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Don’t be led by price only

About the author: In the final year of a professional doctorate in Criminal Justice Ian Kirke LLB (Hons), MSc, MD of trainers TFS, offers a review of recent case law that identifies potential pitfalls for unprepared heads of procurement and suggests some easy wins to mitigate the risk and meet the needs of corporate governance, using the contracted-in guarding sector as a case study.

It’s probably an age thing with me. Buying back all my old football and speedway memorabilia from eBay that I sold when I was a teenager believing it to be un-cool. Recently I became aware of the practise of online bidding for contracted-in guarding services. Although used as an initial screening process I was nonetheless curious. My immediate reaction was that of an eBay buyer. Would it be any different than buying a retro football shirt at the cheapest price? I have to admit that I have never purchased guarding. As an ex-senior police officer I have to cast my mind back to the early 1980s when as a raw recruit the night-time security guard equalled a steaming cup of tea and a rest from plodding Bracknell town centre.

During my doctorial research I was given the opportunity to ask real buyers. Overwhelmingly, and taking out the grudge element that seems to accompany many security purchases, contracted-in guards were a reactive purchase. Trouble at mill tended to be the principal driver. Overt violence that needed to be handled along with a clear statement to other colleagues that the uniformed person would reassure and react. But I wondered if buying guards at the cheapest price was too good to be true? Indeed my gut instinct tends to kick in and abide by the mantra ‘if it’s too good to be true it usually is!’

In terms of price there has to be a tipping point below which the patrolling guard is either on the minimum wage or dangerously close to going under. And remember they need to turn up in some form of clothing and must have a back of house administrative function. Being SIA trained, to use the words of Shania Twain, “That don’t impress me much”! That’s the law, so get over it! And is that baseline status enough? Surely if procurement can buy an SIA qualified guard at the cheapest rate then surely that has to be happy days for the business concerned? According to George Gershwin and recent case law I would suggest that, “It ain’t necessarily so”.

In Hawley v Luminar Leisure Limited [2006] EWCA Civ 18 the issue of vicarious liability was ruled upon. In brief Luminar, an operator of nightclubs, contracted in a private security company to provide door operatives. Warren, a doorman, assaulted Hawley outside of a Luminar premises in Southend-on-Sea whereupon the latter suffered long-term injuries. In deciding who was the employer for the purposes of Hawley’s subsequent claim the Court of Appeal considered a numbers of factors, including the uniform that the door staff were wearing and Luminar’s code of conduct and concluded that Luminar was the temporary employer as it had explicit control over the deployment and use of the contracted-in staff and thus responsible for the injuries inflicted upon Hawley.

The bottom line? Organisations cannot simply outsource the management of risk without conducting a proper risk assessment including a thorough review of the capabilities of the third-party supplier to manage it. How then can procurement help the security and loss prevention department’s to complete the triangle of value, service and price? This will inevitably involve testing the contractor’s level of training and operational competence. Questions such as ‘what additional skill set does the third party supplier offer’? For example, have they got the capability to deploy accredited guards under the auspices of the Home Office backed Community Safety Accreditation Scheme (CSAS). My research shows that around half of deployed retail security guards have no training on physical intervention skills thus adequately managing a punch up on the shop floor may be problematic. Equally, ‘how intelligent led are the guards?’ For instance, what briefing mechanisms are in place to reinforce how to manage risk and what are the local drivers (such as, persistent offenders, vehicles of interest, etc.)? Simply blaming it on the supplier if things go wrong will not amount to a defence.

Everett & Anor v Comojo Ltd T/A The Metropolitan Club & Ors [2011] EWCA Civ 13 is likely to add colossal weight to the need for procurement to address often fragile policy on the safety of the workplace. In this landmark case the Court of Appeal considered the issue of whether a private company could be liable for the criminal actions of a third party. The appellants had been guests at the nightclub, restricted entry to members only, owned by Comojo and were subsequently injured in a knife attack by another guest. The situation gained a momentum all of its own when a waitress at the bar was touched on the bottom by one of the group in which the appellants were standing. Another guest (A) witnessed the event and stated that the guilty party would apologise before the end of the night. ‘A’ recruited the assistance of an associate and fellow guest (B) who was reported by the waitress as being ‘scary’ to the on duty bar manager. ‘A’ asked the appellants for an apology whereupon ‘B’ stabbed both of the appellants. ‘B’ was later convicted of wounding with intent and sentenced to life imprisonment.

The Court of Appeal held that the commencement point for establishing a duty of care was contained within Caparo Industries plc v Dickman [1990] 2 AC 605. In respect of the threefold test the Court held that: The Comojo management was in control of the premises and could regulate who entered. The guests, therefore, relied on the competence and prudence of the management to regulate entry and there was also an economic relationship between the bar owners and guests. (Proximity of relationship test). The consumption of alcohol can lead to the loss of self control and subsequent violence. Indeed Comojo had identified this risk within their company risk assessment. (Foreseeability of injury test). It was fair and reasonable to impose a duty of care upon Comojo, particularly as there was already an imposed duty created by the Occupiers Liability Act 1957. (Fair, just and reasonable test). I would contended that the Comojo case is particularly relevant to commercial outlets since many will carry the identifiable risk of theft, often carried out by offenders who may resort to violence. Simply doing nothing is not an option. A contracted-in guard must have a skill-set that includes simple preventative strategies too. Arguably in Comojo type case the least of expectations would be for a low level intervention, for example, “Behave please or the police will be called”.

So what can procurement do to achieve great value yet protect the reputation of their businesses and the staff employed there? What does ‘value’ look like? Pretty simple really: don’t be led by price only, as there will always be a supplier who is willing to do it for a penny less per hour. Get it right and the courts will be supportive as in Josephine Mitchell & Others v United Co-operatives Limited [2012] EWCA Civ 348. In a nutshell a group of employees sued their employer in relation to psychiatric injuries allegedly caused by a number of robberies at their place of work. Although the claimant’s employer was not liable for the injuries risk assessments carried out by them and subsequent control measures including, wait for it, provision of a security guard. The Co-op was found to have appropriate measures to the level of risk and the case was dismissed.

And finally, my professional advice to those in procurement? Keep eBay type purchases simple and straightforward. By the way does anybody out there want a job lot of Notts County shirts?

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