Personal injury lawyer says bill making workers prove company negligence favours insurance industry at expense of taxpayer
Injured employees will receive far less compensation under proposals aimed at preventing “over-compliance with health and safety at work regulations”, according to a government policy document.
The impact assessment, drawn up for the Department for Business, Innovation and Skills (BIS), says a newly inserted clause in the enterprise and regulatory reform bill will reduce the number of claims brought against companies but may increase the frequency of courtroom battles.
The far-reaching legislation will remove existing “strict liability” responsibilities imposed on all firms for accidents at work. In future, workers will have to prove company negligence.
The change has been condemned by a senior personal injury lawyer as “protecting the insurance industry at the expense of the taxpayer”. The TUC is also fighting the proposal.
The new clause 14 was slipped into the bill last month as part of the government’s campaign against “compensation culture” and excessive regulatory red tape.
Introducing the proposal, the Conservative minister Matthew Hancock declared: “It fulfils our commitment in the budget to introduce measures to reduce the burden of health and safety. It provides important reassurance to employers that they will be liable to pay compensation only when it can be proved that they have been negligent.”
The official impact assessment form drawn up by the Health and Safety Executive for BIS is explicit in setting out the consequences of overturning legislation in place since the 1970s.
“Claimants may pursue fewer cases and receive less compensation,” it states, while conceding that it may result in “a possible increase in certain legal costs where out-of-court settlements are ‘displaced’ into court”.
The document explains: “The policy objective is to address the unfairness which results when an employer, due to a strict liability duty, is found liable to pay damages to an employee despite having taken all reasonable steps to protect them.
“This policy makes an important contribution to the government’s wider reforms of the civil litigation system to tackle the perception of a compensation culture and the effect this has as a driver for over-compliance with health and safety at work regulations.”
But some experts fear it tilts the balance too far in favour of the employer. Andrew Ritchie QC, vice-chairman of the Personal Injuries Bar Association, said the bill would make it extremely difficult for those hurt at work to prove negligence.
Speaking in a personal capacity, he added: “It’s turning the clock back. Claims arising out of defective work equipment, including those by members of the armed forces, are obvious examples [where] an injured employee may face an all but impossible evidential burden.
“All of the relevant information will be in the employer’s possession, not the employee’s. That is why strict liability was imposed. The employer will be in control of the maintenance logs, the purchase receipts, and the machine itself.
“For the weeks after the accident the injured claimant will be lying in hospital. If the employer gets on and mends the machine the evidence will be destroyed.
“The only way for the employee to prove negligence is to have an engineer examine the machine to prove that the employer was at fault for letting the machine break down.”
Rather than insurance companies providing compensation, Ritchie said, the NHS and the UK’s social security system would have to shoulder the burden. He said: “Why should the taxpayer pay? This means that government prefers to throw the cost of supporting injured workers on to state benefits rather than let employers’ insurance companies pay the loss. This is a clear example of government protecting the insurance industry at the expense of the taxpayer.”
A TUC spokesperson said: “We are totally opposed to this change. It’s a disgrace. It was brought in without any consultation whatsoever. It will make it impossible for some injured workers to claim compensation in future.”
The Association of British Insurers welcomed the proposal: “This forms part of a package of reforms, following a review last year by an independent professor, to reduce the perceived burden of health and safety measures on businesses.
“The changes will encourage proportionate and preventive health and safety management, minimise the risk of over-compliance and reduce businesses’ fear of being sued, all of which stifle the ability of businesses to innovate, grow and compete.”
A BIS spokesman said: “The law is being changed so that in future claims can only be brought where negligence on the part of the employer can be proved. This is fairer, ensuring employers always have the opportunity to defend themselves on the basis of having done what was reasonable.
“Employees will continue to have the same level of health and safety protection currently provided under criminal law, which is not being changed.”
The bill has its second reading in the Lords on 14 November, where it may run into political opposition.
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