The Danish Workers Compensation Scheme (WCS) is an employer-financed insurance that covers workers losses due to occupational injuries. If the worker is injured due to a defective product he may claim compensation under the Danish Product Liability Act (PLA), but only to the extent he has not and will not be compensated by WCS. WCS insurers are not subrogated into the claim of injured worker and accordingly cannot seek recourse from the liable producer. At first glance, this setup means that producers of products used exclusively in the workplace have inefficient incentive for designing and manufacturing non-defective products. However, other factors influence the optimal regulation of liability and the initial inefficiency may therefore be questioned. Does the prospect of liability really create incentives? Is liability needed when WCS ensure workers compensation? Is liability needed when there is safety regulation, regulatory monitoring and criminal sanctions in place? Does the deterrent effect of liability outweigh its inherent administrative costs? PLA is the result of the Product Liability Directive issued by the EU. Denmark is under an obligation to ensure conformity between the Directive and EU-law on one hand and PLA and related legislation on the other hand. For products used exclusively in the workplace, the Danish setup in effect transfers the liability from producers of to Danish employers whose insurance premium will include the expected cost of injuries caused by defective products. Questions may be raised as to the conformity of this solution. This thesis explore the above mentioned issues in order to determine if the current system of interplay between WCS and PLA ought to be changed, allowing insurers to be subrogate into injured workers’ claims seeking recourse from liable producers. It is shown that a prospect of liability will bring about efficient safety benefits even with current safety regulations, monitoring efforts, criminal liability and market forces in place. Furthermore an analysis of the applicable EULaw also implies an obligation on Denmark to change the current system.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||107|