inspectors in each Australian jurisdiction have extensive powers to enforce compliance with the legislation. These powers frequently extend to taking samples, issuing directions about work, seizing items of plant and equipment, interviewing people (including the power to compel a person to answer any question) and obtaining documents. An inspector who requests a copy of an accident investigation report is therefore entitled to a copy of it unless it is subject to legal professional privilege (discussed below).

The result may then be that the accident investigation report becomes evidence used by the prosecution against the company. Any dirty laundry and admissions made then become evidence in the courtroom. Additionally those employees, who honestly give evidence about an incident and have admitted some wrongdoing during the company's investigation, may find the report being used as evidence for a prosecution against them personally.

Companies are therefore potentially at risk because of their own reports and should therefore manage that risk. This may include:

• ensuring the investigation is managed properly and carefully assessed prior to the report being generated; or
• seeking legal advice over an accident and asserting legal professional privilege over the report.

Privileged accident investigation reports

A growing number of companies are choosing to seek legal advice immediately following an accident regarding the company's potential liability, compliance with legal obligations and action required to meet those obligations and for the preparation for any actual or anticipated litigation. This is particularly common in cases of fatalities or serious injuries. This frequently results in a lawyer requesting an investigation into the accident (either internally or through an external expert). The resulting report (and supporting documentation) is therefore covered by legal professional privilege and does not need to be provided to a statutory inspector who demands it and does not have to be disclosed in any court proceedings.

There are, however, a number of issues that need to be considered in this regard.

• Legal professional privilege only applies to documents created for the "dominant purpose" of preparing for litigation or for obtaining legal advice. This process cannot simply be used as a veil to preclude production of documents.
• Care must be taken to ensure the report and information within the report are handled in a manner that is consistent with maintaining legal professional privilege. If the details of the report are distributed to others, or substantially used for other purposes, legal professional privilege will be lost.
• Employers should act, immediately and independently of any privileged report, to manage any hazards that have been identified as contributing to the accident rather than wait for a report.
• The actions of a company following an investigation covered by legal professional privilege must be in response to the lawyer's advice and not just the investigation report. Making changes to the workplace based only on the report could be inconsistent with maintaining legal professional privilege, which may result in the report no longer being covered by legal professional privilege.

Company-initiated reports

For many reasons, some companies do not seek to obtain legal advice in respect of an accident and will conduct their own investigation or recruit an expert consultant to conduct an investigation. In these circumstances these reports may be used by statutory inspectors and as evidence in court. Therefore, care should be taken to ensure that the investigation and report do not unnecessarily, and without justification, expose the company to harm.

Companies should therefore ensure that:

• the scope of any investigation is confined to the accident in question
• statements, admissions and conclusions are based on facts and those facts are substantiated by evidence (with particular care being taken over evidence that is hearsay)
• only relevant material is considered in the investigation and report; and
• consideration is given to the actual, rather than perceived, obligations and to the standards required under the legislation.

We recommend that, at least in the case of a serious accident, legal advice be obtained before beginning investigations or creating documents to discuss your options and the possible consequences.

Conclusion

Planning how you will investigate an accident and understanding the consequences of the investigation are critical to your business.

Serious accidents in a workplace frequently place great strain on all those within the workplace, particularly managers. Obtaining legal assistance with the investigation frequently allows management to focus on the many other important issues that arise.

In addition to any investigation, numerous other matters require immediate attention following an accident. Counselling for staff, media response, site management and response to police and statutory inspectors are all critical. Planning this response is a wise investment of time.