The Enterprise and Regulatory Reform Act 2013 ("ERRA")

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1 SPECIAL EDITION DECEMBER 2013 The Enterprise and Regulatory Reform Act 2013 ("ERRA") Claims handlers will no doubt be aware that Section 69 of this Act applies to all causes of action arising after 1 October This amends Section 47 of the Health and Safety at Work Act 1974, and a breach of a statutory instrument (such as any of the Six Pack regulations) shall not now be actionable, except to the extent that the regulations expressly say that they are. An employee injured after 1 October will now have to pursue their action at common law, and will need to establish common law negligence on the part of an employer, unless a statute or regulation specifically allows a civil action to be pursued if there is a breach of the regulations. It is 115 years since Groves v Wimborne (1898) first established that an employee can rely solely on a breach of statutory duty when bringing a claim for damages, and claimant solicitors argue that the legislators have at a stroke removed over 100 years of progress in health and safety within the workplace. Background The changes date back to 2010, when Lord Young published his report "Common Sense, Common Safety" as a result of concerns over a perceived "compensation culture. Professor Lofstedt was asked to carry out a wholesale review of existing health and safety legislation, and in 2011 he published his report. A number of recommendations were made, including a review of any statute which imposed strict liability, but ERRA went far beyond that and removed civil liability for any breach of statutory duty, whether strict or otherwise.

2 A Brave New World? What will be the practical effect of such a seismic change? The statutory provisions with which we are all familiar, and which form the basis of the vast majority of damages claims at present, can no longer be relied on by a claimant. These regulations include, but are not limited to, the Personal Protective Equipment at Work Regulations 1992, Provision and Use of Work Equipment Regulations 1998, Workplace (Health Safety and Welfare) Regulations 1992, Work at Height Regulations 2005, and Workplace (Health Safety and Welfare) Regulations It has been suggested by the Association of Personal Injury Lawyers (APIL) that the removal of civil liability for breach of statutory duty will put workplace health and safety back into Victorian times. However, it must be remembered that these statutory regulations still exist, and the employer has a legal obligation to comply with the regulations. Failure to do so can still lead to criminal prosecution by the HSE, and to that extent the situation has not changed. The common law standard of care is constantly shifting, and a reasonable and prudent employer in 1898 is far removed from the standards applied to an employer in They are required to follow best practice and it is therefore likely that the HSE Approved Code of Practice for all regulations will still be used by a claimant as evidence that an employer is in breach of their common law duty, in much the same way that the Highway Code is applied to road traffic accidents. Although the injured employee cannot rely on a breach of statutory duty per se, we expect they may continue to cite breach of regulations as evidence of common law breach. The duty under many regulations is qualified rather than strict, for example the frequently quoted Regulation 12 (3) of the Workplace (Health Safety and Welfare Regulations) 1992 which requires an employer to ensure, so far as reasonably practicable (emphasis added) that the surface of every traffic route is kept free of any article or substance likely to cause a person to slip, trip or fall. It could be argued that such a qualified provision does little to alter the common law standard of care, and there is little or no practical effect in removing civil liability for a breach of this regulation. An employer who fails to operate a reasonable system of inspection, cleaning and maintenance of a traffic route will almost certainly be liable at common law if an employee sustains injury in a slipping accident. Similarly, an employer who takes no steps to comply with the Manual Handling Operation Regulations 1992 and fails to carry out any risk assessment, does not provide training and asks an employee to lift a load weighing 30 kg will face difficulty in demonstrating that they have acted as a reasonable employer given the guidance available to them from the HSE and other industry sources. In such circumstances the employer would be in breach of their Common Law duty, to provide a safe system of work. p2

3 Accidents involving Machinery One area where the removal of civil liability will bite is accidents arising from defects in machinery, where a claimant can no longer rely on Regulation 5(1) of the Provision and Use of Work Equipment Regulations 1998 ( PUWER ), which requires an employer to ensure that machinery is kept in an efficient state, in efficient working order and in good repair. The well-known and often quoted decision in Stark v Post Office (2000) confirmed that an employer was liable for injury arising from a defect in work equipment even though the injury could not have been discovered or prevented by reasonable examination of the equipment. The employer was liable where a piece of machinery failed even though the defect was latent. Claimants will now have to establish negligence on the part of their employer where they have been injured as a result of defective machinery. The Employer's Liability (Defective Equipment) Act 1969 ( ELDA ) may have faded into relative obscurity following the decision in Stark, but it still remains on the statute books and will be a valuable piece of legislation for claimants. This Act is of course a stand-alone statute, and is entirely unconnected with s47 of HSWA, hence it is unaffected by ERRA. Section 1 (1) states where an employee suffers personal injury as a consequence of a defect in equipment provided by his employer, and the defect is due wholly or partly to the fault of a third party, the injury shall be deemed to be also attributable to negligence on the part of the employer. Contributory negligence against the claimant and a contractual recovery from the supplier of the equipment is of course permitted, but the employer remains primarily liable. Claimants therefore remain in a very strong position if they have been injured as a result of defective equipment, even though they cannot rely on Regulation 5 of PUWER and Stark as they have done in the past. Of course where such a defect is entirely latent and not the fault of any party, ERRA will allow a defence to such a claim. A shift in the burden of proof? The burden of proof usually rests with a claimant to provide evidence showing that the employer was negligent. However, the common law doctrine of res ipsa loquitur (Latin for "the thing speaks for itself") may be used more frequently. The doctrine will apply if: the "thing" such as a piece of machinery was in the exclusive control of the defendant, and the circumstances of the accident are such that it would not have occurred without negligence A court would not expect a properly constructed and maintained piece of machinery to malfunction and cause injury, hence it is likely that the doctrine will be pleaded by claimants in many cases. The burden will then shift to the employer to demonstrate that they have not acted negligently, and the defect in machinery was not due to a lack of care on their part. p3

4 The provisions of the ELDA will of course apply even if the defect was due to the fault of a manufacturer or supplier. Consequently, in many cases the injured employee will still be able to obtain redress from his employer. In a routine slipping claim, Res ipsa loquitur will apply once a claimant has established a slipping hazard exists. This is already the accepted position in occupiers liability cases, for example in Ward v Tesco Stores (1976), which confirmed that as soon as a claimant has established a hazard was present, the burden is on the defendant to show that they have taken reasonable steps to prevent the accident. There will inevitably be some anomalies arising from these changes. For example, legislation which is entirely independent of HSWA is unaffected. An employee can bring a claim for damages arising from harassment by a fellow employee at work under the Protection from Harassment Act 2007, even though this legislation was introduced as a measure to deal with "stalking" was not intended to apply to a workplace situation. It may seem strange that an employee can pursue a claim for damages under for a breach of statutory duty under PHA, but can no longer allege a breach of regulations which were specifically introduced to protect the health and safety of employees. Public Sector Claims A two tier system could evolve, as employees of "emanations of the state" such as the NHS, emergency services and other public sector workers can allege a breach of the EC Framework Directive which preceded the introduction of the "six pack" regulations. In Sussex Ambulance NHS Trust v King (2002) the Court of Appeal accepted that Manual Handling Directive 90/269/EE could be applied directly. This could lead to a situation where a nurse who sustains a back injury whilst transferring a patient at a hospital can rely on the Framework Directive, whereas a care worker carrying out exactly the same task in a residential nursing home cannot. This would seem to be an inequitable situation and it is no doubt an issue which will come before the courts at some point. Pregnant Workers It should be noted that pregnant workers are exempt from the provisions of S69, as the Pregnant Workers Directive was enacted under the Management of Health and Safety at Work Regulations1999. Consequently, a pregnant employee can still rely on a breach of these regulations when bringing a civil claim. p4

5 The Future It does of course remain to be seen how the courts will approach cases based solely on common law negligence, and there are unlikely to be any reported decisions in the foreseeable future given that accidents occurring prior to 1 October 2013 can still be pleaded alleging breach of statutory duty. Disease cases, particularly those where there is a significant latency period, will continue to allege breach of statutory duty where the breach occurred prior to 1 October The removal of civil liability for a breach of statutory duty is a significant change, and is introduced within a few months of the Portal for low value EL and PL injury claims going live. The insurance industry is still trying to gauge the financial impact of cases dropping out of the Portal following a denial of liability. Although S69 introduces a further variable, the standard by which a reasonable employer will be judged by a court has not changed, and insurers will still need to be confident that the evidence provided by a policyholder will withstand close scrutiny by a court. Good reason for ensuring investigations are undertaken thoroughly and promptly. S69 of ERRA is intended to reduce the administrative burden on employers, some of whom were finding it almost impossible to obtain employers liability insurance. Will it have such an effect or should it been seen as a political legislative vehicle? There is a careful balancing act between protecting the health and safety of employees, and allowing businesses to develop without spending a disproportionate amount of time on what were perceived as meaningless administrative functions associated with health and safety within the workplace. The changes were not, and should not, prevent an injured employee from recovering damages from his employer where the accident occurred as a result of lack of care or failure to follow good practice. The contents are considered accurate at the time of publication but nothing in this document constitutes specific legal advice from Cunningham Lindsey or any of the sources from whom contributions have been gratefully received. It is intended only to highlight issues that may be of interest to those to whom it is sent directly. Cunningham Lindsey accepts no liability for errors or omissions in this document. The purpose of this publication is to provide a précis of recent interesting case law and legal developments. If you would like to request that particular areas of liability law and claims handling feature in future editions please contact our editor, Craig Faulkner. Craig works within Liability Services as a Complex Loss Specialist. He has 23 years experience in the insurance industry specialising in personal injury cases particularly catastrophic injuries, fatal accidents, bullying, stress, harassment, sports and the entertainment and leisure industry. Craig Faulkner FCII CIP Complex Loss Specialist Liability Services Lowry House 17 Marble Street Manchester M2 3AW Mobile: p5

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