Thursday, July 27, 2017

The end of ‘no fault’ liability for retailers

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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

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