The Enterprise & Regulatory Reform Act, which received Royal Assent on 25 April 2013 and appears to have passed through parliament with limited scrutiny, will fundamentally change the law relating to accidents at work so that in the future it will be harder for employees to succeed with claims against their employers.
One of the aims of the current coalition government is to "free up business and society from the burden of excessive regulation." Accordingly, the Cabinet Office initiated the "Red Tape Challenge". As a result of a focus on Health and Safety regulations, Professor Löfstead was commissioned by the Minister for Employment in March 2011 to carry out an independent review of Health and Safety law. One of Professor Löfstead's conclusions was that the strict duty of care on employers in civil claims was potentially unfair to them and this has motivated the government to change the law.
The present law governing the employer's duty of care is mainly contained in a large body of statutory regulations enacted under the authority of the Health and Safety at Work etc Act 1974 covering the myriad areas of risk at work such as work at heights, manual handling, guarding and use of various categories of machinery etc.
One of the regulations' features is that they often impose strict or absolute duties upon the employer both under the criminal law and for civil damages if the employee is injured. Thus, even if the employer took reasonable care under the common law and the employee failed to look after his own safety e.g. by using an unguarded machine in order to complete a rush job at work, the employer would be still found liable in damages. In this scenario there might be a deduction for contributory fault by the employee for using clearly dangerous equipment but the employer would be found principally liable.
The effect of the new legislation, which is not expected to come into force until later this year or early next year, is that employees raising an action will require to establish that their employer was negligent. In addition, even in situations where strict liability applies under the regulations, in a civil damages claim the employer will have the defence that all reasonable steps were taken to protect their employees.
Whilst this change in the law is likely to be welcomed by employers, the concern for employees' representatives is that it appears to represent a return to the position before the Factories Act 1961 when there was a far higher incidence of serous accidents at work where the injured employee or his surviving family often had no compensatory remedy. While the loosening of the employer's duty may discourage some claimants from raising court action in the first place, it may have the overall effect of increasing litigation, which will now focus more on the the question of fault. The provisions however are likely to result in fewer successful claims.
The knock-on effect is that businesses looking to cut costs in the current economic climate may be less inclined to spend money creating a safer environment for workers. Unfortunately, this comes at a time when the Health and Safety Executive are also feeling the pinch due to government funding cutbacks meaning that they have less scope for carrying out proactive spot visits. In response to these fiscal difficulties, the HSE recently implemented the Fee for Intervention (FFI) cost recovery regime in October 2012. FFI allows the HSE to recoup the cost of carrying out its regulatory functions.
While this produces a welcome income stream for HSE it also requires to be administered and enforced. Businesses in breach which have had to spend large sums achieving compliance may not welcome a further bill at the end of it from HSE based on the inspector's charge rate of £124/hour. Will this divert further hard-stretched resources away from HSE regulating safety at work?