"What this means in practical terms is that everyone who works for you probably should have some training in how the distribution system works and how to spot at least basic defects or problems so they can report them to your service department."

By R. Bruce Wright, CPCU

As we visit cooperatives in the Hurtado & Associates Utilities program our consultants typically inquire about what type of training program is used to educate all employees on how to identify and report hazards or defects that they may observe in the course of their daily activities, both on the job and while off work. While many participants do make an effort to provide this training, others do not, and some that have training programs do not include the entire staff, typically excluding their office employees. We think that training all of your employees on how to spot and report hazards around your system is an important part of a loss prevention program. This article is an effort to explain why we think so.

Some background in the legal doctrine of "constructive notice" may be a good place to start. Since I am not an attorney, this will be a layman's explanation and I will try to avoid using obscure legal language.

We probably all can figure our what "direct notice" is; direct notice is when you actually see a hazard or problem yourself, or someone tells you directly about the hazard or problem, putting you on notice immediately. Constructive notice is a more slippery concept. It occurs when the hazard or problem is either so open and obvious, or it clearly existed long enough, that you could have and should have become aware of it through observation. As a rule, if virtually anyone (regardless of their technical knowledge or experience) could have seen that there was a problem, it will be considered open and obvious. In cases that reach the legal system, a jury will use its collective judgment, based on evidence presented by both parties, to decide if something was sufficiently open and obvious or if it existed for sufficient time that a "reasonably prudent person" could have been expected to see it. In either case, the court may find there was "constructive" notice and the fact that you never had "direct" notice of the hazard is no longer a defense. It becomes a matter of, "Hey, maybe you didn't know, but the problem was so obvious or was there so long, you should have known!"

The phrase about a "reasonably prudent person" isn't easy to define in every case and is often left up to the judgment of the court itself. The concept of what is reasonably prudent usually entails the court's assessment of what degree of knowledge the person has. Obviously, a normally prudent person who knows that, for example, tree branches in contact with overhead power lines could cause a problem would be expected to act on the observation before someone gets hurt. Thus, what is prudent for employees of the electric distribution company who pass by that tree every day may be quite different than what is prudent for the person who actually lives on the property but does not have, and would not be expected to have, knowledge of the danger. The jury (or the judge in a non-jury proceeding) will decide what a "reasonable prudent person" could have and should have seen as it relates the specific case being considered.

While you likely expect your field employees (linemen, foremen and supervisors) to possess a high degree of knowledge about the technical aspects of your distribution system, you may not expect your office clerical staff to have any special knowledge of the system. However, members of the general public (who make up the pool from which jurors are selected) often believe that anyone who works for you surely must have a greater understanding of the issues involved in electrical transmission or distribution systems than would members of the general public. (Actually, you can test this concept by asking some of your non-technical staff if they ever get questions about electricity or power distribution from their neighbors at the grocery store, in church, and in other private activities.) What this means in practical terms is that everyone who works for you probably should have some training in how the distribution system works and how to spot at least basic defects or problems so they can report them to your service department. An example or two may help illustrate this point.

Years ago, when I was a claims manager for an insurance company that had distrbution utility clients, I handled a couple of cases that hinged on jury decisions on constructive notice. One involved a case where a co-op member was building an addition to an existing warehouse. This addition extended the building toward the road and brought it close to a 7,200 volt distribution line. Line clearance was well within code at the existing building, but the addition brought the new section to within a few feet of the distribution line. As you may have guessed, one of the workers up on the roof of the addition came in contact with the line while installing rain gutters and was badly burned. For a variety of reasons, including the fact that no direct notice of the construction had been given to them, we agreed with the utility that we would defend the claim. During the depositions, the plaintiff's attorney subpeonaed one of our client's clerical staffers as a witness. He asked her to tell the court how long she worked at the utility (several years) and where she lived. Then he asked her what route she took when she drove to work. As it turned out, she normally drove a route that took her past the site where the accident took place. Her testimony revealed that she had driven past the construction site every day on her way to and from work during the time the addition was being built. The plaintiff's attorney had established a clear case of constructive notice. He showed that a utility employee easily could have seen it, should have seen it, and as an employee of a utility she should have more knowledge of the dangers of contact with electrical distribution lines than the general public, and should have reported the situation to management. He said that the open and obvious nature of the construction work provided "constructive notice" of the situation. We realized we had to shift gears and try to negotiate the best settlement we could.

Another claim involved a young man who was killed while riding a "dirt bike" motorcycle off-road along a right-of-way when he contacted a low hanging line. The investigation determined that someone had shot the insulator which then failed, allowing the line to sag to within 4 feet of the ground. A neighbor was located who said that the line had been that way for 10 days, but that she had forgotten to call and tell someone. The attorney for the dead man's family subpoenaed the utility's records to find out how many cases of "shot-out" insulators they had experienced in the past 5 years. It turned out that there had been dozens of such events that had occurred and been repaired in that time. Even though there was no testimony that any employee had been down this particular county road during the time the line was determined (through testimony) to be sagging, he told the jury that the utility knew that people shot at their insulators in the past, and its employees could have and should have looked for and seen the low line. He further offered that the history of shot-out insulators meant that they should have known of the possibility of this hazard and taken steps to prevent it, such as using bullet resistant insulators or doing regular line patrols. He stated that the combination of the history of these events and the open and obvious danger of this low hanging line amounted to "constructive notice" to the utility. The jury agreed, and a large settlement was paid to the family.

Many other cases could be used as examples. You may even know of a situation in your area that is similar to these.

So, what can you do to protect the public and yourselves from these situations? Well, I believe that you should have a training program for hazard identification that includes your entire staff, including "inside" or office workers. The training should be offered at least annually, and made a part of every new employee's orientation program. As the examples show, in the eyes of the general public, simply being an employee of a utility gives all members of your staff an expected level of expertise beyond that of most people, and as a result you need to be sure that everyone you employ can recognize, and knows how to report, any open and obvious hazard on the system.

Look, the good news here is that finding and fixing problems on your system is good business anyway. The more astute to system problems and hazards your entire employee group is, the more likely you will identify and repair problems before something bad happens or the cost of repairs gets bigger. I'm not trying to suggest you should train everyone on your staff just to be able to provide a better defense in a courtroom. The training I'm suggesting has direct operating value to your system.

Of course, should a problem occur as a result of an open and obvious defect that any of your employees could have or should have seen and reported, and you have not made the effort to train your entire staff in how to spot and report these problems, you may be surprised to learn just how much expertise a jury might expect even your clerical people should have!