ON TRACK WITH RAILWAY CLAIM SERVICES, Inc.

Volume 12 Issue 4 October 2005

RAILWAY CLAIM SERVICES, INC. Our 18th Year of Service

BACKGROUND CHECKS

HIGHWAY-RAIL GRADE CROSSING FATALITIES AND TRAIN ACCIDENTS SHOW DECLINE

EMPLOYMENT TRENDS

NUMBER OF TORT TRIALS SEE BIG DECLINE

IN CASE OF EMERGENCY

RAILROADS SET EMPLOYEE SAFETY RECORD IN 2004

CONTRIBUTIONS NOT ENOUGH TO PAY ASBESTOS CLAIMS

JUDGMENT AGAINST STATE FARM OVERTURNED

RAILWAY CLAIM SERVICES, INC. WEBSITE

FROM EMPLOYEE EVALUATIONS

HAND-HELD INFRARED CAMERA DETECTS HIDDEN DAMPNESS

HURRICANE NUMBERS

POINTS OF LEGAL INTEREST

RCSI INFORMATION

BACKGROUND CHECKS & 49 CFR PART 172

Railway Claim Services, Inc. (RCSI) can perform background checks for potential job applicants. RCSI can also check injury histories for employees. For further information contact Elizabeth Vineyard of RCSI at 731-967-1796, or via email at evineyard@railway-claim-services.com.

Background checks are required for new employees under the Haz Mat Security Plan implemented by CFR Part 172, Hazardous Materials: Security Requirements for Offerors and Transporters of Hazardous Materials. This rule states in part, “No later than the date of the first scheduled recurrent training after March 25, 2003, and in no case later than March 24, 2006, each hazmat employee must receive training that provides an awareness of security risks associated with hazardous materials transportation and methods designed to enhance transportation security”.

If your railroad has not yet implemented 49 CFR Part 172, Railway Claim Services can assist.

HIGHWAY-RAIL GRADE CROSSING FATALITIES AND TRAIN ACCIDENTS SHOW SIGNIFICANT DECLINE DURING FIRST HALF OF 2005

The safety performance of the nation's railroads improved during the first half of 2005 as the overall number of rail-related accidents and incidents declined by 12 percent, according to preliminary data issued by the Federal Railroad Administration (FRA).

Statistics compiled over the first six months of 2005 show that, when compared to the first half of 2004, train accidents have declined by 10.1 percent, highway-rail grade crossing incidents are down 9.1 percent, and the number of people killed as a result of train-vehicle collisions at grade crossings has dropped by 11.7 percent. In addition, railroad employee injuries fell by 16.3 percent. However, the number of trespassers struck and killed by trains increased by 13 percent during the same six-month comparison period.

Rail safety statistics can be found on the FRA web site at www.fra.dot.gov .

EMPLOYMENT TRENDS

In October 2005 The Railroad Retirement Board Railroad said the employee count is back on track. RRB said that railroads’ employee recruitment efforts, spurred more than a year ago by traffic growth and a large number of retirements, are paying off. Rail industry employment continued to grow during 2005’s first six months, according to Railroad Retirement Board data.

As of June’s end, railroads employed 234,000 people — the industry’s highest figure since 2001’s end. The board recorded 227,000 employees in June 2004; 228,000 in December 2004; and 223,000 in December 2003.

NUMBER OF TORT TRIALS SEE BIG DECLINE

WASHINGTON—The number of tort trials concluded in U.S. district courts fell by 79% between 1985 and 2003, according to report released Wednesday by the U.S. Department of Justice's Bureau of Justice Statistics.

The bureau found that 768 tort cases—primarily involving personal injury—were decided by trial in U.S. district courts in 2003, the most recent year for which statistics are available, compared with 3,604 such cases in 1985-the peak year to date.

The bureau notes that "the growing use of alternative dispute resolution is frequently cited as primary contributor to the falling trial rate," adding that the Administrative Office of the U.S. Courts reported that in 2002, mediation and arbitration programs were used in more than 25,000 civil cases.

In addition, the bureau said, "Other legal scholars have speculated that the increased complexity and costs inherent in taking a case to trial have contributed" to the drop.

Looking at fiscal years 2002 and 2003 together, the bureau found that plaintiffs won in 47.7% of the trials. The estimated median monetary award to plaintiffs who won in all types of cases was $201,000.

"Although judges found for plaintiffs more often than juries, the estimated median damage award was higher in jury ($244,000) than in bench ($150,000) tort trials," the bureau found.

IN CASE OF EMERGENCY

Sometimes you come across an idea and just want to slap yourself in the head for not thinking of it yourself. One such idea is I.C.E. That is the acronym for In Case of Emergency. The idea is the brainchild of a British paramedic, who was reflecting on some of the calls he had attended at the roadside where he had to look through the mobile phone contacts struggling for information on a shocked or injured person. It was almost impossible to determine who should be contacted in case of emergency. The paramedic proposed that people enter their emergency contact under the contact name I.C.E in their mobile phone. This idea has caught on in Great Brittan and is now taking root in the United States. It really could save your life, or put a loved one's mind at rest. For more than one contact name I.C.E.1, I.C.E.2, I.C.E.3 etc.

As a side note, the internet is filed with misinformation as you are aware. Some people have begun to circulate hoaxes regarding I.C.E. stating that personal information can be stolen by people using this program. This is untrue. For further information, check http://www.snopes.com/crime/prevent/icephone.asp

RAILROADS SET EMPLOYEE SAFETY RECORD IN 2004

WASHINGTON - Association of American Railroads President and CEO Edward R. Hamberger Employees announced the nation's railroads reported their lowest employee casualty rate in history during 2004.

Hamberger said that last year's employee casualty rate was nine percent lower than it was in 2003, when the previous record was set. Hamberger attributed the improvement to "a lot of dedication and hard work by the railroads and their employees. At its heart, safety is about those people who operate trains, maintain and repair tracks and signals, dispatch trains and maintain the industry's 21,000 locomotives and 1.3 million freight cars."

CONTRIBUTIONS NOT ENOUGH TO PAY ASBESTOS CLAIMS

The Congressional Budget Office recently said the asbestos litigation reform bill now before the U.S. Senate is likely to add to the federal budget deficit over the next 10 years, and contributions into the fund are unlikely to be adequate to pay all claims. The revenue collection stream that would be generated by the legislation is “highly uncertain,” the CBO added.

The American Trial Lawyers Association immediately jumped on the report, saying that it “confirms the fundamental flaws with the proposal that victims, public health experts, independent claims analysts and senators on both sides of the aisle have been pointing out for months.”

Julie Rochman, an American Insurance Association representative, pointed out a comment in the report that the ability to estimate the value of claims made on behalf of individuals who are truly sick from asbestos is “a somewhat inexact science.”

The CBO estimated in the report that, in the first 10 years, the fund would have to borrow almost $8 billion to meet injury claims because more than half of all anticipated claims would come in that initial period, outstripping industry contributions.

The CBO estimated the fund would increase projected budget deficits over the 2006-2015 period by about $6.5 billion, excluding borrowing costs, because payments and other costs over the first 10 years of the fund would be $70 billion, while contributions would be $63 billion.

However, the bill is being backed by the White House, and Senate Majority Leader Bill Frist, R-Tenn., met with insurance and defendant company officials before the August recess to ask them to help him get it through the Senate.

RAILROADS CONTINUE TO BREAK NEW GROUND

Thieves in Austria nearly derailed a passenger train after pushing a 15 kilogram stolen safe on to the track in the hope a speeding locomotive would smash it open, Austrian police say. A spokesman for the local police near Bregenz, west Austria, says the force of the collision had indeed opened the safe, "but nearly all the money was thrown out and the perpetrators had to flee". "The locomotive was very badly damaged and there was nearly a derailment," Michael Haider said. The safe, which contained about $6,000, had been stolen during a raid on a local business shortly before. Rene Zumtobel, a spokesman for the national railway OBB, said it was the first time a train had been used to open a safe in the history of the country.

JUDGMENT AGAINST STATE FARM OVERTURNED

The Illinois Supreme Court decision overturned class action law suit of (Avery v. State Farm) which resulted in a $1.1 billion damage award class action lawsuit against State Farm.

Insurance organizations said the decision had wider ramifications for other insurers. The Avery case trial court certified it as a class action despite arguments from State Farm's attorneys that it failed to qualify because of differences in policies and consumer protection laws from state to state.

The high court agreed that the differences between the policies and applicable consumer protection laws were too great, stating in its opinion that "it was an abuse of discretion for the circuit court to certify plaintiffs' breach of contract claim as a class action."

Robert Detlefsen, public policy director for the National Association of Mutual Insurance Companies, applauded the court's ruling against the class action but noted the effects of the lower court's erroneous decision. “It’s wonderful that the Illinois Supreme Court has declared that the Avery case should not have gone to trial nearly six years after the trial court’s decision,” Mr. Detlefsen said. But, he added, “it’s appalling to think that in the meantime, State Farm was forced to spend millions of dollars defending itself from what was essentially an illegitimate lawsuit. Because State Farm is a mutual company, those dollars came directly from the pockets of its policyholders."

Mr. Detlefsen said that the ruling should also serve as a call for lawmakers to change state class action laws so that decisions to certify a class could be challenged more swiftly and allow defendants to avoid the severe costs involved.

RAILWAY CLAIM SERVICES, INC. WEBSITE

Railway Claim Services, Inc. maintains a website containing useful information for our industry. If you haven’t visited our website recently, you may have missed some of the content recently added.

The Code of Federal Regulations, TITLE 49—Transportation, Subtitle B--OTHER REGULATIONS RELATING TO TRANSPORTATION, CHAPTER II--FEDERAL RAILROAD ADMINISTRATION, DEPARTMENT OF TRANSPORTATION. Please visit our website and click on the following link. http://www.railway-claim-services.com/waycar.htm

Railway Claim Services’ website has the complete General Code of Operating Rules posted for your reference. http://www.railway-claim-services.com/safety_first.htm

RCSI also has the entire test of the FELA posted on our website: http://www.railway-claim-services.com/waycar.htm

Also, The Occupational Safety & Health Act of 1970 is available at: http://www.railway-claim-services.com/waycar.htm

As a part of our ongoing efforts to provide RCSI clients with information vital to the safe and efficient operation, RCSI’s website contains the complete text of the Emergency Response Guidebook: http://www.railway-claim-services.com/waycar.htm

RCSI is always trying to upgrade our website and make it a place for you to find the information you need. If you have any suggestions, comments, or questions, please feel free to contact me at your convenience. We appreciate your feedback.

FROM EMPLOYEE EVALUATIONS (These were NOT from the rail industry, but we thought you might recognize someone herein.):

This employee should go far………and the sooner he starts the better.

A gross ignoramus – 144 times worse than an ordinary ignoramus.

Works well when under constant supervision and cornered like a rat in a trap.

HAND HELD INFRARED CAMERA DETECTS HIDDEN DAMPNESS

The new, compact ThermaCam EX320 from FLIR Systems is a high-resolution infrared detector, with thermal sensitivity to 0.08 degrees Centigrade.

“The EX320 is the smallest, smartest infrared camera available today,” said David Francoeur, FLIR’s director of marketing. “For the first time, new or budget-conscious users can get a high performance infrared camera at a great price.”

The new camera is designed to have four times the resolution of previous models, allowing users to see all targets much more clearly and identify problems more easily. Targets also are visible from further away.

Calibrated thermal images can be stored and recalled for later analysis. Images and measurements stored in the camera’s memory also may be downloaded to PCs. Optional lenses are available, including a telescope lens for inspecting distant targets, such as overhead lines, and a wide-angle lens for evaluating large objects, such as roofs or electrical panels.

For more information, contact FLIR at 800-464-6372, www.flirthermography.com.

HURRICANE NUMBERS

Hurricane Katrina is expected to cost U.S. property/casualty insurers an estimated $34.4 billion in insured property losses, making it the costliest U.S. catastrophe ever, according to preliminary estimates by ISO’s Property Claim Services (PCS) unit.

Katrina caused widespread damage to homes and businesses in six states — Louisiana, Mississippi, Alabama, Florida, Tennessee, and Georgia. Policyholders in the affected states are expected to file more than 1.6 million claims for damage to personal and commercial property, automobiles, and boats and yachts.

At an inflation-adjusted $20.8 billion, Hurricane Andrew in 1992 was the costliest catastrophe in the U.S., until now.

Following is the breakdown of insured property damage and claims count:

State                Losses ($)             No. of Claims 
Louisiana          22.6 billion            900,000
Mississippi          9.8 billion            490,000
Alabama             1.3 billion            123,000
Florida              468 million            110,000
Tennessee         46.1 million              8,400
Georgia             22.2 million              3,300

The personal property loss claims include nearly 75,000 boats and yachts in the affected states, with an estimated insured value of slightly under $2 billion.

Insurers are still assessing individual losses and analyzing various scenarios that will affect ultimate claim payments, according to PCS. Handling claims from this wide-ranging devastating event has been difficult for several reasons, including limited access to damaged areas, difficulty in tracking down property owners who evacuated to other locations, and breakdown of the communications infrastructure.

PCS estimates represent anticipated insured loss on an industry-wide basis arising from catastrophes, reflecting the total insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, business interruption, and additional living expenses. Not included in the PCS estimate are losses to utilities, agriculture, aircraft, ocean marine (including oil drilling platforms), and property insured under the federal flood insurance program. The estimates exclude loss adjustment expenses.

More information is available at www.iso.com.

POINTS OF LEGAL INTEREST

Trespasser – U.S. Sixth Circuit Court of Appeal upholds defense verdict. A nine year-old boy fell under a car on the Illinois Central Railroad in Memphis, Tennessee. Testimony indicated the boy, along with his eleven year-old brother and another nine year-old boy had been playing around the tracks and the victim attempted to jump on the moving car. Plaintiff claimed the three boys had climbed onto the car while it was stationary, then further claimed that when the train began moving two of the boys jumped off, but the plaintiff was too scared. Plaintiff claims he later fell off. A statement taken of the plaintiff’s witness by the IC Claims Manager shortly after the accident was used to impeach plaintiff’s account of events. In the tape-recorded statement the witness stated that the injured boy fell under the rail car while attempting to board it. The jury found for the defendant. (Ed. Note: The verdict in this case clearly demonstrates the value of a prompt investigation by a knowledgeable claims professional.) Plaintiff appealed. Rush v. Illinois Central Railroad, 399 F.3d 705 (6th Cir. 2005)

 

Whistle Bans – FRA issues Final Ruling. On April 27, 2005, the FRA issued a Final Ruling with respect to the use of locomotive horns at highway grade crossings. The ruling took effect on June 24, 2005. The rule provided that whistle bans in effect prior to October 10, 1996 could be extended for a period of five years to allow those communities to plan for and install any additional crossing protection to comply with the new ruling. Communities that had enacted whistle bans October 10, 1996 or after will be granted a one year extension. The complete text of the ruling can be found at http://www.ci.vancouver.wa.us/upload/contents/579/FRAFinalRule.pdf

Crossings Accident -- Illinois Supreme Court Refuses to Review $54 Million Award. In a Canadian National/Illinois Central crossing accident where the dispatcher mistakenly lifted a “Stop and Flag” Order, the Illinois Supreme Court has refused to review the case. The plaintiffs allegedly had a brain injury arising from this accident. According to court records the 41 year old female plaintiff was driving a 1998 Ford Explorer south on Army Trail Road in Bloomingdale, Illinois, with her parents as passengers, just after noon on January 9, 2001. The plaintiff’s attorneys alleged that the railroad knew that snow and road salt had caused the warning gates and lights to malfunction so that a “stop and flag” order was in place until the signals were repaired. It was further alleged that a dispatcher mistakenly ad­vised a northwest bound train that the signal problem had been fixed. The train struck the plaintiff’s vehicle broadside at 50 m.p.h.

The jury apportioned five percent negligence to the plaintiff and awarded $34 million to the plaintiff/driver and $21 million to her plaintiff/parents. The railroad appealed, in part because of a day-in-the life video which contributed to excessive damages and misallocated fault, alleging that the video unfairly elicited sympathy for the plaintiff. An intermediate appeals court affirmed the judgment in November 2004, concluding that the film was properly admitted as demonstrative evidence.

The Illinois Supreme Court denied the railroad’s petition for review. Fidel Velarde, et al v. Illinois Central Railroad Co., et al, Supreme Court of Illinois, Case No. 99722.

RCSI welcomes your input. If you have any questions or comments of interest to our industry, please contact either Dave Gardner or Randal Little at (731) 967-1796 or FAX your message to (731) 967-1788.

Visit the Railway Claim Services, Inc. webpage located at www.railway-claim-services.com. Railway Claim Services, Inc. is the recognized leader in independent railroad claims management, which includes investigation, negotiations, and all those things in between. If RCSI is not already a partner in your loss control and claims management program are you accepting too much risk?

For further information contact:

 

dave_gardner@railway-claim-services.com or randal_little@railway-claim-services.com

 

Corporate Offices at: 52 South Main Street Lexington, Tennessee 38351

 

Phone: 800-786-5204, Fax: 731-967-1788 or visit us on the Web at www.railway-claim-services.com

 

Railway Claim Services, Inc. has offices THROUGHOUT THE UNITED STATES.