The Enterprise and Regulatory Reform Act: welcome change or uncertain times?

There has recently been an important change in relation to employers’ liability law. Prior to October last year there was a presumption that regulations established under the Health and Safety at Work Act 1974 carried civil liability for breach of the regulations unless expressly excluded. On 1 October 2013 the Enterprise and Regulatory Reform Act 2013 came into force. Section 69 of this act has had the effect of reversing this presumption.

What does this mean?
If an employee is injured at work it may now be more difficult to prove a claim against the employer and recover compensation for the injury and other losses suffered as a result of the accident.

For example, prior to October 2013 if an employee was injured as a result of faulty work equipment, even if the employer could prove that the equipment/machine had been well maintained and serviced, it was unlikely the employer would avoid liability for the accident.

An example of this is the case of Stark v the Post Office. Mr Stark was employed as a delivery postman. The Post Office provided him with a bicycle to use to make his deliveries. During the course of his employment he was riding his bicycle when the front wheel locked and he was propelled over the handlebars and suffered a serious injury.

The accident was caused by the fact that part of the front brake broke in two and lodged in the front wheel. It was concluded by the judge that the “defect would not and could not have been discoverable on any routine inspection” and he went further and said a rigorous inspection would not have revealed the defect.

Mr Stark was able to rely upon the Provision and Use of Work Equipment Regulations 1992 to recover compensation for his injuries as these regulations impose a duty on an employer to ensure that work equipment is maintained in an efficient state, in efficient working order and in good repair.

Under the new regime it is not quite as straightforward, and solicitors acting for injured employees may have their work cut out establishing negligence and in some cases will need to consider relying on older, sometimes long-forgotten statutes and case law. This comes at a time when the recovery of costs for these types of cases has been limited and therefore employees injured at work may find it difficult to find a solicitor willing to take the case on a no win, no fee funding basis, given the potentially onerous investigation required.

In Mr Stark’s case, he was unable to establish negligence against the Post Office and would not therefore have recovered compensation for his injuries if he had not had the right to rely directly on the breach of the regulations. A right which no longer exists.

In 2012/13 the Health and Safety Executive reported that there were 760 major injuries and 17 fatalities due to ‘contact with machinery’.

There is also concern that removing this presumption will result in some businesses being more complacent in their attitude towards the inspection and maintenance of machinery and equipment and therefore the safety of their employees. The number of accidents may increase as a result.

Prevention better than cure
In enacting this legislation, the government is responding to fears regarding the UK developing a “compensation culture”. The intention of the act is to reduce red tape and costs that businesses face in complying with previous health and safety legislation and to address any potential unfairness that has arisen previously in cases where employers had done all that could be reasonable expected of them to protect employees from injury in the workplace. However, it would be incorrect to see this development as a general lowering of the bar in terms of employers’ duties to their employees. Organisations need to be aware that this change does not mean that all the statutory obligations have been removed, and the regulations will still apply as part of our criminal law.

Businesses must continue to do all they can to prevent accidents at work by using such tools as risk assessments and audits; training; inspecting and maintaining work equipment; providing safe systems of work; inspecting and maintaining workplaces and consulting and involving workers in the process.

Jane Gittins is head of legal operations at Spencers Solicitors.