- Administrative Fund (transfer of costs)
- Apportionment (negligence)
- Transfer of costs
The accident employer appealed an ARO decision which concluded that claim costs should not be transferred to the cost record of another Schedule 1 employer, a business operating as a wholesaler ("the wholesaler"). The issue under appeal was whether claim costs should be transferred from the accident employer to the wholesaler's cost record.
The appeal was denied.The worker of the accident employer suffered a fatal accident, while wearing a self-retracting lifeline (SRL), which the wholesaler had purchased from a manufacturer located in a foreign country. The deceased was a worker in the course of his employment at the time of the accident. The accident employer and the wholesaler were Schedule 1 employers. OPM Document No. 14-05-01, "Transfer of Costs," provides guidance relating to the application of section 84 of the WSIA. It states, in common law, negligence is defined as: "failing to do something which a reasonable and prudent person would do, or doing something which a reasonable and prudent person would not do." The question for the Panel was whether the wholesaler acted as a reasonable and prudent person in sourcing the SLR, and in verifying that the device was fit for the purpose for which it was intended. The Panel found that the wholesaler was not negligent. The wholesaler had a licensed professional engineer perform independent testing on the pre-production sample and on a production sample. The Panel determined that the wholesaler sold a product which it reasonably believed met the Z259.2.2-98 standards at the moment of sale. While the Panel found that the SLR had some loss of tensile strength as a result of exposure to solar radiation, that deterioration occurred while in the possession and control of the employer, and the evidence showed that the employer was aware of the deleterious effect of solar radiation. In addition, the degree to which the device was subjected to solar radiation while in use was almost entirely in the accident employer's control, and was something that the accident employer, not the wholesaler, was in a position to monitor.The Panel then considered whether the wholesaler engaged in "negligent representation" which the wholesaler detrimentally relied upon. The Panel did not find that the wholesaler was negligent in its statements regarding compliance with the Z259.2.2-98 standard. This was determined to be a reasonable statement based on independent testing. The Panel found that the accident employer was aware of the distinction between the certification of a device by CSA, and a device which was held out to meet the CSA standard. By independently testing the samples through a licensed professional engineer, the wholesaler had acted as a reasonable and prudent person would. Consequently, the request for a transfer of the claim costs to the wholesaler's cost record was denied.