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Employers' liability and the Enterprise and Regulatory Reform Act 2013: a period of uncertainty begins

At a glance

Section 69 of the Enterprise and Regulatory Reform Act (E&RRA) is now in force, but what it means to insurers when dealing with employers’ liability (EL) claims for accidents occurring on or after 1 October 2013 is not yet clear. In the short term, we are entering a period of uncertainty as some of the issues discussed below work their way through the courts, in some cases causing delay and additional cost. 

Longer term, the position of employers and their insurers will improve as certain types of claim which had to be settled under the old law because of strict liability duties arising under regulations, will become defendable where the employer has taken reasonable steps to comply with its common law duty of care. Claimants will probably be able to use the regulations and HSE advice as evidence of what an employer should reasonably have done. On the other hand additional investigations and accompanying costs will arise for both claimants and insurers in investigating liability issues.

However, the reform should stabilise and may reduce the number of new EL notifications in the years ahead.

The uncertainty begins


The Health and Safety at Work etc Act 1974 (H&SWA) contained a presumption that regulations made under it would impose not only criminal liability, but also civil liability for any breach of those regulations. Section 47 provided that civil liability would arise for breach of regulations except to the extent that the specific regulations themselves said otherwise.

In 1992, the UK brought its own domestic law into compliance with European directives protecting workers’ health and safety, through the Management of Health and Safety at Work Regulations as part of what became known as “the six pack regulations”. From 1992, breach of these regulations as well as new health and safety regulations gave rise to civil liability unless the regulations themselves provided otherwise.

There are now over 200 health and safety regulations of that type, most of them providing for civil liability.

A changing claims climate

Concerns over the cost of claims in recent years sparked Lord Justice Jackson’s review of civil litigation costs which has resulted in the current civil justice reforms.

Another key change has been the development of the view of the Prime Minister and others that the UK has acquired a “compensation culture” and that health and safety law itself needed reform.

What directly led to the reform brought about by the E&RRA were two reports, one by Lord Young “Common sense, common safety” which poured scorn on the pursuit of claims by aggressive “no win no fee” agreements between claimants and their lawyers and another by Professor Ragner Löfstedt, who recommended that regulatory provisions imposing strict liability be reviewed. Both reports made reference to the Court of Appeal’s judgment in 2000 in Stark v The Post Office as the decision which showed most clearly the result to which UK law had been led. Mr Stark, working as a delivery postman, fell off a bicycle supplied to him by his employers when without warning a stirrup broke either because of metal fatigue or some manufacturing defect which was unknown and had not been discovered even though a reasonable maintenance system had been operated. Mr Stark lost his case in negligence, but because the obligation under the Provision and Use of Work Equipment Regulations 1992 to maintain the bicycle as work equipment “in an efficient state, in efficient working order and in good repair” was seen as a strict liability obligation, the claim under the regulations succeeded. The Post Office had done all that was reasonable to maintain and service the bike, but was still found liable.

The government response: s.69 E&RRA

The government’s response was to insert what became section 69 of the E&RRA into the Bill. Its course proved controversial and there was much opposition to it in both Houses of Parliament, before it was passed by the House of Lords.

Section 69 is now in force for accidents occurring on or after 1 October 2013. Section 47 of the H&SWA has been reversed to provide that any breach of regulations will not be civilly actionable except where (in the case of existing regulations) regulations are made providing for that, or in the case of new regulations, those regulations specifically state that breach will give rise to civil liability. To date, the Health and Safety at Work etc Act 1974 (Civil Liability) (Exceptions) Regulations 2013 only exclude certain provisions in the case of pregnant workers and new mothers.

How will it work in practice?

It is of course only now that the first claims for new accidents happening after 1 October 2013 are beginning to be seen, and it will be a while yet before the first of those claims moves towards a trial at which some of the difficult issues remaining will have to be tested. There is still opposition to the reform from the claimant and trade union lobby. The risk cannot be excluded that a future government might amend section 69, but even if it did, the amendment would not be retrospective and accidents occurring between 1 October 2013 and the date of any amendment would still have to be dealt with under what is now the current law.

1. The European angle: a possible challenge to S.69?

In passing section 69, and in removing civil liability for breach of the regulations, is the UK now in breach of its EU Treaty obligations? Whilst one cannot rule out the possibility of a challenge by the European Commission to the UK government’s decision to implement section 69, on the basis of a similar unsuccessful challenge against the UK by the Commission of the European Communities in case C-127/05 in 2007, it is probably the case that the new law is compliant with the UK government’s Treaty obligations.

Some commentators suggest that the UK is no longer properly implementing the directives by having removed civil liability.  They say that individual claimants could either try to rely on the directives themselves, or if they cannot do so seek damages instead from the UK government under the principles seen in operation in Francovich v Italy. In our view, they will probably be disappointed, as the fact that the regulations still impose criminal liability for breach will be sufficient.

The new Act therefore means that:

  • claimants can no longer allege direct causes of action based on breaches of the regulations where the accident occurs on or after 1 October 2013.

  • Instead, their claims will be for negligence, based on their employer’s alleged breach of the common law duty of care owed by employers, the law on which has been developed over the years.

  • The burden of proof will be on claimants throughout, rather than, as sometimes occurs under the regulations, part of that burden being on the employer to show that it took reasonably practicable steps to achieve an objective.

The regulations will remain key for the criminal law, because employers who do not comply with them will be at risk of prosecution by the HSE.

2. Can the regulations still be used as evidence of negligence?

Accepting that claimants can no longer specifically set out in their letters of claim or in their particulars of claim any claims based directly on breach of the regulations, to what extent can the regulations still be used as evidence of what is reasonable when a negligence claim is pursued?

It does seem clear that the regulations that are the subject of section 69 will in fact still be of some relevance to claims for damages made for accidents after 1 October 2013 in considering the extent of the employer’s common law duty of care. It was already a settled legal principle that the existence of a statutory duty and what was required to be done under it could be relied on as evidence of what a reasonable employer would have done under its common law duty in relation to foreseeing particular risks or taking a specific precaution against them.

The position was also taken further by the government as the E&RRA passed through Parliament with Viscount Younger on behalf of the government in the House of Lords stating:

“…The codified framework of requirements, responsibilities and duties placed on employers to protect their employees from harm are unchanged, and will remain relevant as evidence of the standards expected of employers in future civil claims for negligence.”


In the same debate, another Conservative peer, 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"


For new accidents after 1 October 2013 we should still expect reference to the regulations within letters of claim and within particulars of claim, but with the argument that breaches of regulations should be seen as being of assistance to interpretation of the extent of the common law duty. What it will not be possible to do, however, is for claimants to argue that where a strict liability duty arises under regulations, that that higher level of duty should be incorporated into the common law duty. This is because the common law duty is limited to one of reasonableness, and it would surely not be reasonable to impose at common law the type of strict duty seen to have arisen under the regulations in the Stark v The Post Office case.

Claimants may also try to argue that publications by the HSE such as Approved Codes of Practice and their guidance notes should also be seen as material which the court should take into account when considering what it was reasonable for the employer to have done. They are likely to argue that various types of information issued by the HSE should be taken into account in this way, in the same way as in accordance with the often quoted judgment in Stokes v GKN, that:

The overall test is still the conduct of the reasonable and prudent employer taking positive thought for the safety of his workers in the light of what he knows or ought to know; where there is a recognised and general practice which has been followed for a substantial period in similar circumstances without mishap, he is entitled to follow it, unless in the light of common sense or newer knowledge it is clearly bad; but where there is a developing knowledge, he must keep reasonably abreast of it and not be slow to apply it"





3. 'Emanations of the state': another route for claimants?

Will another possible route for claimants be reliance on the EU Directives themselves against what are termed "emanations of the state"?

It is established law that directives, including those addressing health and safety issues, can give a cause of action directly against ‘emanations of the state’. The definition of what are emanations of the state has been tested in case law and includes all government departments, local authorities, health authorities, police authorities, nationalised corporations and private water companies. Society has moved on somewhat since some of the cases setting these precedents, and it is now often the case that both public and private money is jointly funding a potential defendant, where the answer to the question will be more uncertain. The ultimate test however is that an emanation of the state should provide a public service, should be under the control of the state, and have powers in excess of those held by private entities.

Some claimant lawyers are suggesting that the E&RRA has not changed the law at all in relation to public defendants of this type, because claimants pursuing claims against them can directly allege breaches of the directives, but they then go on to complain that a two tier system operates as it is accepted that they will not be able to rely on the directives against non-public defendants.

Our view is that whilst as with the regulations themselves, the directives continue to exist, and can as they always have done establish a cause of action against public defendants, in practice it will now be more difficult for them to do so. It was clearly the government's intention when steering the new Act through Parliament that the regulations, and implicitly the directives standing behind them, would no longer establish a direct cause of action. If in fact it is right that claimants are able to continue to use the regulations as well as the HSE publications as aids to interpreting what is or what is not negligent, then there may be less reason for claimants to want to pursue directive-based causes of action against public defendants anyway. Some claimants however are likely to press the point in a case against a public defendant where a directive imposes a strict liability obligation, with the aim of setting a precedent.

4. Claims in the new territory

The common law duty of care

In the new regime for post 1 October 2013 accidents, defendants should get used to allegations of breach of the general duty on an employer to take reasonable care for the health and safety of its workers. Case law establishes that there are four main elements to that duty, that is to take reasonable care to provide safe plant, premises, fellow employees and system of work. Additionally, at common law, an employer will be vicariously liable for the negligence of any of the claimant's co-workers. Some of the old case law that defendants and their insurers were used to dealing with before the six pack was introduced in 1992 will need to be returned to. Pre 1992, there were a number of industry specific regulations alongside the Factories Act, but like that Act itself many of these were repealed at the time of the introduction of the six pack regulations. Those pre 1992 Acts and Regulations remain repealed, so that claimants will need to turn instead to the common law duty of care, aided by reference to the regulations and other HSE material, if claimants’ attempts to rely on that type of material succeed.

Accidents involving machinery

Claimant lawyers appear to be particularly worried about accidents involving machinery, claiming that whereas it was relatively easy to establish liability in factory based accidents both under the Factories Act, and then under the broader application of the Provision and Use of Work Equipment Regulations (each of which were strict in their approach to liability issues concerning guarding of the machine), claimants will now be left in a more awkward situation where they will have to prove some fault in the employer's maintenance and servicing of the machine, or knowledge of a particular defect.

In that context, it is worthwhile remembering that the Employer's Liability (Defective Equipment) Act 1969 remains in force. This provides that where a defect in equipment provided for use at work causes injury and that defect is wholly or partly due to the fault of a third party other than the employer, then the injury is deemed to have been caused by the negligence of the employer. This will assist claimants where there is criticism to be made of the manufacturer of the machine, or any servicing of it carried out by contractors.

In machinery cases, claimant lawyers argue that they will want disclosure of a variety of records in relation to the operation of the machine, and will wish to involve engineers to investigate machinery accidents as used at one time to be the norm.

Some additional costs will inevitably be incurred by both claimants and insurers, in investigating certain types of claim in the new landscape where liability issues are likely to be less clear cut - machinery cases are an example of this.

5. Overall impact

The reform brought in by the E&RRA should assist in removing the concept of strict liability from EL claims, which after all was the main reason for the government identifying this as an area of reform. Less often should employers be held to be liable where they have done all that is reasonable to make the workplace safe. There will be a limited percentage of claims which under the old law had to be settled, but which can now be defended.

On the other hand, it is right to recognise that additional costs will be incurred across a range of EL claims as liability issues have to be investigated against the background of whether or not the employer had taken reasonable care. There will also be short term effects with the law entering a period of uncertainty as the issues identified here are resolved in the courts, which will add delay and expense to the claims process.



For more information contact Simon Denyer, Partner, on 0161 604 1551

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.