THE QUESTION OF FAULT AND PREVENTION OF ACCIDENTS COMPENSATION-GERMAN

STATISTICS.

TABLE NO. X.-Accident statistics of industries for the 3 years, 1887 and 18971 and 1907 under German law.

This table, covering a period of 20 years of experience, shows not only the elements of fault which enter into the problem, but also supplies a valuable basis for further improvements of preventive measures, since from 55 to 57 per cent of all accidents are due either to the fault of the employer, employee, or their combined negligence.

It is of interest in this connection that the tables of Minnesota and Wisconsin labor departments, which ascribe from 40 to 50 per cent of all industrial accidents, on the average, as due solely to the inevitable risks of the business. The Austrian tables show 70 per cent are attributable to this cause.'

It is first to be noted that this Table No. X represents the experience of the operation of the compulsory German State Insurance Law, for a period of 25 years, under the operation of which, from 4,000,000 to 21,000,000 workingmen engaged in all possible industrial, Governmental, and agricultural occupations of a great nation, with respect to the determination of the element of fault entering into the causes of accidents to workmen. We shall define the natural hazard of any occupation by the equation:

Inevitable risk+combined negligence of both employer and employee=natural hazard.

Observation 1.-During the period 1887-1897 there were put under the operation of the German law the workingmen employed in the occupations of agriculture, forestry, building trades, to the number of 12,500,000, who heretofore were not insured. This large class of workingmen were the most ignorant and poorest trained of all the workingmen insured under the law. You note that the per cent of the causes of accidents attributable to the negligence of the employee increased from 26.56 per cent in 1887 to 29.74 per cent in 1897, an increase of almost 3 per cent. During the next decade, 1897-1907, this element of fault fell from 29.74 per cent to 28.89 per cent, while the number of such workingmen remained practically at the 12,000,000 mark. This is due to a gradual improvement of the ways and means of preventing accidents so carefully studied in Germany.

1 Dr. George Zacher, Introduction to Workmen's Insurance in Germany.

2 Bulletin of Bureau of Labor, 1908, p. 120.

Report of the New York Commission, p. 25.

Frankel & Dawson's Workingmen's Insurance in Europe, p. 101.

The superior intelligence of the employers made a more marked improvement in the reduction of the element of fault due to the employer's negligence.

Thus the causes of accidents attributable to the employer in 1887 was 20.47 per cent; in 1897 it fell to 17.30 per cent; and during the next decade it fell to 16.81 per cent in 1907. But, notwithstanding these improvements in the reduction of the element of fault, yet the per cent of the causes of accidents due to natural hazard remains practically constant, as shown at 53.41 per cent. An analysis of the experience of foregoing millions of workmen under the operation of the compulsory state insurance in Germany for two and onehalf decades, 1883-1887, 1887-1908, with respect to the elements of fault of the employer, of the fault of the employee, and the inevitable risks of the business are given in Table No. X.

This leads us to the first fundamental conclusion of primary evidence in our problem:

That no matter how careful the employer is, or how careful the employee may be, or how high the efficiency of the State may rise in the application of ways and means in the prevention of accidents, the natural hazard remains practically constant. That on the average of from 52 per cent to 53 per cent of the cause of all accidents are due to the natural hazard of the business.

This is the first element of insecurity of workingmen under the modern wage system, for the reason that an injured workman can not recover at all in an action at law for damages on account of an accident received while working for his master until he can prove that his master was negligent and that that negligence was a contributing cause to his injury.

The object of giving an injured workman a cause of action for such injuries as are the subject of this paper is not only to compensate the workman (especially in the case of death or total disability), but principally to furnish some compensation to his dependents, who might become public charges when their means of support are cut off by such an accident.

The entire equity side of our court has been built up on the theory that justice should be done between man and man when the common law does not furnish any remedy or does not furnish an adequate remedy.

Here in this problem there is the one element alone of 52 per cent of all cases of injury which the common law does not presume to furnish any relief at all-none for the injured workman and none for the dependents who, in most of such cases, must be supported by the community in which they live. This leads us to the second fundamental conclusion of primary evidence in our problem.

Table No. X shows us that the element of the causes of accidents which are attributable to the workingmen's own negligence (taking the workmen of a State or nation as a whole) is on the average:

(26.56 per cent + 29.74 per cent + 28.89 per cent)=28.39 per cent.

The effect on dependents is just the same whether the cause of the injury was due to the negligence of the employee, to that of the employer, or to the natural hazard of the business. The common law in theory denies the injured workman relief in all of these cases, to wit, 28.39 per cent, and, further, there is no cause of action at all in the 53.41 per cent of the cases due to the natural hazard. Or in the combination of the two elements, natural hazard and negligence of the workmen, that is, in 81.80 per cent of the cases of injury, the common law does not presume to furnish any compensation either to the workman or his dependents.

The third conclusion of primary evidence in our problem relating to the economic insecurity of the workingman under the modern wage system in the United States is:

That the per cent of cases of injuries to workingmen, the causes of which are attributable to the negligence of the employer, is on the average (Table No. X) but 18.53 per cent of the cases. This is the third cause of the economic insecurity of workingmen under the modern wage system.

It is susceptible of proof that the foregoing elements of negligence of employer, employee, and natural hazard are practically the same in the United States as they are in Germany.

The discussion to immediately follow will show, in presenting the "Statistical experience of workingmen under the common law and liability laws in the United States," immediately below, that while in theory the common-law remedy furnishes compensation in 18.53 per cent of cases of injuries to workingmen,

that, however, in practice that compensation in any amount is paid in less than 6 per cent to less than 12 per cent of the cases, and then only in amounts about one-fifth of adequate compensation.

STATISTICAL EXPERIENCE OF WORKINGMEN UNDER THE OPERATION OF LIABILITY LAWS AND OBLIGATORY INDUSTRIAL INSURANCE (GERMANY).

Under our common law and that of England an employee injured in an industrial accident, being without fault and able to prove that his employer was negligent, can recover damages for his injuries.

The plaintiff can not recover, however, if the defendant an prove

(a) That the plaintiff's negligence contributed to the cause of the accident; or

(b) That the negligence of a fellow-servant contributed to the cause of the accident; or

(c) That the plaintiff assumed the risk, even though the defendant was negligent.

We now inquire, with what efficiency do the common-law remedies operate in compensating persons injured in industrial accidents?

We give the result of six investigations of wide scope, to wit:

I. The report of the Employers' Liability Commission of New York State.
II. The Pittsburgh Survey, six volumes, the Russell Sage Foundation, 1910.
III. Wisconsin Bureau of Labor and Industrial Statistics, report for 1909.
IV. The report of the Employers' Liability Commission of Illinois, 1910.
V. The report of the Employers' Liability Commission of Ohio, 1911.
VI. European experience, that of Germany in particular.

I. NEW YORK STATE.

During the years 1906, 1907, and 1908, 10 insurance companies, which keep employers' liability records, doing business in New York, received in premiums from

Employers

Paid to injured employees

Waste

$23, 524, 000 8, 560,000 114, 964, 000

Nothing could more strikingly set forth the waste of the present system. Only 36.34 per cent of what employers pay in premiums for liability insurance is paid in settlement of claims and suits. Thus, for every $100 paid out by employers for protection against liability to their injured workmen, less than $37 is paid to those workmen; $63 goes to pay the salaries of attorneys and claim agents whose business it is to defeat the claims of the injured, to the cost of soliciting business, to the cost of administration, to court costs, and to profit.

Out of this 36.34 per cent the injured employee must pay his attorney. The same report shows that the attorney gets 26.13 per cent of what is paid to the injured employee. This investigation covers 46 cases where the recovery was above $1,500 each. In small recoveries the attorney fees take a larger proportion. This report shows that not more than somewhere between 20 and 25 per cent of the money paid by the employing class goes actually into the pockets of injured workmen for their dependent families in death cases.'

II. PITTSBURGH SURVEY.

The investigation recently conducted in Allegheny County, Pa., under the direction of the Pittsburgh survey showed that out of 355 cases of men killed in industrial accidents, all of whom were contributing to the support of others and two-thirds of whom were married, 89 of the families left received not more than $100, and 61 families received something more than this $100. In other words, 57 per cent of these families were left by their employers to bear the entire burden of income loss; and granting that all unknown amounts would be decided for the plaintiffs, only 26 per cent received in compensation for the death of a regular income provider more than $500, a sum which would approximate one year's income of the lowest paid of the workers killed.

1 First report of the Employers' Liability Commission of New York, p. 31.

The proportion of the loss borne by employers in injury cases does not differ greatly from that in death cases.

Thus, out of 288 injury cases, of the married men alone, 56 per cent received no compensation; of single men contributing to the support of others, 69 per cent received no compensation; of single men without dependents, 80 per cent received no compensation.

III. WISCONSIN BUREAU OF STATISTICS.

The great financial losses borne by the workmen are set forth by the Wisconsin bureau of labor and statistics in the following report of 306 nonfatal cases of injuries:

In other words, we may say that in two-thirds of the cases part or all of the doctor bills were paid, but in less than one-third was anything more paid, and in about one-fourth of the cases nothing whatever was paid.

Of 131 nonfatal cases in Wisconsin, concerning which reports were secured by factory inspectors, the following disposition was made:

The employers' liability commission of the State of Illinois has recently made a report of its investigation of industrial accidents and employers' liability at a cost of $10,000. I give you a condensed statement of the results of the investigation of the Illinois commission in the language of Edwin R. Wright, secretary of the commission.

More than 5,000 individual accidents were investigated and recorded, together with comparative figures and analysis. A few words as to what the report shows may be of value:

Six hundred and fourteen fatal accidents are recorded.

The families of 214 of these workers received nothing in return for the loss of the breadwinner.

One hundred and eleven damage suits are pending in court.

Twenty-four cases have been settled through court proceedings.

Two hundred and eighty-one families settled direct with the employer. Skilled railroad employees, in settlement for death claims, averaged about $1.000; steel workers, $874; railroad laborers, $617; skilled building tradesmen, $348; skilled electric railway employees, $310; unclassified workmen, $311; miscellaneous trades, $292; packing-house employees, $234; general laborers, $154; mine workers, $155; electric railway laborers, $75; teamsters, none; building laborers, none.

A further summary may be offered. Of every 100 industrial accidents, 15 go to court-7 are lost and 8 win. Ninety-two injuries out of every 100 receive bo compensation. This includes both fatal and nonfatal accidents.

Another interesting feature is this: A thorough search through the record reveals 53 fatal cases of recent date. In fatal cases the usual defenses of the employer-the fellow-servant doctrine, assumption of the risk, etc.-did not apply or there would not have been a recovery at all.

For these the very pick of industrial cases—the average recovery for death was only $1,877.36. Of this an average amount of $750.95 was paid to attorneys or expended in court fees, etc., leaving an actual payment of $1,126.41 to the family of the dead worker. Thirty-four widows were compelled to seek employment and 65 children left school to help keep the wolf from the door.

V. OHIO STATISTICS.

We next give the results of the investigations of the economic effects of industrial accidents on workingmen and their dependents, for the period 19051910, in Cuyahoga County (Cleveland), Ohio, both for fatal and nonfatal accidents, by the Employer's Liability Commission of Ohio, under the direction of James Harrington Boyd, chairman, and Emile E. Watson, investigator in chief. TABLE I.—Per cent receiving settlement in fatal cases.

A settlement was made with the dependents in 36 per cent of all the cases, and in 42 per cent of those in which the decedent left a widow. In practically all of these cases an amicable settlement was made with the representative of the deceased, appointed by the probate court, either out of court in the first instance or after the institution of a suit.

THE AVERAGE amount reCEIVED IN SETTLEMENT.

An examination of 285 fatal cases proved that the average amount paid per case was $838.61. In 176 of these cases the decedent left a widow, and the average settlement was $1,056. The exact figures are given in table No. 2 below: TABLE II.-Average amount received in death cases.

The amount received varied from funeral expenses to $5,000. In the case of the dependents of 109 single workingmen killed, the average amount received was $485.87.

1 See Report of the Employer's Liability Commission of Ohio, Pt. 1, pp. xxxv-xliv.