Section 69 of the Enterprise and Regulatory Reform Act is bad law

The Enterprise and Regulatory Reform Bill received Royal Assent on 25 April 2013, making it the Enterprise and Regulatory Reform Act 2013. The Act's purposes are many and various, spanning copyright, payments to company directors and employment law, to name but a few. Buried in its small print, however, is a provision that is causing a great deal concern among personal injury and human rights lawyers.

Section 61 of the Act was inserted at report stage - in other words, at the eleventh hour. It has become section 69, and purports to do away with a long-standing principle of British law, enshrined in section 47 of the Health and Safety at Work Act 1974. This contains a presumption that regulations made under the Act (in effect all health and safety regulations) carry civil liability for breach, unless expressly excluded.

The end of strict liability

Section 69 will reverse this presumption.

Earlier this year, on 6 March, the House of Lords debated the inclusion and effect of section 69, as it now is, in the statute. The lords ultimately voted to remove the clause by a very tight majority of 225-223. Despite this, on 16 April members of parliament chose to reject the lords' amendment to the bill by a majority of 286-259.

This makes for a seismic change. It marks the end of strict liability for employers when accidents at work occur, overturning over a century of settled law. Way back in 1898, the landmark decision in Groves v Lord Wimborne established the principle that legislation protecting safety in the workplace gives rise to an action for breach of statutory duty. The Enterprise and Regulatory Reform Act endeavours to throw this sensible and eminently fair principle out of the window.

To add to the confusion, it is proposed to exempt pregnant women from the effect of section 69: the Health and Safety Executive is consulting on this idea at present. Any such exclusion would surely be discriminatory, and just goes to show how poorly conceived this legislation is.

Bad law

It is interesting to note the drivers for section 69. Yet again, we find that spin about the mythological 'compensation culture' is at its heart. In 2010, when David Cameron became prime minister, he declared his intention to rid businesses of red tape. A picture was painted of employers being unable to get on with making a profit because of onerous health and safety legislation and a supposedly crippling number of bogus claims for accidents at work.

The statistics tell us otherwise, and the spin continues with the deliberate skewing of a report by Professor Ragnar Löfstedt, itself commissioned by the government. Professor Löfstedt recommended that regulatory provisions imposing strict liability should be reviewed and either qualified with "reasonably practicable" where strict liability is not absolutely necessary or amended to prevent civil liability from attaching to a breach of those provisions. In section 69, the government goes much further than Professor Löfstedt recommended – and has the cheek to proclaim that it is implementing his proposals.

Section 69 is a very bad piece of law. It loads the dice against individuals who are unfortunate enough to be injured at work, meaning that they will have to prove negligence. In today's world of complex machinery, this will be costly and difficult; indeed, the costs of proving a claim may not, under new court rules, be proportionate to the nature of the injury. Claims may not even get off first base: the effect is to strip workers of their rights and the comfort that if something goes wrong at work, at least they will be compensated.

Vested interests

There is another knock-on effect of section 69. The government doubtless thinks that it will be good for business, but the opposite is true. It can only have a negative effect on employer-employee relations. Moreover, as Baroness Ford put it on 14 November last year:

"I have never enjoyed myself as much as when I set up my own businesses. But I never got up in the morning wondering how to get around the health and safety regime, wishing that employment law was weak, looking to dilute people's human rights, or thinking that all my Christmases would come if only the competition authorities were reorganised. I do not believe for one minute I was unusual in that. Do the Government really think that this Bill will make one iota of difference to the small business economy?"

Lastly, it is worth remembering that since 1972 employers have been compelled to insure against liability for injuries caused at work. Section 69 has crept onto the statute books, effectively eroding employees' workplace rights and entitlement to claim for injuries which are not their fault, at a time when a number of MPs have shareholdings in insurance companies.

Anyone for vested interests motivating our politicians? Surely not?

Simmons v Castle: a small step in the right direction, but sadly that’s all

The Court of Appeal recently declared that general damages in most tort actions are to increase from 1 April, 2013. That’s good news, isn’t it?

I wish it was, but a closer look reveals that it isn’t necessarily so. The Court of Appeal’s judgment came in the case of Simmons v Castle. The endorsement of a settlement between the appellant motorcyclist and respondent car driver saw the Court of Appeal hold that it had an ongoing responsibility and the power to monitor and set the guideline rates for general damages in tort claims, including personal injury actions. Any such rates would be neither rules of law nor practice rules, but judges at first instance should consider themselves bound by them.

Hence, their Lordships ruled in favour of an increase in damages – but only by 10 per cent. The judgment sent insurers calculating  by how much they will need to  increase consumers’ premiums. They, along with the rest of us, had assumed that any increase in general damages would come through the implementation of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO), also in April next year. But at the same time as insurers lament the guidelines of Simmons v Castle, so do personal injury lawyers who work at the coalface. The fact is that 10 per cent is nowhere near a large enough increase in rates for damages that have remained static and too low for far too long

This is not just the view of a claimant solicitor. Over 10 years ago, in 1999, the Law Commission Report No. 257 concluded that in cases where general damages exceeded £3,000 they should increase between 50% and 100% (with an appropriate tapering rise for cases where general damages were between £2,001 and £3,000). The Commission found that damages were not generally commensurate with claimants’ losses but also that “the ongoing non-pecuniary effects of many injuries are far greater than anticipated by victims at the time that they receive their compensation.” The Commission’s conclusions were reached after extensive research and an opinion poll on public attitudes to levels of compensation.

This issue was considered by the Court of Appeal in the 2000 case of Heil v Rankin. Regrettably, the recommendations of the Law Commission were not generally accepted. The Court held that in cases where the general damages exceeded £10,000 they should thereafter increase by 33%. However, there would be no increase for cases where general damages were under £10,000.

Little has happened since the Heil judgment. The recommendations of the Law Commission have not been implemented. Meanwhile, the cost of litigation has continued to rise. LASPO continues to wend its way through the legislative process, but there is no sign of provision for well-thought out increase in levels of damages envisaged by the Law Commission – as ought to be the case.

Now, along comes a recommended increase of 10 per cent, originally recommended by Lord Justice Jackson, implemented before April next thanks to Simmons v Castle. In some ways, we should be grateful as some were doubtful such a decision would come at all, but the truth is that as a society we are still woefully under-compensating injured people. We are still a long way from a collective endorsement of carefully considered recommendations which were made by experts, after due diligence and research, as long ago as 1999. The 'Simmons' adjustment does not even counterbalance the LASPO none recoverability provisions. As such, it is a step in the right direction, but that’s all it is.

Into the Twitterverse

For many lawyers of a certain age, Twitter is baffling. To be fair, it’s not just lawyers who are perplexed by the 140-character publishing phenomenon that is Twitter. Many people of middle age and beyond find Twitter incomprehensible too; including myself until relatively recently I have to confess. Why, they ask, would anyone want to share thoughts that are, by definition, on the minimalist side – and who on earth is interested?

A cursory glance at some Twitter statistics provides ammunition against the opponents. Stephen Fry has over 4.5 million followers; as of 15 August, @BBCBreaking (BBC Breaking News) could boast of 3,824,931 followers. From celebrities to news channels, then, Twitter has emerged as a viable – in fact, vital – means of disseminating their message and generating interest in either their lives (we can all know what Mr Fry had for breakfast, if we wish) or what they have to say. Needless to say, companies have seen value in Twitter, too: organisations from Google Inc to Starbucks have developed a strong Twitter presence, with legions of followers.

At Spencers we haven’t been resistant to Twitter, but it’s fair to say that we haven’t utilised it as much as we should. Not any more: look out for plenty of tweets from yours truly from now on. I think Twitter is a great way of conveying news and information about developments in the PI legal sector, from referral fees to plans to extend the RTA Portal. Please take a look at @SpencerSols and @JohnSpencerLaw for more.

Meantime, for those of you who may also have been slow to Twitter but now see its value, I’ve been brushing up on my media law. There are a number of pitfalls to be wary of, and here, indeed, one can see the difference between the generations. People of my age, whether legally qualified or not, will readily understand that legal liability could flow from the misuse of software like Twitter, while the younger (especially teenage) generation probably have little or no idea of what could go wrong as a consequence of a poorly judged tweet. Here, then, are some guidelines.

1. A tweet is subject to the law of libel. While my friends in media law tell me that this isn’t entirely settled law, it is generally agreed that a tweet has sufficient permanence to be regarded as publication in written form (rather than a verbal communication, which would be treated as slander). This means that something libellous – for example, saying that someone is a liar, or dishonest, or corrupt – could lead to the publisher being sued. The usual defences to defamation claims will apply, but if in doubt, don’t tweet.
2. Tweets can fall foul of the Communications Act 2003, which prohibits the sending of grossly offensive communications or those of an indecent, obscene or menacing character. This provision was recently in the news with the conviction of Paul Chambers for sending a tweet saying “... I am blowing the airport sky high”. In a victory for common sense, Mr Chambers’ conviction was overturned, but persistently malicious or threatening tweeters won’t be so lucky. The moral is: don’t use Twitter to vent your fury.
3. Likewise, don’t use Twitter to harass someone. Doing so on two or more occasions could amount to harassment under the Protection from Harassment Act 1997.
4. If you intend to disclose personal or confidential information on Twitter, take care: the Data Protection Act 1998 may apply. For employees authorised by their employers to tweet, take care not to disseminate personal information about colleagues – and be careful, however upset  by your boss you may be, not to disparage your employer via Twitter. You would almost certainly be in breach of your employment contract.
5. There are other ways in which Twitter could be misused. A tweet could amount to a misrepresentation, it could amount to a fraudulent statement, or it could be actionable as a malicious falsehood.

The bottom line is this: as with all social media, use your common sense. If you behave courteously and respectfully, you won’t break any laws. If you have something useful to say, you should find that you acquire followers who enhance your personal reputation or that of your business. If you can help people into the bargain – by keeping them up to date with developments in their sector and sharing information – so much the better. It’s this that we hope to do via @SpencerSols, so please take a look and let us know how we’re doing.

Post-Chicago Musings

Last week my first overseas blog appeared. It came all the way from Chicago, Illinois, where I was attending the American Association for Justice annual convention. This week’s blog again has an American flavour, as I reflect on lessons learnt during my stay at the Chicago Hilton, where the conference was held.

I’d like to add to the two general points I made last week (that wherever one finds oneself in the world, claimant lawyers are engaged in an adversarial battle with insurers, and that claimant lawyers here and in America seem to be up against a legislative drive to reduce or cap the costs they can recover). In a sense, what I am going to say is also a general observation, but nevertheless I think it’s an important one.

Put simply, I think that rather than knocking the American litigation landscape we should look at it objectively and ask if it has a thing or two to teach us. I think it does, for reasons I will explain.

The British tendency is to categorise American lawyers as ambulance chasers (or worse). Our press regularly skews coverage of American legal proceedings to paint a picture of a system in which pre-trial jury selection is bizarre, and where US lawyers habitually exaggerate or even invent claims. But while there is rarely ever smoke without fire – some claims about the excesses of American lawyers are undoubtedly true – if you scratch a little deeper there is much to be said in favour of the American way.

The main reason I say this is because the American system is underpinned by a belief that the client comes first. An American claimant who secures recompense for an injury is not condemned as being part of a ‘compensation culture’. Instead, it is accepted and understood that a claimant’s lawyer will do everything in his or her power to gain as much as is properly due for a client. The client’s needs come first, which means that no stone is left unturned in the preparation of a case. Yes, this dovetails with a financial incentive for the lawyer involved, but in America there is recognition that lawyers have businesses to run. That they might make a profit is not viewed as something wrong and unpalatable.

Contrast the way in which civil litigation has developed in Britain – and the way it is heading. Recent years have seen successive reforms which, put together, make it harder and harder for British solicitors to represent clients to the best of their ability. There is a sense, here, that lawyers who make a decent living are somehow ‘evil’, that they fuel the ‘compensation culture’ which is so hated by the government.  This also leads to a very worrying knock-on effect for clients potentially, in creating an environment in which early settlement, at a fraction of what a client could have obtained in damages, will be become difficult to resist. There is some statistical  evidence of this which has recently been presented to the Ministry of Justice by Professor Fenn.

The emphasis, here, is on getting rid of claims quickly, at low cost. In America, the focus is on getting the right result. Here, the beneficiaries of the system can be insurers; in the States, the client’s case is the main thing, and is never or at least rarely sacrificed..

Doubtless there are issues with the American personal injury system. As I say, the point I am making is a general one. Likewise, the way we do things here is not all bad. But my trip to America reminded me of the real role of the personal injury lawyer: to serve injured people. I think we would all do well to remember this rather than uncritically accept governmental  soundings off about the ‘compensation culture’.

Or, put another way, if you were the victim of a serious accident, through no fault of your own, would you rather obtain the maximum compensation to which you were entitled – or settle the case early so that the insurers didn’t have to make a hefty payout?

Ex Turpi Causa in RTA Cases: about as clear as mud

Should a thief who is injured in the course of a burglary be able to sue a house-owner if, say, a creaking and rotten floorboard collapsed as he was tiptoeing around the house, causing him to fall and break his arm?

Many of us will unhesitatingly say ‘no, of course not’. Others might go further and say that if the home-owner went on to injure the burglar, rather than help him, he should not, in law, be liable. After all, as the tabloid press like to remind us, an Englishman’s home is his castle.

But what of a burglar injured by the negligent driving of a co-conspirator while making a getaway? This scenario was recently before the court in the case of Joyce v O’Brien and Tradex. Mr O’Brien stole a pair of ladders from the front garden of a house and put them in the back of a Ford Transit van. He sped off, with his nephew (Mr Joyce) standing on a footplate at the rear of the van, holding onto the ladders. Having careered around a couple of corners, Joyce lost his grip, fell and sustained a serious head injury.

Joyce went to law.  He argued that O’Brien’s insurer, Tradex, should pay him compensation, which raised an interesting point of law: given that both men were engaged in a joint criminal enterprise, did the ex turpi causa principle apply? Latin scholars will recall the maxim in full – it is ‘ex turpi causa non oritur actio’. In plain English, it means one cannot seek redress where one has first acted dishonourably. 

The court held that Joyce’s injuries were caused not just by O’Brien’s driving but by his nephew’s precarious position on the footplate, where he was attempting to secure the ladder as well as himself. There was therefore a causation problem with Joyce’s claim, but it also failed as a matter of general public policy. As Richard Lynagh QC and Suzanne Chalmers, who represented Tradex, have it here: “a participant in a joint enterprise of theft which involves dangerous driving in order to escape the scene cannot recover for injuries suffered in the course of that enterprise.” Moreover, a driver could not owe a duty of care to his co-conspirator in a joint enterprise of theft.

The case is interesting in its own right, and it put me in mind of two recent Court of Appeal decisions. The first is Churchill Insurance v Wilkinson [2010]. Here, the passengers, who were insured, allowed an uninsured driver behind the wheel. The second case is Delaney v Pickett, heard in 2011. This case involved a reckless driver who was found to be a habitual cannabis user who was convicted of dangerous driving. In both cases, the insurers argued that the accident victims had breached their policy terms and were therefore not entitled to compensation.

There is an important backdrop to both cases – section 158 (1) of the Road Traffic Act, which gives an insurer the right to recover any outlay from their insured where their insured has allowed the use of a vehicle by an uninsured driver. There is also a related case, namely Cockayne v Evans, in which Ms Evans gave permission to Adam Cockayne to drive her motorcycle without giving any thought to whether he was insured or not (he wasn’t).

Taken as a whole, the three cases are complicated. The facts differ in each, and it would be inappropriate to rehearse them all here. However, suffice to say that Wilkinson V Churchill ultimately went to the European Court of Justice, which decided that section 151 (8) does not accord with European Directives on the harmonisation of motor insurance. In other words, it cannot operate to prevent a claimant from a right of entitlement to damages, where the claimant is a victim, albeit that the claimant permitted the use of a vehicle by an uninsured person.

Despite this, the Court of Appeal decided not to consider the Wilkinson case when it came to decide the Delaney v Pickett appeal. This, too, visited ex turpi causa territory, because the vehicle being driven was being used to buy and then resell cannabis. The Court of Appeal opted to treat the claim as an uninsured driver claim pursuant to section 143 of the RTA (which governs Motor Insurance Bureau claims) but concluded that it could be legitimately excluded.

Confused? Don’t worry – everyone in the PI sector is too. The bottom line is that while each case should be treated on its own facts, there is an absence of congruity between domestic law and European Directives on motor insurance. Watch this space: just as thieves will continue to bungle their getaways, it’s a certainty that the law here will soon be tested again at ECJ level.