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| Craig Livingston |
Craig Livingston is a shareholder in Livingston Law Firm in Walnut Creek, Calif., where he specializes in representing equipment manufacturers and rental companies in defense of personal injury claims. He is a frequent lecturer and author in this area and is an active member of the Defense Research Institute, the International Association of Defense Counsel, and the Product Liability Advisory Council. You can contact Craig at clivingston@livingstonlawyers.com .
August 17, 2005 — In today's “who-can-I-blame” society, where no one wants to take responsibility for his own mistakes, lawsuits are a fact of life for equipment rental companies. These lawsuits can pose a significant drain on the resources of such businesses because the attorneys' fees and costs associated with defending personal injury litigation often come directly off the bottom line. Even when the litigation is paid for by an insurer, there may be very real back-end costs to numerous claims or suits • or worse yet, a sizeable adverse judgment, which comes in the form of higher premiums for future insurance coverage and the value of company personnel time consumed in the litigation process. From a business standpoint, it is critical to prevent as many claims as possible. And for those claims that are inevitable, legal counsel must be presented with the necessary facts to deliver the strongest defense. Rental companies can accomplish this several ways.
What is rental company negligence?
Though often named in product liability lawsuits against equipment manufacturers on the theory they are in the “chain of distribution” of the allegedly faulty product, most suits against rental companies of any size are based on a claim of “negligence.” As jurors are told in courts in California and elsewhere, “Negligence is the failure to use reasonable care to prevent harm to oneself or to others.” Negligence can be based on an affirmative act, such as driving a slab scissor lift into a concrete floor cut-out, or on a failure to act, such as failing to properly maintain a piece of equipment. Because a company is judged by the actions or inactions of its employees — whether they be mechanics, delivery persons or other workers — it's important that all rental company personnel appreciate the significance of their conduct on the job. To find a rental company negligent in court, the judge or jury will have to conclude that its conduct fell below the “standard of care” in the equipment rental industry. What, then, is the standard of care, and how can rental companies ensure their conduct will meet or exceed it?
To establish the “standard of care” in a trial, both sides typically offer the testimony of expert witnesses as to what is commonly done in the industry. The expert for the plaintiff will offer his or her opinion as to what is customary with, for example, the training of rental customers. That expert will then likely argue that the rental company defendant's conduct fell below that established “standard of care” and was therefore negligent.
The expert for the rental company will offer his or her opinion on the standard of care and will then typically testify as to how the company's conduct met or exceeded the standard. As the finders of fact, the judge or jury will then decide if the defendant's conduct indeed met or exceeded the standard of care and, if not, find that there was liability.
ANSI standards set the “standard of care” for rental companies
In the aerial equipment rental industry, ANSI standards are widely accepted as creating the standard of care for rental companies, they apply whether you have one or hundreds of aerial work platforms in your rental fleet. Indeed, these consensus standards clearly set forth actions to be taken by dealers relating to such things as maintenance procedures, pre-delivery preparation, customer training and the documentation of these activities. Barris Evulich, P.E., of Evulich & Associates Engineering Consulting Services in Kingsburg, Calif., perhaps puts it best when addressing the significance of ANSI standards in the standard of care analysis: “Those sections in the ANSI standards applicable to dealers, owners and users, do more than create the ‘standard of care' in the industry in a civil lawsuit, they are really a way of doing business.”
For example, ANSI A92.6 -1999 sets forth the responsibilities of companies renting self-propelled elevating work platforms. Section 5 of that standard, entitled “Responsibilities of Dealers,” includes specific requirements for such things as the retention and maintenance of operating and maintenance manuals (Sec. 5.2.1), pre-delivery preparation (Sec. 5.3), machine maintenance and repair (Secs. 5.4 • 5.6), and operator training and familiarization (Secs. 5.7-5.8). Thus, rental companies that are not thoroughly familiar with these provisions, or choose to ignore them, are significantly increasing their risk in the event of a future negligence suit.
How to exceed the “standard of care”
Experience in defending rental companies has shown that several areas of ANSI compliance present the greatest risk management challenges for dealers of every size. First, rental yard mechanics must ensure that the equipment is regularly inspected and properly maintained • always in compliance with the manufacturer's recommendations. Every piece of aerial access equipment made today is accompanied by a manual that contains maintenance recommendations and schedules. These must be followed without deviation. With respect to replacement parts, Section 5.6 of ANSI A92.6-1999 requires that they “shall be identical or equivalent to original aerial platform parts or components.” Indeed, in the event a less expensive, sub-standard part fails — and is later determined the cause of an accident — it will be difficult to escape a finding of negligence liability.
Also, dealers must refrain from making any modifications or alterations to an aerial work platform without “prior written permission of the manufacturer,” as noted in ANSI A92.6-1999, Sec. 5.12. Thus, the rental company “shade tree mechanic” who decides to make unauthorized changes to a machine is not acting reasonably when viewed against the backdrop of the ANSI standards.
Second, pre-delivery preparation of the equipment must be thorough and well-documented. Often times, in the rush to get a lift loaded on the trailer and out to the job site, this inspection is given short shrift. However, this is usually the last best chance to catch operational problems that can be corrected at the yard before the equipment is turned over to the rental customer where an accident can later occur. A detailed pre-delivery checklist will help ensure this inspection covers all of the important areas. Equally important, however, the checklist can later become a very helpful piece of evidence for defense counsel, trying to show how the company's conduct met or exceeded ANSI.
Third, equipment familiarization and training is essential and must be well documented. History has shown that virtually all aerial equipment accidents are the result of misuse in one form or another, and proper training • if followed • could have prevented most accidents. Once again, however, the desire to get machines out on rent as quickly as possible can result in shortcuts during the familiarization process. Rental companies must effectively deal with the tension created in this aspect of their businesses. Moreover, all familiarization and training provided must be well-documented • usually through the use of printed information and acknowledgment boxes on rental contracts • to comply with ANSI and provide evidence of this “reasonable conduct” in future litigation.
The bottom line
Like it or not, ANSI provisions are commonly used in personal injury lawsuits throughout the country to determine whether rental companies have met or exceeded the “standard of care.” If the evidence demonstrates that ANSI was followed, it will be very difficult for a plaintiff to prove negligence. Unfortunately, the converse is also true. As a result, aerial equipment renters must do everything possible to ensure their machines are inspected and maintained in conformance with the applicable ANSI provisions, and that rental customers, as well as their own employees, are given the required safety information for a specific piece of equipment — not to mention properly trained in its safe operation and use. While this may be easier said than done, compliance with ANSI will go a long way toward reducing risk in future claims and negligence lawsuits.
