Connecting to LinkedIn...

The end of ‘no fault’ liability for retailers


Peter Forshaw looks at the significant impact of the Enterprise & Regulatory Reform Act 2013 on civil liability claims involving retailers from 1 October 2013.

For years, breaches of statutory duty have been pleaded in support of civil claims alongside allegations of negligence, and indeed have often been a more certain route for claimants to successfully bring employers’ liability claims. This is particularly so in respect of accidents in the retail sector where the working environment involves many circumstances currently governed by statutory regulation governing the health and safety of employees. So, retail staff injured by tripping or slipping on items dropped on the floor by customers can rely on the provisions of the Workplace Regulations and plead their employer’s failure to comply with their statutory duty to keep the floor free from substances. Likewise a retail assistant injured whilst carrying boxes can rely on the Manual Handling Regulations and the specific provisions requiring employers to prevent the manual transportation of items where possible or to train staff and reduce the risk to the lowest level possible where carrying is essential.

Under some of the Regulations, a retail employer can be fixed with ‘strict’ (no fault) liability. For example if a retail employee is injured whilst operating a defective trolley or product, the employee will succeed in their claim under statutory regulation even if the employer was not aware of the defect and could have done nothing to prevent it. Many regard this as particularly unfair to retail employers and a disincetive for them to adopt strong safety practices.

All that changes from 1 October. Under section 69 of the Enterprise Act, in respect of any accidents (or breaches) after this date, injured employees in most cases can no longer found a claim directly on the basis of breach of statutory duty.

So what does this mean for retail employers and their injured employees?

The most publicised consequence is that it means the end of ‘no fault’ liability. In each and every case, injured employees will have to prove common law negligence. Often this will mean that where retail employers can prove they had reasonable, documented systems of risk-assessment, inspection, maintenance, training and the like in place, it will be possible in theory to mount a defence to more claims than was possible in the past and therefore it helps to redress the balance between protecting the safety of employees during their working day on the one hand and fairness to the diligent employer on the other.

The requirement for the claimant to prove his case in negligence, and the loss of an automatic entitlement to compensation in current strict liability cases could deter some claimants from claiming in the future, particularly those claims which are spurious or where the evidence the injured person has available to them is weak. Any reduction in claims can only be a good thing for retail employers and their insurers.

However this legislative change does not close the shop door on the claimant community. Retailers are still likely to face claims in most cases where one of their employees suffers an accident, just as they do at present:-

• Breaches of statutory duty are still likely to be relied upon by employees in support of allegations of negligence. Therefore retail employers cannot ignore the statutory rule book;

• The judiciary are still likely to be influenced by any such breaches when determining whether an employer has been negligent;

• It should also be noted that the amendments only relate to statutory duties relating to health and safety at work. Breaches of statutory duty will still be directly pleaded in other contexts, most notably in respect of accidents by customers.

There is a risk in all these changes that costs will increase as claimants have to prove more and it will be important for retailers and their insurers to bear pragmatism and cost in mind in respect of any claims pursued. However it is essential that retailers continue to adopt stringent health and safety policies, and retain appropriate documentation recording their systems, to either prevent accidents occurring in the first place or to enable their insurers to defend, where appropriate, any claims for common law negligence when they do.

It is in the interests of the retailer to do so to also avoid their insurers seeking recovery of any outlay under the insurance policy in circumstances where the safety policies are lacking either on paper or in practice. Consideration of negligence/fault in a wider range of cases could lead to greater examination by insurers of indemnity under ‘reasonable precaution’ clauses or identification of potential recklessness. Nothing in these or the other Government safety reforms should be seen as watering down the need to maintain safety on site.

So whilst in theory the reforms seem to help redress the balance for retail employers in the battleground of health and safety regulation, the benefit will not be as stark as it first appears and retail employers should continue to strive for the operation of diligent systems of health and safety.

Published on Monday 23 September by Editorial Assistant

Articles similar to Workplace Regulations

Articles similar to Comment

comments powered by Disqus