Tuesday, 2 July 2013
A WORLD TURNED UPSIDE DOWN
'They count it a sin, when poor people come in.'
From a 17th Century ballad, A world turned upside down
Many view s69 of the Enterprise and Regulatory Reform Act 2013, which will abolish the automatic right of action for breaches of statutory health and safety laws, as an unnecessary and regressive step. Equally clear is the unfortunate trend of this and previous governments of introducing reforms that appear to motivated less by informed inquiry than by political invective and grandstanding.
Take for example the Labour Government’s obsession with the ‘perception of compensation culture’. The government was reacting to a series of anecdotal reports, usually originating in the tabloid press. These featured various instances of imbecilic ‘risk adverse’ behavior by various minor officials. Apparently, adverse risk assessments were increasingly being cited by the over officious or credulous to justify absurd decisions to ban or cancel even the most mundane and ordinary time honoured pastimes. This was thought to be a reaction to the threat of being sued by an increasingly litigious society. We were told that this ‘compensation culture’, or the ‘perception’ of it, threatened to curb the enjoyment of many innocent and everyday activities. It decided that something had to be done, or at least, something had to be seen to be done.
The Government’s response was to enact section 1 of the Compensation Act 2006. This empty gesture was intended to curb the deterrent effect of litigation on ordinary people’s decision making. All section 1 actually achieved was to petrify in legislative form an evolving principle that the House of Lords had recently formulated with greater eloquence and clarity in Tomlinson v. Congleton Borough Council  UKHL 47.
The same phantasmagoric menace has lingered on to haunt our present government, this time on health and safety issues. In the opening passage to his 2010 report, Lord Young declared: ‘I believe that a ‘compensation culture’ driven by litigation is at the heart of the problems that so beset health and safety today’. However the Government’s own statistics undermined this assertion: they showed that far from employers liability claims numbers increasing, they were in fact reducing. That did not deter the Prime Minister from appointing Lord Young, as his ‘Enterprise Czar’ to tackle this issue. Then in 2012 the Prime Minister announced a startling New Year’s resolution: he vowed to ‘kill off the health and safety culture for good’.
It is worth noting that the latest Department for Work and Pensions’ Compensation Recovery Unit data actually shows a reduction of just over 7% in the number of employers’ liability claims from a high of 98,478 in 2006/2007 down to 91,115 in 2012/1013.
As every personal injury practitioner knows only too well, this Government has rushed through swathes of reform to our civil justice system with a missionary zeal, apparently in the belief that one can have too much of a good thing and that if ordinary people have access to justice that is too readily available, this is something that should be curbed. Apparently, fundamental rights now come with a price tag. Measures included the ineffective ban on referral fees. This was intended to curb all those annoying adverts and unsolicited calls and texts and to deliver substantial savings in legal costs; only it didn’t. It is common knowledge that the ban can circumvented with ease by claims management companies and lawyers: through alternative business structures and other tactical machinations. All the Government achieved was to introduce a series of anti-competitive measures that reduce consumer choice for legal services. Another disincentive to litigation was the dismantling of legal aid and ending the existing policy of awarding a successful party a full recovery of their reasonable and necessary legal costs and expenses under Legal Aid Sentencing and Punishment of Offenders Act 2013. Henceforth, claimants must fund part of the cost of pursuing their claim from their compensatory entitlement. These measures clearly work to the advantage of liability insurers and defendants at the expense of claimants who are ultimately denied a full recovery of damages.
What s69 of the Enterprise and Regulatory Reform Act 2013 will achieve it abolish the civil right of action for breaches of health and safety regulations. It should be remembered that a breach of statutory duty is only actionable where someone has actually suffered loss or injury caused by that breach. What the soon to be amended section 47 (2) of the Health and Safety Act 1974 presently achieves is to confer a right of action for a breach of statutory duty where loss of damages is caused thereby.
Section 47, in conferring the right of action, has nothing to do with providing windfall gains to the opportunistic. Nor does it, of itself, impose an absolute or strict liability on an employer. Indeed the number of instances where our health and safety regulations do impose absolute liability are exceedingly rare indeed. Furthermore, judicial attitudes towards strict has recently become more cautious and restrictive. There is a tendency to impose at least a degree of culpable foresight so as to avoid the injustice of holding an otherwise completely faultless employer liable. Take for example Supreme Court’s ruling in Baker v Quantum Clothing  UKSC. There, a majority ruled that the duty imposed by section 29 Factories Act 1961 to ensure that a place of work is ‘safe’ did not impose an absolute and unfaltering standard of safety. The duty is qualified by what the reasonable and prudent employer at that time would have understood to have been safe.
It was open to the Government to qualify by reference to reasonable practicability all strict liability health and safety legislation or to make other discrete adjustments, such as to extend the defence of reasonable practicability so that it applied uniformly across all health and safety strict liability claims. This would have been in keeping with its own expert’s recommendations. It will be recalled that Professor Löfstedt’s report on health and safety could find no case for radically altering current health and safety legislation. Instead the Government chose to ignore this and to throw the health and safety baby out with the bathwater. It has determined on abolishing completely the statutory actionability of breaches of health and safety regulations.
One of the justifications relied on by the Government was the perceived need to ease employers’ fears of being sued and to save them the cost of over compliance. This is muddled thinking. Surely the sensible way for any employer to address such concerns is to undertake a suitable and proportionate risk assessment and to implement suitable measures to protect his employees health and safety by either avoiding the risk completely or minimising it. If a business is foolish enough to squander resources on ineffective or unnecessary measures, then that suggests that their health and safety risk assessments are flawed.
Unfortunately section 69 seems likely to compromise the effectiveness of our health and safety legislation because it removes an important financial disincentive to illegal conduct, at the very time when the other health and safety sanctions and controls are increasingly compromised due to lack of funding. It is well known that the number of Health and Safety Executive inspections and prosecutions have declined sharply in recent years.
Another consequence of section 69 is that it will increase the evidential burden on a victim of establish a claim under the common law; tipping the balance of advantage in any litigation decisively in the employer’s favour.
It seems that we live in a diminished age, if as now, successive Governments view with intrinsic suspicion the ability of ordinary people to freely assert their legal rights under the Rule of Law through the courts system. Somehow a citizen’s entitlement to the protection afforded by health and safety laws, once perceived as a virtue, is now thought by some to be some kind of impediment to legitimate business interests. Be that as it may, s47 of the 1974 Act is destined to be turned on its head from 1 October 2013. The amendment, introduced by section 69 of the Enterprise and Regulatory Reform Act 2013, will remove the automatic right of action that s47 confers for breaches of a health and safety statutory duty.
Does anyone seriously believe that this will make an iota of difference to those employers, school heads and hospital administrators who cannot see the wood for the trees? Surely if a manager is not equipped to apply a common sense and proportionate approach to health and safety risk assessment, isn’t the logical response to retrain or replace them? Sadly, the legacy of this ill-conceived reform legacy lies in a different area. It will deny a large number of injured victims the redress they currently enjoy unless they are able to establish their claims under more stringent common law principles. For those lucky enough to be able to establish a common law claim, this will come at the expense of increased legal costs. For most claimants, these costs will have to be funded in part from the compensatory award. It seems likely the s47, as amended, will act as a positive disincentive for the less scrupulous. If the likelihood of civil liability is significantly reduced along with the risk of prosecution, then some employers will be motivated to ask: why do we need to bother with health and safety at all?
 Common Sense and Common Safety, Lord Young, October 2010
 David Cameron’s announcement, reported in the Guardian, 5 January 2012.
 See Department for Work and Pensions website: http://www.dwp.gov.uk/other-specialists/compensation-recovery-unit/performance-and-statistics/performance-statistics/
 Reclaiming health and safety for all: an independent review of health and safety legislation, May 2011