LEGAL & LITIGATION
Few people want to spend their working lives worrying about what could go wrong – but there are experts out there who can do it for you, as Stewart Harrison, director at Harrison Abbott Ltd, specialists in risk management and audit assurance explains.
R
ail professionals are faced with risks every day – fi nancial, contractual, le- gal and even digital.
Stewart Harrison is an expert on both risk management and the rail industry, as a for- mer group insurance manager for Jarvis, a senior auditor at British Rail, and now as director at North Yorkshire-based Harri- son Abbott Ltd.
RTM began by asking him for his thoughts on the rail industry’s general attitude to risk, and whether it manages risk well.
He told us: “The main risk issue in the rail industry, which gets all of the public atten- tion of course, is safety. It’s always there at the very top of every priority list: are we doing this safely, are we doing it correctly? Are our workers going to get home safely this evening?
“And from a safety point of view, yes, they do risk assessments and method state- ments to ensure that workers on the track are doing it correctly so that the travel- ling public never think anything about it. Because the main issue is of course that if something does happen on the railways, it’s front page news. There are many, many deaths on the road that we never hear about; but if you have one death on the
52 | rail technology magazine Aug/Sep 11
railway because something’s happened, it’s front page news.”
Getting the message
“I think the rail industry is conscious of that and the safety aspect,” he continued. “I was involved on the contractors’ side of track renewals and maintenance, and it’s drummed into the workers there that they have got to operate safely. Because the work they’re doing is not just about the safety of the employees – you’re trying to keep the travelling public safe as well.”
Network Rail and the rest of the industry must, however, prepare for the worst – and spend an awful lot of money on insurance in order to do so.
In fact, Network Rail has negotiated a £155m third party industry-wide insurance scheme, which provides cover for all con- tractors it employs – but not all suppliers know about this, Harrison says. Even some Network Rail staff seem unaware.
He told us: “In 1996, after privatisation, it was decided that you needed to have £155m of third party insurance to work on the railways. And from 1996 until 2003, large contractors were buying it to do this. I was with Jarvis at that point, and went
to Network Rail’s insurance manager who I knew at that time, Ian Thompson, and I said to him, look, it is costing a fortune to buy this, and the only way I get that mon- ey back is to put it into the contract that I put to you to do the work and of course our margin goes on top. And everyone else does that as well, so you’re paying £155m two or three times over.”
Negotiation
“Ian was conscious of this fact and we worked together to try to get the industry to understand what we were trying to do. So if Network Rail bought one scheme of £155m and covered everybody who worked for them, contractors and subcontractors, we could then put our bid to them without in- cluding that within our fi gure, knowing full well there were no gaps in cover because we were all covered under one scheme.
“As far as I’m aware it is fairly unique to the rail industry. Now it’s been going for seven or eight years, and there are subcon- tractors out there who don’t know about it and unfortunately there are still some people in Network Rail, in the regions, who don’t know about it. Part of the work we do at Harrison Abbott is to speak to people in the rail industry and certainly the smaller contractors and say look, if you’re asked for
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