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The Enterprise and Regulatory Reform Act 2013 - One Year On…

Balancing the burden of health and safety legislation, whilst maintaining progress in health and safety outcomes, is an ongoing challenge for manufacturing and engineering businesses.  The Enterprise and Regulatory Reform Act 2013 (“the ERRA”) sought to address this balance.  The ERRA has now been in force for a year so now the dust has settled, what are the likely impact of the reforms?

Aims of the ERRA

The ERRA aimed to level the playing field and bring the liability of employers back into a fault based system. Previously employers could be held liable to pay compensation to employees injured at work, even where there was nothing they could have done to prevent the injury and where all reasonable steps had been taken (i.e. a strict liability), or if they could not prove they had done everything reasonable to avoid breaching certain health and safety regulations.

The ERRA and the wider reforms have been intended to cut red tape and make the UK a more attractive proposition for companies to do business. The ultimate goal is to cut the cost of doing business in Britain and in turn boost consumer and business confidence and create jobs in the private sector. 

What did the ERRA do?

The most fundamental section of the ERRA concerned the removal of civil liability of employers. That is section 69 which reversed the presumption in section 47 of the Health and Safety at Work Act 1974 meaning breach of a duty imposed by health and safety legislation will no longer give rise to civil liability.

For accidents that have occurred after 1 October 2013 employees will now have to prove negligence on the part of the employer, except in very limited circumstances. The one exception at present relates to pregnant workers and new mothers. In addition the Employer’s Liability (Defective Equipment) Act 1969 has found a new lease of life, although to succeed under this Act a claimant must prove negligence against a third party in order to succeed against the employer, who would usually then have a claim for contribution/indemnity from that third party.

At common law the standard of care to be affixed to an employer is that of “a reasonable and prudent employer taking positive thought for the safety of his workers in the light of what he knows or ought to know”. (Stokes v GKN).

In short the claimant will have to show:

  • A duty of care is owed (which it almost always will be in an employment situation).
  • The defendant has breached that duty by reference to the standards of the time.
  • The conduct of the defendant has caused the claimant’s harm and/or loss.

 The ERRA’s likely impact?

We are now over a year on and cases involving accidents post 1 October 2013 are beginning to trickle through. In the coming months we will see how the court interprets the changes.

Evidence of breach of health and safety regulations remains a key evidential issue but such breaches alone are now insufficient to immediately trigger civil liability, subject to causation.

During a Parliamentary debate on The Enterprise and Regulatory Reform Bill Lord Faulks, stated:

A breach of regulation will be regarded as strong prima facie evidence of negligence. Judges will need some persuasion that the departure from a specific and well-targeted regulation does not give rise to a claim in negligence.

As such it is unlikely that APIL’s description of s.69 of the ERRA as ‘a charter for rogue bosses’ will become a reality. The cases of an employer being found to have breached a ‘reasonable practicability’ regulation but not to have been negligent will be few and far between. However, the ERRA may create such situations not only because of the slightly (but crucial) difference in legal analysis between the two types of duty, but also because the burden of proof will now remain on the claimant. Previously where the concept of ‘reasonable practicability’ was relevant the burden reversed onto an employer to show that it had done everything reasonably practicable to avoid breaching a regulation.

The greater change will be the so call strict liability regulations – where previously an employer would be liable even though they could show that they did everything which could reasonably be asked of them. It is these cases where once liability would rest on the employer in which we will see the greatest impact.

Businesses need to be aware that criminal liability will remain a potential consequence of breach of the health and safety regulations and hopefully the ERRA will be a step forwards in addressing what has become a compensation culture.

Looking Forward

  • Only time will tell if we see a material change on the ground. The cases for accidents after 1 October 2013 are just now starting to trickle through.
  • Criminal liability is maintained and so health and safety in the workplace is just as important as it always was.
  • There has been a ‘levelling of the playing field.’ The real difference is that moving forwards where an employer has done everything which could reasonably be asked of them, they will not be liable to compensate their employee for any personal injury suffered. A common sense fault based system.
  • As more claims because potentially defensible the need for thorough accident reporting and investigation will become more apparent than ever.
  • The De-Regulation Bill will remove self-employed people whose work activities pose no potential risk of harm to others from health and safety law.
  • Extending of Fundamental Dishonesty - Clause 49 of the Criminal Justice and Courts Bill proposes that a court should be required to strike out a claim in the event of a finding of fundamental dishonesty, even if part of the claim is honestly pursued, unless the claimant would suffer “substantial injustice.”
  • Businesses can now adopt a common sense approach to health and safety in the workplace. An end to ‘health & safety gone mad’? Only time will tell.

If you require advice concerning health and safety issues or the potential impact of ERRA on your business, please get in touch with our team of specialists at DWF. 

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Paul Donnelly

Associate

I am an Associate in the Insurance team with a particular interest in complex and sensitive litigation.

David Egan

Partner - Joint Head of Environment

I am a Partner at DWF, providing clear, expert advice on matters relating to crisis management, environmental incidents and fatal accidents.