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IACCM Contract Management Forum

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Anonymous
2014-04-14 07:34:13

Workers Compensation - Service Provider Liability

We (Service Provider) have a specific situation. We are negotiating a Services Agreement with a Customer (firm) in South Africa.


As a standard practice we required the firm to give us an indemnity for their gross negligence leading to the injury or death of the our (Service Provider's) employee.


The firm refused stating that we (Service Provider) has cover under COIDA (Compensation for Occupational Injuries and Diseases Act) and the fund under this Act will pay for such compensation.

My query

- Can such an injured employee claim for compensation more than provided under COIDA ("Excess Ccosts")?

- Will we (Service Provider) be able to make a liability claim on the Customer firm (where their gross negligence is proved) for such "Excess costs" in the absence of such indemnity ?
 
 •   2014-04-14 13:26:33
Under Common Law principles, liability for personal injury or death cannot be excluded. So it most likely makes no difference whether or not the provision is struck because the customer could not deny their legal liability in the event of negligence leading to this form of loss.
 
 
 •   2014-04-15 08:14:35
What if there is an industry practise/custom to allow a party to exclude its liability even for its own negligence and it is being upheld by the court of law. What happens then?
 
 
 •   2014-04-17 10:58:42
I think that the second question goes to the difference between an indemnity and ordinary liability. Under general Common Law principles, the lack of an indemnity for a particular thing does not necessarily mean that a party won't be liable for that thing. The specific issue here is a legal question. It's probably worth a call to counsel so that you can be certain you will be covered in this circumstance. I see this as a different question than "excluding" liability for one's own negligence. Such clauses typically require clearing a higher legal hurdle.

All this said, I really do not understand why the customer would be so unwilling to indemnify for harm they caused. It's generally considered a reasonable commitment.
 
 
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