Enterprise Act: An Act of treachery

It’s telling that while some legislation is passed with a great deal of pomp and ceremony, others creep through in the dead of the night without even a whimper and make their way
into the statute books as the dirty secret of the government of the day.

Meaningless title

Section 69 of the Enterprise and Regulatory Reform Act is one such beast. The name should give it away: a meaningless title to hide the most devastating of laws. An Act which few had heard of before the last-minute email campaigns and petitions brought it to the attention of the larger legal fraternity.

As we all now know, section 69 of the new Act repeals section 47 of the Health and Safety at Work Act 1974. For an employee, section 47 was the greatest section they never knew existed, enshrining in law a principle which was first established in 1898. Section 47 meant that if an employee suffered
an accident at work there was a presumption that
if their employer had breached health and safety regulations they would be obliged to compensate the worker.

It was there to protect the workers. It was there so that injured employees had something to back them up when they approached their bosses with their concerns and requests. And now it’s gone. Employees in 2014 have one less right than they had in the days of workhouses and child chimney sweeps during the reign of Queen Victoria.

Since 1 October 2013 an injured worker has to prove that his employer was guilty of negligence. This means that the burden of proving an employer has caused needless injury or death is thrown back onto the victim. The law that was meant to protect ‘the little man’ has been tilted deliberately in favour of the employer, the person who controls the workplace, controls the work equipment and who is responsible for hiring and firing – including anyone who might choose to give the injured employee the statement they so desperately need to prove their case.

Employer liability

Six or so months later it is still too early to say how the reforms will impact on personal injury claims and the way solicitors do business. Perhaps it won’t all be bad. As every PI lawyer worth their CPD points now knows, remarkably (and perhaps further evidence of how poorly thought through the legislation was) the new Act doesn’t address European legislation, which allows employees of ‘emanations of the state’ to bring claims. So, any government employee injured as a result of a breach of European health and safety directives can sue their government employer.

Coming hot on the heels of the introduction of the online employer liability (EL) portal, fixed fees and qualified one-way cost shifting (QOCS), there is a suspicion that the number of fast-track EL claims being taken on by firms may actually increase with a ‘stack ’em high, sell ’em cheap’ approach being taken.

Such an approach would seem sensible in the short term, at least until news begins to filter back from the front line on how the courts intend to deal with matters. One would hope that judges will look sympathetically on the injured employee and ‘help’ justice find a way, but as we’ve seen from effect of the decision in Mitchell, it doesn’t take much for there to be panic in the ranks.

A few decisions in employers’ favour and what right-minded firm is going to want to invest time and resources in hunting down disclosure, witnesses and experts given the WIP they’ll have to write off?

For the higher value claims it is reasonable to expect they will take longer, be more complicated and the legal costs will be consequently higher.
If so, and mindful of QOCS, it will be interesting to see if insurers seek to justify increased premiums as
a result.

Doubtless, the majority of lawyers will adapt and survive, though redundancies of the junior members of staff (similar to those at the conveyancing factories when that bubble burst) shouldn’t come as a surprise. Those who may not be so lucky are the potential injury victims stripped of protection by the Act. They will be the first to feel the impact of the changes and it would appear that we are already seeing the evidence of this.

Bigger picture

To appreciate its full impact, section 69 must be considered as part of a bigger picture. It needs to be looked at alongside the 35 per cent cuts imposed on the HSE since 2011, the government moratorium on proactive and unannounced inspections in sectors it considers to be ‘low risk’ (including in the agricultural, manufacturing, docks and whole of the public sector) which leave inspectors helpless to prevent accidents in those areas and alongside, for example, the closure of the HSE advice phone line.

It needs to be considered alongside articles such as that in the Observer on 12 April 2014 entitled ‘UK construction industry warned of “timebomb” from health and safety cuts’. In this piece the former government adviser, Baroness Donaghy, raised the likelihood that a post-recession upturn in construction, coupled with an under-funded HSE, will see corners cut and accidents and deaths increase because during such times skills are lost and the insufficiently skilled are taken on.

Concerns were voiced because the number of site-related deaths in London, where construction is strongest, has doubled recently. In 2010 Baroness Donaghy was author of ‘One Death too Many’, a report which called for more funding for the HSE to allow it to function properly as a regulator. The report was resolutely ignored by the government.

Also sadly ignored were Lord McKenzie of Luton’s closing remarks when addressing the House of Lords prior to the passing of the Act: “We should be mindful that compensation should not be viewed as some bonus or prize for an individual or family. Who would not want their life back to where it was before an accident rather than have compensation? Which family would not prefer to have a loved one, who will never return home, back with them again?” SJ