Scottish Court of Session Decisions

Benjamin Wright raised an action in the Sheriff Court at Kirkcaldy against Howard, Baker, & Company, contractors, Auchter-tool, for £300 at common law, or otherwise for £163, 16s. under the Employers Liability Act 1880, as compensation for injuries which had been received by him, while in the employment of the defenders, by the fall of a bank of earth upon him in a cutting.

The defenders lodged defences, and averred that the pursuer entered their employment under certain conditions which were specified in a notice or bill posted at various parts of the defenders' works, and of the terms and conditions of which the pursuer was fully aware.

The notice was in the following terms:—“Notice to Workmen — Accident Insurance.—We have effected an accident insurance for the benefit of workmen in our employment. The scale of contributions therefor is as follows, viz.—Where the wages do not exceed 20s. per week, 1 1 2d. per week; where the wages are above 20s. and do not exceed 30s. per week, 2d. per week; where the wages are above 30s. per week, 2 1 2d. per week. Contributions at these rates will, for the convenience of contributors, be deducted from their wages at the weekly or fortnightly pays. The following are the benefits to be derived from the insurance—(1) If any workman in our employment, paying the above contributions, shall sustain personal injury caused by accidental external and visible means, while engaged in our work, and the direct effect of such injury shall occasion his death within three months after he has sustained such injury, the legal representatives of such workmen shall (providing no claim is made under the Employers Liability Act 1880, or at common law) be entitled to receive one year's wages, with a limit of £60, which sum shall be in full satisfaction of all claims in respect of such injury. (2) If the injury so sustained be not fatal, compensation shall (providing no claim be made, as aforesaid, under the Employers Liability Act 1880, or at common law) be paid to such workman at the rate per week of one-third of the week's wage being earned by him at the date of disablement, so long as he remains totally and absolutely incapacitated from attending to work of any kind in consequence of such injury; but the period during which such compensation is payable shall not exceed 26 consecutive weeks for any single accident. (3) All sums paid as compensation to any workman during any one year ending 31st December shall be accounted as in reduction of the total compensation payable as above provided, so that in case of subsequent injury, whether fatal or not, during the same year, the total amount payable shall not exceed the amounts above provided, and all compensation paid while any workman is disabled by injuries which prove fatal shall be deducted from the sum payable in case of death. When an accident happens by which any workman is killed or injured full information as to the nature of the accident and of the injuries sustained must be sent to our office within 24 hours after its occurrence, and a medical certificate by the doctor appointed by us must be produced to us when any payment or allowance is asked for. Note.—The above benefits are payable only when the workman has no claim against the employer either at common law or under the Act of 1880, and his acceptance of the benefits hereby provided for shall be equivalent to a discharge of these and any other claims against the employer. The workman has no direct claim against the insurance company. No claim for compensation or aliment will be recognised unless these rules are strictly complied with.—Howard & Co., Seafield Dock and Railway Works, 14th February 1890.”

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The defenders further averred that after the accident the pursuer on 3rd October 1892 sent his father to the office for the compensation money under the insurance contract, and that from that date down to 30th January 1893 the pursuer's father had received on his son's behoof various sums to account of the insurance money amounting in all to £5, 17s.

The defenders pleaded, inter alia—“(1) The pursuer having accepted the insurance money, is debarred from raising any action, either at common law or under the Employers Liability Act of 1880; this action is therefore irrelevant, and should be dismissed.”

A proof was taken in the case before the Sheriff-Substitute ( Gillespie) on 23rd March 1893. The facts proved sufficiently appear in the interlocutor and note of the Sheriff-Substitute.

On 8th April 1893 the Sheriff-Substitute pronounced the following interlocutor:—“Finds in fact that the defenders effected an insurance against accidents for their workmen, the premium being paid partly by sums deducted from the workmen's wages, and partly by a contribution from the defenders themselves: That printed posters, headed in large type ‘Notice to Workmen — Accident Insurance,’ were posted on the pay-box and other conspicuous places about the works, one of the benefits set forth in the notice being a weekly allowance payable to a workman injured in the work: That acceptance by a workman of the benefits thereby provided was declared to be equivalent to a discharge of his claims against the employers either at common law or under the Employers Liability Act: That the contents of the notice were well known to the men employed by the defenders, and the subject of frequent discussion: That on 26th September the pursuer was injured by an accident while in the defenders' employment: That the pursuer, in the knowledge of the conditions of the insurance scheme above mentioned, accepted the weekly allowance under it, and received sums amounting to £5, 17s.: Finds in law that he thereby discharged the claims sued for: Assoilzies the defenders, and decerns,” &c.

“ Note.—The question now before the Court is, whether the claims which the pursuer might otherwise have had, have been discharged by the pursuer by his acceptance of the insurance benefits in lieu of his legal claims.

There is no averment that the insurance fund is a trap, or that the men as a whole do not get a fair equivalent for their contributions, and the discharge of their legal claims in the shape of an accident allowance, even though a small one, which is given, not only in cases when the employers would be liable, but in the far more numerous cases where the employers would not be liable. It was not disputed,—and after the decision in Griffiths v. Earl of Dudley, June 16, 1882, L.R., 9 Q.B.D. 357, could hardly be disputed—that a contract to exclude the operation of the Act is valid—‘With regard to the form which these contracts should take, it would seem that the workman will be bound by printed regulations or conditions of service, if they be brought to his knowledge, either by being posted up in the works or by some other means, and the posting up would at least constitute cogent evidence of a contract based on these terms.’ This statement, taken from an English treatise on the duty and liability of employers, by Messrs Roberts & Wallace, 3rd ed., p. 465, is in the opinion of the Sheriff-Substitute equally applicable to Scotland. The underlying principle seems to be that actual knowledge may be inferred as a fact from reasonable means of knowledge, and inferred against the bare denial of the party whose interest it is to assert ignorance—See Pollock on Contracts, 3rd ed., p. 47 note, and an apposite passage in Ulpian which he quotes.

[The Sheriff-Substitute here stated that although the pursuer never personally came in contact with the defenders' officials after the accident, yet the pursuer's father was in the practice of calling at the defenders' office and drawing the insurance allowance due to his son, and had reported to the defenders that his son was quite satisfied with the insurance money, and that no action would be brought against them.]

It is of course possible that Wright senr. invented this statement without any authority from his son. Therefore it cannot be affirmed with absolute certainty that the pursuer was expressly told after the accident that acceptance of the insurance allowance would bar legal proceedings. Nor can the Sheriff-Substitute altogether adopt the view of the defenders' agent that the defenders were entitled to deal with Wright's father as his representative. He was his son's agent to the extent of being empowered to receive the money, but it is disputable whether his agency went further.

But although there is not in Wright's case direct proof of his being expressly put to his election after the accident between the insurance money and his chances at law, the facts and circumstances are sufficient to infer his discharge of his right of action. In Griffiths' case nothing passed between the injured workman or his representatives and the employers after the accident. The contract to discharge the claim under the Employers Liability Act was inferred from the posting up of notice similar to that in the present case, coupled with evidence that Griffiths saw and commented on the notice.

Wright had been nine or ten months altogether in the defenders' employment. He seemed a man of at least average intelligence, and he can read and write. He admits that he understood that there was a sick and accident fund for which a deduction was made from wages. He also admits, though he was at first disposed to deny it, that he sometimes got his pay at the pay-box. If he had said he had not taken the trouble to read the notice to workmen posted up there, the question would have arisen whether he was not put

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on his inquiry. Probably for this reason he is not content with saying that he did not read the bill, but asserts—‘There was no bill at all posted up on the pay-box that I saw. If it had been there I would have seen it, and I could have read it too.’ Now, in the opinion of the Sheriff-Substitute, it is proved that the bill was there, and Wright only discredits himself when he denies its existence.

There is nothing that workmen regard with more watchful jealousy than deductions from their wages, and it would be strange if a workman did not insist on knowing all about why a deduction was made. This would inevitably bring up the insurance fund and the conditions on which workmen were admitted to its benefits, and the notice in which these conditions were expressed. Moreover, there had been numerous accidents at the works, and this must have made the subject of the accident fund a familiar one among the workmen; so that the inference from the posting of the notice to workmen that its contents were known to a man who could read is greatly strengthened by a consideration of the whole circumstances, while Wright's denial that he knew of its contents has its weight lessened by his denial that there was any notice at all posted up on the pay-box that he could see. Thus when Wright came to receive his weekly allowance after the accident, it cannot be taken off his hands that he was ignorant of the nature and origin of the weekly allowance which he received, and of the terms on which it was paid.”

The pursuer appealed.

At advising—