Utilities and Roadside Safety (2004)

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6Legal Issues C. Paul Scott Transportation departments and utility companies have two major reasons to beconcerned about utility pole collisions: • Improved safety for motorists, and • The threat of litigation. The threat of liability is significant, and it is increasing. NEGLIGENCE AS THE BASIS FOR TORT LIABILITY Negligence is the leading basis for suits in highway liability cases. The plaintiff usually alleges that the transportation department or utility company failed to act in a reason- able manner and thus caused or contributed to a traffic accident. To win a negligence suit, the plaintiff must demonstrate the following conditions: • The defendant had a duty. • The defendant breached that duty. • The plaintiff suffered damage. • The defendant’s breach was the proximate cause of the damage. In some states, the plaintiff is barred from recovery if found guilty of contributory neg- ligence. In other states, recovery may be reduced if the plaintiff is found guilty of com- parative negligence. In laymen’s terms, negligence is the failure to use reasonable care in the treatment of others. The key issue in a negligence trial is demonstrating what action would have been reasonable in the circumstances of the case. The defendant’s actions are measured against the standard of care to determine whether they were reasonable. The standard of care may be a written set of instructions, a policy, a guideline, or the accepted normal prac- tice. As an example, for obstacles located in the clear zone, the standard of care might be the AASHTO Roadside Design Guide (1). In a typical case, the defendant (transportation department or utility company) has a duty to provide a reasonably safe roadway. Breach of this duty could be installing or 33 C. Paul Scott, Federal Highway Administration, 400 7th Street, SW, Washington, DC 20590. Current affiliation: TBE Group, Inc., 16216 Edgewood Drive, Dumfries, VA 22026.

allowing a utility pole to be installed too close to the road. A vehicle striking this pole could be severely damaged and a motorist severely injured. The motorist in such a case may have the elements of a winning negligence case, especially if installation of the pole was in violation of the standard of care (i.e., the accepted clear recovery area guidelines that were in effect at the time the pole was permitted). NUISANCE AS THE BASIS FOR TORT LIABILITY The legal grounds for nuisance suits are simpler than those for negligence issues. A nui- sance is a public hazard simply because of how and where it exists. To prove nuisance, the plaintiff must merely show that the utility structure posed a threat of injury to pub- lic travelers. The Law and Roadside Hazards (2), published by the Insurance Institute for Highway Safety, summarizes the nuisance issue as follows: Governments as well as private parties are liable for public nuisances which endanger travelers. First, they may be liable for failing to order private parties to remove privately owned public nuisances. The general rule is that any artificial device, structure, or exca- vation adjacent to a highway which poses a threat of injury to travelers can be consid- ered a public nuisance. JUDGMENTS AND SETTLEMENTS Tort suits against transportation departments are a relatively recent trend. Before the 1960s, there were almost none; however, claims and suits have grown at a rapid rate since then. A tidal wave of liability suits began to hit state transportation departments in the late 1960s and has continued to grow. It is now including cities, counties, townships, and parishes. Even where utility companies and transportation departments have not yet experi- enced major financial losses due to tort liability suits, the threat of these suits is a major factor. Employees dread being involved in liability suits and are often leery of making decisions because of the possibility of being sued. One way to overcome this difficulty is to establish agency or company policies for crash reduction programs and for clear zone treatments and then to operate within these policies. LAWSUITS Is there liability for the placement of a utility pole? The courts have struggled to answer this question. Generally, they have ruled a utility company may be liable to a driver who is injured when his or her vehicle strikes a utility pole where placement or maintenance of the utility pole close to the edge of the roadway constitutes a foreseeable and unrea- sonable risk to users of the roadway. A summary of the results of a few court cases involving vehicles striking utility poles may be found in Appendix C. INDEMNIFICATION Because liability is an important issue, transportation departments and utility companies are intent on minimizing its impact. Two simple forms of indemnification involve the use of “hold harmless” clauses and the purchase of insurance. Hold Harmless Clauses One way for an agency to protect itself from being sued because of a permittee’s negli- gence is to include a hold harmless clause in its permits. Such a clause stipulates that the 34 Utilities and Roadside Safety

Legal Issues 35 permittee agrees to hold the public agency harmless from any liability occurring as a result of negligence. Normally, this protects the agency from judgments assessed against it and requires the permittee to pay for legal services the agency must use because of a claim regarding the permittee’s negligence. Even when the hold harmless clause is valid and enforceable, it does not protect an agency whose own employees committed the acts that led to the suit. As an example, utility companies obtaining a permit from the Idaho Department of Transportation find this statement: In accepting this permit, the permittee, its successors and assigns, agrees to indemnify, save harmless and defend regardless of outcome the State from the expenses of and against suits, including costs, expenses and attorney fees that may be incurred by rea- son of any act or omission, neglect or misconduct of the permittee or its contractor in the design, construction and maintenance of the work, which is the subject of this permit. Insurance Selecting the appropriate type and amount of insurance is always a matter to be deter- mined by local officials and local conditions. Transportation departments often purchase a comprehensive insurance package that covers liability, company or employee actions, vehicle collisions, and professional liability for managers. A large transportation depart- ment or a large utility company might find it more cost-effective to self-insure. This prac- tice involves setting aside a reserve of funds from which to pay claims. Administration of self-insurance requires a system for carefully tracking the number and amounts of claims and estimating the probable sizes of future claims payouts. Some agencies prefer to purchase “over and above” or catastrophic insurance cover- age. Such insurance comes into play only when an agency must pay a disastrously large claim. For example, an agency may be self-insured for small claims but purchase a cata- strophic policy to cover any claim loss over $1 million. This would prevent such a claim from bankrupting the self-insurance program. One example of insurance coverage is illustrated by the Connecticut Department of Transportation. An application for a utility permit must be accompanied by a certificate of insurance and a permit bond. The Connecticut Department of Transportation requires the following: Prior to the issuance of permits to any firm or corporation other than public utility com- panies, the submission of a certificate of insurance (form Con No. 32) indicating mini- mum coverages of $750,000 (each accident or occurrence), $1,500,000 (aggregate) for bodily injury liability and property damage liability in conjunction with the following hazards will be required: A—Protective Liability for and in the name of the State of Connecticut B—Contractor’s Public Liability D—Contractor’s Liability K—Workmen’s Compensation—by Statute Hazard “F”—Explosion, collapse or underground damage liability shall also be required when applicable (any excavating within Bureau of Highways property). An umbrella policy used to provide the required coverage must cover all items and it must be so stated on the certificate submitted. UTILITY POLE CRASH REDUCTION PROGRAMS Hold harmless clauses and insurance may help limit liability, but some transportation departments and utility companies do much more. The most progressive have devel-

oped and implemented utility pole crash reduction programs. Washington State has developed such a program. Information about the Washington State program, other local and state transportation department programs, and utility company programs may be found in FHWA’s Highway/Utility Guide (3) and in other chapters of this report. Utility pole crash reduction programs normally include the following: • Categorization of utility poles: Washington State, for example, has three categories called Locations I, II, and III. Location I includes the most hazardously located utility poles, generally those located within 5 ft from the edge of any usable shoulder. • A systematic process for relocating or mitigating utility poles deemed to be the most hazardously located: This involves a process for determining appropriate counter- measures, a target for relocating or mitigating hazardously located utility poles, and the actual relocation or mitigation of hazardously located utility poles. Mitigation may involve improvements to the roadway instead of to the utility pole. Courts often look kindly upon transportation departments and utility companies that can demonstrate they are addressing the problem of utility pole crashes in a positive manner. It obviously is impossible to immediately relocate or mitigate all the haz- ardously located poles that exist. A systematic program and documented results do, however, demonstrate an intent to reduce utility pole crashes in an efficient, cost-effec- tive, expedient manner. A recommended crash reduction program and associated road- side safety countermeasures adapted from FHWA’s Highway Utility Guide may be found in Appendix B. REFERENCES 1. Roadside Design Guide. AASHTO, Washington, D.C., Jan. 1996. 2. Fitzpatrick, J. F., M. N. Sohn, and R. H. Woods. The Law and Roadside Hazards. Insurance Insti- tute of Highway Safety, Washington, D.C., 1974. 3. Highway/Utility Guide. Publication No. FHWA-SA-93-049. Office of Technology Applications, FHWA, U.S. Department of Transportation, June 1993. 36 Utilities and Roadside Safety