In that case you really have no choice but to flag the crossing. I'm pretty sure here in WA that any crossing that has signal that aren't working, for whatever reason, must have a "stop and protect" order, and the train crew is then responsible for doing just that.

Obviously there will be exceptions, but in general I think that you need to consider all the implications of using flaggers. Yes, there will always be idiots, but if the railroad can avoid doing anything that might add confusion, it's a good idea.

While I'm in GCOR mode, Rule 6.32 Road Crossings, Para. A has a table to determine the proper response to "Automatic Warning Devices Malfunctioning".

In general, if an automatic warning device is malfunctioning for whatever cause, whether the train crew has been advised of the situation or not, the train must "Stop before occupying the crossing. After a crew member is on the ground at the crossing to warn highway traffic, proceed on hand signals from that crewman."

A "crew member" is specified separately from an "equipped flagger", who is "a person other than a crew member who is equipped with an orange vest, orange shirt or orange jacket. At night, the vest, shirt or jacket must be fluorescent. The flagger must have a red flag or stop paddle by day and a light at night."

If an equipped flagger(s) is at the crossing (not a crew member you have to let down from the train), and ample warning is provided in all directions, the train may proceed across the crossing at normal speed without stopping. If traffic cannot be warned in all directions by the equipped flagger(s), the train may proceed over the crossing at 15 MPH without stopping until the head end of the train completely occupies the crossing. Then proceed at normal speed.

Refer to the Rule for more details.

Para. B Whistle for Crossing states:

"When notified that the automatic warning devices are malfunctioning, sound whistle signal 5.8.2(7) regardless of any prohibition." 5.8.2(7) is, of course, two longs, a short, and a long, to be prolonged or repeated until the engine occupies the crossing.

On my railroad (one of the big ones) we only have to stop if the crossing protection has failed to activate. If the protection is stuck operating without a train being present, we only have to slow to 15 cross the road, if there is no flagger present. I once flagged a crossing that was broken according to the dispatcher's computer, even though it was working fine. Sure felt silly holding a red flag out there when the gates are down, lights flashing, and traffic is backed up for a mile.

But as mentioned before, here in PA our crossings are governed by the utility commission. And they do say that some crossings must be flagged. I do find it strange that the public won't yield to a massive locomotive, but will to a tiny red flag. As far as liability - it will happen no matter what. Someone could sue you for providing a flagman that confused them, and they could sue you for not having one at that crossing they thought was abandoned. But if a crossing is really hidden by brush, with no active signals, and is hardly used, it may be better to flag. Even though crossings should be neat and tidy, IMO.