Article by Wall Street Journal: The Morning Risk Report: Ship Lawsuit Underlines ‘Duty of Care’ Risk

October 23, 2015

Last week’s news that the family of a crew member from the missing cargo ship El Faro is suing the owners for $100 million is a reminder of the rising risk companies face from employees or their families when they feel they haven’t been adequately protected from occupational dangers.

Tara Lee and Joseph Davis of law firm DLA Piper, writing this summer, said that the law covering the so-called “duty of care” owed by employers to employees hasn’t changed, but what has changed is “the recognition that the United States can be an appropriate forum for lawsuits arising out of injuries that occur just about anywhere on the globe.” They point to recent lawsuits involving employees working outside the U.S. who have been injured in accidents, kidnapped, murdered, wrongly imprisoned or contracted a rare disease. “Organizations cannot inoculate themselves from lawsuits like these…Anyone can file a suit, and companies should expect that one will follow any serious incident,” they wrote.

Peter Martin, chief executive of Afimac, a global security consultancy, in commenting on the El Faro suit, wrote that “regardless of how many of these cases we see, many companies truly fail to understand their obligation under ‘duty of care.’” Limiting such risk is partly a case of companies adhering to their own policies, he wrote. “Where a company has clearly not followed its own internal policies on items like routine maintenance or the monitoring of incoming inclement weather, you can be assured that will result in a significant financial penalty, as well as potential criminal charges for the management that directed the employees should negligence be found,” he said.
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