Negligent Entrustment When is a license check not enough?

Session Objectives 1.Discuss legal concepts attached to vehicle collisions 2.Review employer strategies to reduce event exposure and deal with potential legal consequences 3.Review case law examples (USA jurisdiction) where employer was held accountable

Disclaimer – No Legal Advice I am not an attorney Legal issues are subject to change & vary by jurisdiction Each case is unique While traffic laws may vary, enforcement & interpretation varies even more greatly

Post-Collision Questions While insurance programs help deal with physical damages, bodily injuries and financial consequences, there may be many open questions….

Post-Collision Questions Questions of “fault” and/or “negligence” contributed by each driver. –Were there violations of traffic safety laws proximate to the cause? –Was there impairment of either driver? –Were there roadway design issues or other “engineered” issues? –Was each driver “competent”?

Post-Collision Questions Are any other persons involved through their relationship to the driver(s)? –Vicarious Liability –Respondeat Superior (let the master answer)

Vicarious Liability Vehicle owner is responsible for the conduct of driver who has been given permission to operate the vehicle (i.e. teenage child, neighbor)

Respondeat Superior Employer is responsible for the conduct of an employee while the employee is acting in the scope of his/her employment

Personal versus Business Driving Examine: –Ownership of vehicle –Garage location and first destination of the day –Typical use of vehicle –Carriage of passengers or goods –Are trips self selected or suggested by employer –Conduct of driver during trip (ie. Use of cell phone to transact “business” while driving)

Personal versus Business Driving If a “personal” trip, then crash investigation will examine: –Individual’s contribution of fault/negligence –Driver impairment –Individual's license to drive (status) –Whether material traffic laws may have been violated (i.e. Impairment, Excessive Speed, etc.)

Personal versus Business Driving If a “business” trip, then the investigation may expand to determine whether the employer's practices contributed to the event: –Hiring Practices, –Driver Supervision, –Vehicle Maintenance, –Entrustment of Vehicle

Negligent Hiring Employer responsible for the conduct of an employee if the employer failed to use due care in hiring and retaining such an employee

Negligent Supervision Negligent Retention Employer responsible for the conduct of an incompetent employee if the employer failed to use due care in monitoring (to detect problems) and retaining (after detecting and failing to address problems) This duty is not limited to actions occurring on the employer's premises

Negligent Maintenance Employer responsible for the care and upkeep of the vehicle where the failure of the employer led to the unsafe condition of the vehicle that also contributed to the collision. (i.e. bad tires, nonfunctioning brakes, etc. were materially responsible for causing the crash)

What is Negligent Entrustment? To charge someone with a trust or duty in an inattentive or careless fashion or without completing required process steps Hmmm…

What is Negligent Entrustment? Allowing another person to use a vehicle knowing, or having reason to know, that the use of the vehicle by this person creates a risk of harm to others A collision occurs and it is later alleged that the employee or contractor was dispatched without due regard for their qualification or ability to safely operate the vehicle

Five Specific “Tests” 1.Driver was negligent in crash 2.The driver's negligence proximately caused the crash 3.Vehicle owner entrusted the vehicle 4.The driver is deemed incompetent 5.The employer knew or should have known of this incompetence

1. Driver Negligent in Crash? Accident reports or investigations Citations/Tickets as a result of the accident Accident Photos

2. Driver was Proximate Cause? Again, will be determined by investigation, reports and “experts” on crash scenes Was there a direct link between the driver’s incompetence/negligence and the cause of the accident?

3. Employer Entrusted Vehicle? Entrusted if the driver is “given keys” and the vehicle was not taken without permission

3. Employer Entrusted Vehicle? Entrustment is the act of giving access, not based on nature of relationship. So contractors, third party service providers (ie. security guards) or family members of employer/employee could be “entrusted”

4. Demonstrating Incompetence Was the driver “qualified” to drive? Subject to specific safety regulations? In compliance with those regulations? Possess proper license for vehicle type? License was valid? Required “paperwork” was up to date?

4. Demonstrating Incompetence By reason of experience, training, physical qualification was the driver: –Able to demonstrate “safe operation” of vehicle? –Able to determine that cargo was loaded and/or secured properly/safely

4. Demonstrating Incompetence Use of Federal Motor Carrier Safety Regulations as a “standard” is common Potential to apply these standards even if the affected driver does not operate a “commercial motor vehicle”

5. Employer Knew or Should Have Known "Liability for the negligence of the incompetent driver to whom an automobile is entrusted does not arise out of the relationship of the parties, but from the act of entrustment of the motor vehicle, with permission to operate the same, to one whose incompetency, inexperience, or recklessness is known or should have been known by the owner." (5A Am.Jur., Automobiles and Highway Traffic e 580 pp ; see also 8 Am.Jur.2d, Automobiles and Highway Traffic, ee 561,573; 60 C.J.S., Motor Vehicles, e 431).

5. Employer Knew or Should Have Known All employment records may be researched including the driver’s background, and… Facts directly related to the incompetence that are discovered, could have been discovered by the employer

5. Employer Knew or Should Have Known Ignoring a real or potential problem is not an excuse or defense: –Allowing “exceptions” to business practices (ie. Safety, hiring, discipline, etc.) –Documentation showing incompetence without documenting a response action –Doing nothing at all (i.e. “no policy”)

Spoliation Spoliation of Evidence is asserted where defendant “lost” evidence that may have been material to the plaintiff’s case.

Spoliation Some jurisdictions allow suit as a separate tort action against management team Others handle as instruction to jury to assume the evidence was damaging to the defense’s case.

Business Practices Prevention and “Defense” Driver Training Policy Development Driver Supervision Program Hiring Practices

Action Steps? As a manager who is responsible for people that drive on the job…How do I: –Prevent collisions, preserve property, protect lives –Develop and document policies/practices –Prepare a defense in case of litigation

Action Steps 1.Employer policies regarding: Driver Selection/Qualification/Training Driver Supervision/Monitoring Permissive Use of Vehicles & Maintenance Post-Accident investigations 2.Governmental regulations (if applies) 3.Managers should document that the regulations/policies are followed

Examples of Standards USA –Federal Motor Carrier Safety Regulations SafeStat Online SafeStat Score –American National Standards Institute, Z15 Standard, Safe Practices for Motor Vehicle Operations

Examples of Standards Canada –Carrier Safety Management System (CSMS) standard UK –Corporate Responsibility / Driving for Work –Corporate Manslaughter and Corporate Homicide Act 2007 Australia –National Transport Commission

Sample Cases Legal Impact of Safety Performance

11/ Tidwell v. Kemper, et.al. N.E. lawsuit alleges: –Company entrusted their vehicle to Fink –Employer knew or should have known of issues, but allowed Fink to drive anyway. “Man pleads not guilty to hit-run” from the Monterey County Herald

11/ Tidwell v. Kemper, et.al. N.E. lawsuit alleges defendant driver : –had previous convictions for drunk driving in 1993 and 2006 –was participating in drug-treatment program after an arrest in 2007 –was driving on a restricted use license (allowed to drive to and from work location and to/from treatment program site) “Man pleads not guilty to hit-run” from the Monterey County Herald

January 8, 2009 Intersection collision outside of a truckstop (filling station) where the plaintiff alleges truck driver was negligent by: failing to keep a proper lookout, driving in a reckless manner, driving too fast, proceeding into an intersection without first determining whether it was safe to do so, failing to yield the right-of-way, failing to sound his horn, failing to slow down to avoid a collision, failing to obey traffic laws entering the intersection while he knew traffic was present. Madison-St. Clair, The Record, Jan 12, 2008

January 8, 2009 Further the plaintiff alleges employer was negligent by: failing to properly train its employees, failing to properly monitor its employees, failing to properly screen applicants in the hiring process to eliminate unqualified drivers, failing to provide proper equipment to its employees, failing to provide proper training to its employees, failing to properly supervise its employees failing to properly determine whether its employees were capable of safely operating trucks Madison-St. Clair, The Record, Jan 12, 2008

Bus Crash-Terrell, TX, 6/24/02 A chartered bus taking youngsters to a church camp crashed into the concrete pillar of an overpass, killing the driver and four passengers “…the families of nine victims have filed a lawsuit against the two bus companies involved in the trip and the company that owned the bus.” (Star-Telegram 08/06/02)

Bus Crash-Terrell, TX, 6/24/02 Per local NBC TV report - the bus driver was twice cited (previously) for driving 90 mph in a 60 zone. Also, the driver has had at least eight traffic tickets during the last three years for speeding, speeding in a school zone, driving the wrong way on a one- way street and for not having insurance

Bus Crash-Terrell, TX, 6/24/02 According to a news report on August 9, 2008: –A Dallas attorney won a $36 million verdict for one of the families in the 2002 crash that killed five and injured about twenty. Chron.com (Houston Chronicle, Houston, TX)

Sherman, TX – 8/2008 Motor coach accident occurred just after midnight, and may have been a result of a blown tire –Using a recapped tire is a violation –The driver’s medical cert was out of date –The company had a history of various violations (pattern) –17 deaths from this crash

$6.8 million jury award against KLLM The jury found that KLLM ignored its own standards when it hired Stuart Foy, the truck driver accused of causing the August 2000 accident Plaintiff counsel said Foy had: –8 preventable accidents and 6 moving violations in the three years before he was hired and –2 additional minor accidents and another 4 tickets in the months before the accident Foy’s previous driving record should have prevented him from being hired & his record after he was hired should have led to his being fired Reported in Land Line - 01/02/2003

Janesville, WI 3/25/99 Police attempted to stop a passenger van that was speeding The driver who had no valid license attempted to switch seats with a passenger while speeding down the highway The vehicle rolled, ejecting 12 passengers: –Passengers were aged 15 to 25 –None wore seatbelts –Seven were killed and five seriously injured

Janesville, WI 3/25/99 Driver pleaded guilty to vehicular homicide and was sentenced to seven years in prison Company was also charged with labor law violations as a result of crash Company was sued by families, continues to run crews of door-to-door sales people

Summary Anyone who is charged with driving should be carefully qualified Business practices should be in place and followed without exceptions Take corrective actions when needed Document your actions “Not knowing” is never an excuse or a defense