Manage Risk: Manage Cost. Towergate Patrick Client Seminar

An overview of the morning

On Thursday 6th October, Towergate Patrick hosted their first Client seminar in Central London. A broad spectrum of clients attended, ranging from those who provided care in a residential setting to those who provided it within peoples’ homes or the local community; and we were particularly delighted to welcome one long-standing client who had been with us for nearly 30 years. Despite everyone’s backgrounds, and time spent in the beleaguered industry, they all had one thing in common; they are a part of an industry that faces constant challenges from conflicting regulation and legislation and, on a day-to-day basis, are trying to maintain a high standard of care despite local authority spending cuts.

Sue Lee, Managing Director of Towergate Patrick welcomed the attendees and introduced the theme of the morning – Manage Risk: Manage cost. Sue’s objective was to share information from an insurance and risk perspective and show, when used and applied effectively, how insurance and other value-added benefits attached to policies and services really can help improve cost efficiencies.

We believe insurance and risk management are intrinsically linked and a company with effective processes and procedures in place, with systems to measure, monitor and adapt, are those businesses which have fewer claims and benefit by managing their future insurance costs.

This is why we link risk management to our policies and have invested in new systems and approaches over the last year to support our clients, ranging from care-specific online HR systems to online business continuity and risk management including Health and safety and e-learning.

Risk management provides the backstop of insurance and can lead to business benefits in terms of insurance savings with improved efficiencies across the board.

John Whittlestone, Account Executive for Towergate Patrick, then went on to discuss two types of claims, the costs of which could have been mitigated had the correct processes and procedures been followed, and the correct legal advice taken.

The first was a Public Liability claim following personal injury of an elderly service user. The residential home was an established well-run family business but, unfortunately, as they had failed to document the chain of events leading up to the injuries, they were unable to provide the necessary evidence (in the form of accident book entries and risk assessments) to deflect the claim. As a result the insurer was forced to concede liability.

We can’t emphasise enough how important it is to have solid health and safety reporting in place. Insurers rely on the insured to provide evidence, so ensure your management systems allow for effective reporting.

The second case study was a Legal Expenses claim for tribunal costs. The client was a regular user of the Abbey Legal helpline, which is included as part of our insurance package and, as such, when they wanted to dismiss a disruptive member of staff they consulted the Abbey Legal Helpline. Unfortunately, in the meantime, the employee got wind of the fact they were about to be dismissed and brought about a spurious grievance against a colleague. They contacted the Abbey Legal helpline again who advised them they must deal with the grievance before the disciplinary. However, it was an untenable position which the client decided couldn’t wait any longer and the employee had to go. Although Abbey Legal did not agree with this course of action, they advised on how to mitigate the impact of this decision.

Not following the advice of the legal expects had several implications; firstly the insurer was within their right to repudiate any claim for tribunal costs; the chance of success was reduced and the reserve for unfair dismissal was increased, along with claims costs.

Again this situation could have been avoided and we strongly advise you to consider any legal advice given. However if you don’t, please understand the implications and, most importantly, talk to your broker.

Brendan Donahue, Employment Law Solicitor for QualitySolicitors Burroughs Day, gave an informative overview of how to avoid Risk in Disciplinaries. He also provided us with some recent Employment Tribunal facts and figures:

• Overall number of claims are down, BUT
• Age discrimination claims are up 32%
• Claims by part time workers have tripled
• Compensation is generally capped at £66,400
• Basic Award is £12,000
• Breach of contract is £25,000
• Highest awards

£289,167 (sex) 2010 - 2011

£729,347 (disability) 2009 - 2010

• Tribunal costs generally capped at £10,000

Brendon gave some common sense advice on what to do if faced with an Employment Tribunal; in the first instance Don’t Panic – you could end up making a mistake that can’t be rectified at a later date. Take your time and go through your disciplinary handbook. Seek advice as soon as you can - this will take some of the pressure off you. Ensure you comply with the ACAS Code of Practice – failure to do so could result in any fees awarded uplifted by 20%.

If you are considering suspension, once again consult the disciplinary handbook. If it’s a Gross Misconduct case and warrants dismissal, you should suspend immediately. This then needs to be confirmed in writing along with the conditions of suspension. Ideally suspension should be with pay, however should you choose to suspend without pay, it should only be in extreme circumstances and you must exercise great caution.

Brendon then went on to discuss what you should do if the employee then goes on to raise a grievance. As previously discussed in the Employment Tribunal case study, in the event of a grievance, the disciplinary procedures should be postponed. The grievance must be investigated and the correct procedures followed. If it isn’t upheld you can continue with the disciplinary process. You then need to consider who should investigate, what the investigation should include and what evidence should be disclosed.

The next stage of the proceedings is The Hearing and a different person to the person who investigates should chair. It should be a formal affair. All persons concerned should be introduced and all the allegations and evidence outlined; the employee must be given the opportunity to raise any issues. Once The Hearing is complete, proceeding should be adjourned until a decision is ready to be announced. It is a statutory right for a companion to accompany an employee who is allowed to ask questions, but they are not allowed to answer on behalf of the employee. They can be asked to leave if they become disruptive. Also make arrangements for someone to take notes during the proceedings.

Once a decision has been made, you need to write to the individual to confirm your decision and they must be given the opportunity to appeal.

Whilst this is sound advice, by having comprehensive employment documents in place, along with robust policies, you will reduce the risk of disputes and help successfully defend any potential employment tribunal claims. Your insurance policies should include Legal Expenses; however speak to your broker to make sure you are adequately covered.

Steve Williams, Managing Director of WTW Solutions, gave a thought-provoking presentation on Risk Management and The Balancing Act. It is said that Risk Management works best when embedded into a business’s day-to-day culture, process and systems. However, the increasingly-prevalent challenge is to balance the running of a profitable business against the need to comply with regulation and legislation whilst managing and minimising risk to avoid additional costs.

Earlier, Sue Lee had spoken about the challenges facing the care sector today; cost control, compliance, CQC, safeguarding, employment and Local Authority cutbacks to name but a few. However put those against the backdrop of an increasingly litigious society and the challenges multiply.

Taking on the challenge

Having a management system in the workplace offers fast and accessible management information. Whilst it can’t become a cottage industry within the business, it does give you the ability to intervene instantly. It can be seen as IT against people, however an IT solution can be deployed quickly and offer cost control. It gives you the ability to manage operationally and provides protection and defensibility. It is easily replicated across multiple sites, and provides consistent, measurable, standards across the businesses. Effective health and safety and a well run business go hand-in-hand.

Steve went on to discuss online training which is an area that has been developed considerably over the last five years and can offer powerful functionality. It is time-efficient e.g. an agency worker can be trained quickly in the first few hours of work and this fact is recorded, again showing defensibility. Of course it can’t replace “on-the-job” aspects like manhandling, but it can offer a baseline of knowledge and awareness.

Typically, training courses of this nature take 25-30 minutes and can be scheduled at any time, or anywhere. The training records are stored electronically and certificates can be printed off as required. Integrated checklists offer verification of management standards and alerting functionality can allow intervention of critical risks as they happen, not once they’ve gone wrong. Overall, training can be reported-on in minutes rather than hours and days.

One of the most significant benefits is the Risk Data; it enables you to demonstrate quality and controls in support of accreditation and provides an audit trail for defensibility. If you don’t have evidence, you cannot defend a claim and, if one claim gets through, this can open the floodgates and instil a claims culture within the business.

To summarise, risk management and compliance is a day-to-day trading reality and, if it conflicts with operational processes, it won’t work effectively. Sophisticated and yet simple-to-use management systems solutions can deliver cost-effective risk management and compliance that can enhance the value of a business.

The morning was rounded off with a Q&A session and in summary, insurance is about protecting you from Risk and we hope our clients were able to take away from the morning ideas as how to manage, reduce or even eliminate risks, and in turn produce efficiencies for them and their business.

Next Steps

Media coverage of our economic climate is immense. Everywhere we look and every time we do, we are bombarded with statistics of doom and gloom. Yet nowhere is this more evident than for those in the care industry. As budgets are under tighter control, we urge you to look at your current policies and make sure you are getting the most out of them. If there are features you don’t understand, or a service you aren’t utilising to its full potential, then please speak to your broker.

If you would like further information on any of the topics discussed, please contact one of our specialist Care Advisors on 020 8336 0099, or via email carehomes@towergate.co.uk.