Ordinary Client.
Private «Client»
Security companies are very reluctant to enter into discussions about compensation for material damage to their clients. Even the State Security Service of the Ministry of Internal Affairs of Ukraine, which has a «pocket» insurance company, politely refused to inform Security UA of the amount of compensation for its clients for 2010. Such an opaque approach not only raises sad suspicions about the dishonesty of security structures, but also, ultimately, casts doubt on the effectiveness of the security service itself.
Once Upon a Time in America
A sweet 25-year-old girl, Kimberly Grails, who worked at one of the hotels in Carlstadt, New Jersey, caught the eye of a psychopath, Kenny. And one night, when the girl, dressed in a bright and stylish uniform, was on duty for another shift, Kenny, disguised as a Yankee in need of a place to stay, attacked her magnificence with a knife. Kimberly's hand miraculously reached the panic button, leaving a bloody imprint on it…
For half an hour, the girl reflexively defended her life, hoping every minute that the called security was already rushing up the steps of the hotel. When the tormentor slightly loosened his grip, Kimberly managed to break free and lock herself in the guest room. Having dialed «911», the girl finally waited for help from the police.
Kimbrel spent the next two years in hospitals and courts. Lawyers found out that before that ominous day, the panic button had been out of order for two months. Vanwell Electronics, the security company that installed and serviced the alarm, could not provide any intelligible explanation. However, without waiting for the next Supreme Court hearing in Newark, under pressure from the public outcry, Vanwell Electronics paid the girl $2.5 million in compensation in the summer of 2010.
Meanwhile in Ukraine
Having sympathized and rejoiced for Kimberly, Security UA looked into the State Register of Court Decisions, hoping to find similar instances of “nobility” on the part of Ukrainian security companies. I’d like to think that we didn’t search well, but we couldn’t find a single instance on the official resource where a security company admitted its wrongdoing and made its client rich by paying compensation.
Below we will list 3 of the most recent and high-profile cases where the Ukrainian Themis intervened.
Case 1. Simferopol
On the night of April 24-25, 2010, a fur clothing store was robbed in the Crimean capital, resulting in damages to the store owners estimated at 2 million 400 thousand hryvnia. The crime was committed by destroying the concrete floor structure of the store while the facility was under the protection of the company «Crab».
The Crimean Commercial Court, where the store owner filed a claim against the security company, by its decision of 21.12.2010 did not find a causal relationship between the damage caused to the plaintiff and the actions of «Krab». During the trial, it became clear that during the robbery, the LC-100 volumetric passive infrared detector should have been triggered, but did not. Thus, the alarm signal was not received by the «Krab» control panel and, accordingly, no response was made.
The court found that Krab did not undertake any obligations to design and install the alarm system; moreover, the contract assigned the owner the responsibility for equipping the facility with technical means of notification.
The court also noted that the installation of the faulty alarm was carried out by a representative of VPP Tekhspetskomplekt; at the same time, the case materials do not show who was responsible for the maintenance of the security alarm at this facility and who, in fact, is to blame for the fact that the signal was never received by the central monitoring station.
As a result, based on the totality and other accompanying factors, the court decided that the owner was not entitled to expect compensation for the claimed damages in the amount of UAH 2.4 million. The Sevastopol Court of Appeal upheld this decision, since, in the court's opinion, the robbers' victims were unable to prove that at the time of the robbery they, modest single-tax entrepreneurs, had goods worth millions.
The lawyer for the victims told Security UA that, according to the contract, the security company assumed obligations to compensate for possible damage in the amount of 200 thousand UAH. The victims apparently agreed to this amount of compensation. When the lawyer asked, “Are your risks insured by the insurance company?”, the representatives of “Krab” allegedly stated that this was a commercial secret. Then, according to the client’s representative, the security company was offered to continue to guard the store, but free of charge, in lieu of compensation for the said two hundred thousand. However, the security company chose to simply terminate the contract.
Case 2. Zolotonosha
Many young fathers and mothers know that in Zolotonosha there is a plant for the production of mineral waters and baby food — «Ekoniya». In the evening of 03.03.2010, the enterprise was seized by raiders, which led to the cessation of production. At the same time, the raiders did not stand on ceremony — they smashed gates and doors, destroyed the means of production, stole tools. The security agency «Gyurza», which guarded the plant, suffered a defeat in this battle.
«Ekoniya», of course, terminated the contract with «Gyurza» and decided to compensate for the losses incurred in the amount of 152,921 UAH at the expense of the security agency. However, the court refused to satisfy the claim of the domestic manufacturer on the grounds that the procedure for determining the amount of damage was violated.
Case 3. Poltava
The Ukrainian gas transmission main is a budget-forming national treasure and a kind of compensation for the sufferings of Ukrainians during the communist era. On 19.02.2004, the State Security Department of the Ministry of Internal Affairs of Ukraine took on the task of guarding some of the gas transmission main facilities in the Poltava region. However, a few days later, the police «allowed» the thieves to interfere with the fountain fittings. The thieves turned out to be poorly qualified and allowed the gas to ignite, causing damage to the Naftogaz Ukrainy company estimated at UAH 2,060,900.
Despite the fact that the GSO division under the contract assumed full financial responsibility for failure to fulfill or improper fulfillment of the obligations assumed, this fact in itself did not save the “people’s pipe”. And on 11.02.2011, the court counted the days and years in such a way that Naftogaz Ukrainy did not meet the limitation period, filing a claim as much as 3 days later than the allotted three years (the claim was filed with the court on 26.04.2007, while the limitation period expired on 23.04.2007 – Editor’s note).
One can only guess about the reasons for the delay in filing the claim, but in the end it turned out that the population of Ukraine paid millions for the shortcomings in the work of the police structure (created, mind you, also under the communists) — after all, no one even doubts that the losses incurred were taken into account in the price of blue fuel.
By the way, in this situation the lines in the letter of the Head of the State Security Service Department under the Ministry of Internal Affairs of Ukraine A. Nazarenko, sent to Security UA shortly after the announcement of the court decision on the Poltava case, seem sly and cynical: «The approach to the protection of buildings by security structures, which is based on the legislation, is designed to adequately protect the interests of consumers of security services.»
Golden and ordinary
Security UA is far from the idea that the customer of security services is always «soft and fluffy». Which of the heads of security firms has not encountered cases when the client tried to shift responsibility for his, if not criminal, then imprudent actions to the security service?
There is no reason not to believe the stories of veterans of the security business when they tell, for example, about how a wealthy director of a large municipal enterprise “shyly” took a plasma TV out of his office and blamed the security guards for it; or how the foreign management of a logistics company “cheated” its owners out of millions, proving to the latter that a Ukrainian security company was involved in the theft mechanism. Against this background, the numerous cases when customers simply do not follow the recommendations of security company specialists and violate the terms of contracts, provoking thefts from protected facilities and forcing security companies to prove their innocence seem very mild.
Another problem is that the customer does not always understand the deep essence of the security service, namely that no security gives him a 100% guarantee — it only reduces the risks of an undesirable situation. Faced, for example, with a «jerky» theft, such a customer will not understand why the response team that arrived in 3 minutes could not detain the robber who rushed from the scene of the crime? And then the customer can easily drag the security company through the courts (even the Supreme Economic Court, as was recently the case with the Security Agency «Typhoon» — case No. No. 7/88-1/172 — editor's note), or even worse — spoil its reputation, thereby scaring off new potential clients.
All these points take the issue of compensation for material damage to a secret, one might say, “intimate” area. What adds intimacy to this situation is that every security company has a certain percentage of clients who bring it more than 80% of its profits (the classic is 20/80). And with these “golden” clients, nurtured over the years, work is built on a trusting, human basis. “What, is your computer missing? My slackers didn’t watch it carefully! Let us buy you a new one!” “What, is your money missing from the safe? Don’t worry, take it, I’ll deduct it from their salary!” “How did you get the goods out? Where were my people looking?! Well, let us reduce your security costs until we settle up!” A real case: a security company in Kyiv recently paid $120,000 to its mega-client because a security guard at one of the facilities inadvertently started a fire (although it is clear that it would have been impossible to prove the security guard's guilt in court).
It is clear that the mass of ordinary clients are treated less delicately. By rephrasing a well-known expression, we can get the formula for such an appeal: “For ‘golden’ clients – everything! For the rest – the law!” And the law, as a rule, takes the side of the security company — after all, in essence, the court establishes only the legal truth, but not justice. But has anyone thought about how much harm ordinary clients, offended by this injustice, bring to the market with their anger and skepticism?
Insurance
Professional liability insurance for security companies is not a mandatory type of insurance. However, many companies consider insurance both as a way to fulfill the License Conditions and as a tool for protecting themselves from unexpected costs associated with compensation for damage to clients and third parties. In this regard, security structures often encounter a blatant lack of understanding and/or unwillingness on the part of insurance companies to delve into the specifics of security activities — right down to a clear formulation of probable insurance cases and a clear procedure for compensation for damage. In addition, standard contracts specify such exceptions from insurance cases (in one of the contracts, Security UA counted about four dozen exceptions), after reading which any sensible person will decide that they are simply being cheated.
One Kiev security company (which, as they say, «wished to remain anonymous») showed Security UA its contract with an insurance company, which has been renewed for several years. The contract, the insurance payment for which is UAH 34,000, provides for a total liability of UAH 12 million per year with a deductible of UAH 60,000. Another company, according to the director, is limited to liability of UAH 1 million with a zero deductible. At the same time, it has not yet been possible to obtain «for the press» information about the insurance payments made by Security UA.
Oddly enough, even the State Insurance Department, which founded the Ukrainian Security and Insurance Company 15 years ago, remained silent. Experienced insurers consider the very fact of payment to be the best advertisement for their insurance company, so the silence of the State Insurance Department on the amounts of compensation for damages clearly does not benefit either the Ukrainian Security and Insurance Company or the development of the security and insurance markets as a whole.
Insurance is an area of civil law relations, i.e., this tool is hardly applicable for “golden” clients now. After all, getting compensation through an average Ukrainian insurance company is the same as dragging a client through the courts and, in the end, losing him.
Conclusion
In the draft law “On Security Activities” (in one of the latest versions), the mechanism for compensation for damage by security firms is aimed exclusively at the canvas of “current legislation”. Private security structures and their associations that participated in the process of polishing the document, it seems, simply did not want to take advantage of the chance to protect the “ordinary” client at the legislative level.
For now, the client is theoretically protected by the above-mentioned License Conditions. However, as Security UA found out, the State Security Department of the Ministry of Internal Affairs of Ukraine does not monitor violations of the clause concerning the property liability of security companies. At the same time, professional market associations do not yet offer any economic model for protecting their consumers, loudly blaming all the troubles on faceless and elusive «dumping».
Although one of the options for solving the problem is obvious: since insurance companies are mostly inert, we ourselves, with the participation of insurance market experts, should develop a competent Professional Liability Insurance Program. And make this Program open for participation by proven insurance companies, creating internal competition in their environment. And if the program provisions are supported by the creation of a Register of Trust of Insurance Companies to Security Entities, and also ensure acceptable transparency of business processes in the media space, then we can get a completely balanced economic model that will protect both the client and the market itself from unscrupulous players.
I recalled that at a round table on the problems of dumping in the security services market, held in Kyiv last October, one of the market authorities, addressing his colleagues, literally said the following: «… everyone is no longer poor, everyone drives good cars, lives in good houses, — “Well, you have to give a little bit back.” I wonder if he meant that, if necessary, you have to “give back” to an ordinary client?
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Alexander Krasnoperov
http://security-ua/