§ 5. Historical roots of accident insurance. The different kinds of social insurance had different origins, some knowledge of which is necessary to an understanding of the present situa tion. These origins still affect the nature of social insurance to-day, and have prevented the development of a truly unified and logical system in accord with present conceptions of needs and of justice.
Accident insurance had its beginnings in the liability of employers for accidents that happened as a result of the em ployer's negligence, a principle found to some degree in the law of all countries. Thus the earlier payments to work ers in cases of accidents were not insurance indemnity, but merely damages collected in court for the fault of the em ployer. In Great Britain and the United States, indeed, by judicial interpretation the law grew more strict as against the claims of the workers, until about 1880 in Great Britain and 1910 in the United States. To collect damages it was not enough for the workman to prove the employer's negli gence, for collection was made more difficult by (1) the doc trine of contributory negligence, (2) the doctrine of the as sumption of risk, and (3) the fellow-servant doctrine.
By the doctrine of contributory negligence, the workman's claim could be defeated by showing that he had by his care lessness contributed to the accident even when the employer had been negligent. By the doctrine of assumption of risk the workman was presumed, in entering upon employment, to have taken upon himself the risks usually incident to the employment, including the chance of imperfections in the ma chinery, of which he might by some care have known. By the fellow-servant doctrine the employer was freed from re sponsibility for accidents due to the negligence of other em ployees, "fellow servants," even when it was impossible for him to know their character and reputation, as in the ease of a large factory or of a great railroad.
§ 6. Development of compensation for accidents. In some countries of continental Europe, notably Germany and France, the law of employers' liability was altered in favor of the worker early in the nineteenth century, so as to make compensation more usual and adequate. Since 1885, espe cially, this liability has been much further extended in many countries and in various directions, and yet the laws of acci dent compensation still retain many features of the old lia bility laws and remain in their legal character somewhat apart from the other branches of social insurance. Even in the newer type of "compensation" laws the indemnity paid by employers on account of accident is looked upon as commuted damages, but the old employers' defenses, just named, are abolished or made more difficult to plead. The new plan has
the advantages of granting compensation by a schedule fixed in the law, insuring greater certainty, more adequate pay ments, greater ease of securing redress,. and abolishing the cost of law-suits. Still, in most countries and in most states in America, the worker has the option of suing under the old law. In some forty countries the principle of compensation by a prearranged schedule of rates has to some , degree re placed that of litigation and determination by the jury of the damages in each separate case. The insurance spoken of in relation to accidents is technically that which the employers may or must take to protect themselves against loss, not that which the workman has. • The situation as to compensation in a few leading countries is as follows, the dates given being those of important legisla tion. S Accident Insurance Voluntary (as to employers insuring, but compulsory compensation).
Great Britain, 1897, 1906, 1907.
France, 1898, 1907, (compulsory for seamen, 1898, 1905). Denmark, 1898, 1908.
Belgium, 1903 (voluntary except for miners).
Compulsory insurance of their risks, by employers.
Belgium, for miners, 1868.
Germany, 1884 (in employers' associations). 1887, 1900, 1911 (voluntary for some classes).
Austria, 1887 (as in Germany), 1894 (voluntary for some classes). Norway, 1894 (in a state central insurance office), 1896.
Italy, 1898, 1904.
Holland, 1901 (in the Royal Bank or in private companies). Sweden, 1901 (as in Norway).
§ 7. The compensation plan in America. Under the practical operation of the law of employers' liability in force in any American state until 1911, a very small proportion of the workers injured while at work were legally entitled to any indemnity, and a still smaller proportion could succeed in recovering any substantial amount. Employers, and the accident companies with which employers insured, either com promised the claims for small amounts or fought in the courts the claims of those who refused to compromise. If the court awarded damages, large or small, a large part of the proceeds went for legal expenses. Only a small pro portion of the total costs to employers went as benefits to the victims of accidents. It appeared, in an extensive investi gation of the business of the large industrial insurance cow ponies, that but 28 per cent of the premiums paid by em ployers were paid to workmen as indemnity.