Enterprise and Regulatory Reform Bill

Lord McKenzie of Luton Excerpts

Wednesday 6th March 2013 Lords Chamber

Moved by

[Lord McKenzie of Luton]

80A: Clause 62, page 60, line 38, leave out subsection (3)

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[Lord McKenzie of Luton]

My Lords, Amendment 80A stands also in the names of the noble and learned Lord, Lord Hardie, and the noble Lord, Lord Wigley. I shall speak to Amendment 80B, which also stands in the name of the noble Lord, Lord Wigley. I should also make it clear that we strongly support Amendment 81 and look forward to hearing from my noble friend Lady Turner and the other distinguished noble and noble and learned Lords who have put their names to that amendment.

Amendment 80A is an attempt to defeat the fundamental purpose of Clause 62; effectively, it is an alternative to removing that clause. Clause 62 seeks to remove civil liability from breaches of duty imposed by health and safety regulations, and our amendment would reinstate that right of action. I acknowledge here that it would require same consequential tidying at Third Reading.

We should be under no illusions about the serious consequences which will flow from Clause 62, should it be allowed to remain unamended. It will remove the existing right of an employee to rely on a breach of health and safety legislation in any claims for personal injury, so unless any exceptions are to be applied it will be possible to claim compensation for breaches of health and safety regulations only if it can be proved that the duty holder has been negligent. We are aware of just one exception. As the Explanatory Notes to the Bill state:

“This means that in future, for all relevant claims, duty-holders will only have to defend themselves against negligence”.

The Government have sought cover for their clause by citing the report of Professor Löfstedt, Reclaiming Health and Safety for All. A small section of that report focused on strict liability, where the professor recommended that there should be a review of such provisions and that they be either qualified with “reasonably practicable” or amended to prevent civil liability attaching to such provisions. In the event, of course, the Government have not undertaken a review and are going much further than the professor in seeking to remove civil liability from all breaches of health and safety regulations. The Government have focused on strict liability as being unfair because an employer could be found liable to pay damages to an employee, despite having taken all reasonable steps to protect them.

However, that does not give fair recognition to the fact that strict liability applies in very limited circumstances and where injured employees would otherwise face a near impossible evidential burden. Overwhelmingly, the duties are qualified by the phrase, “so far as is reasonably practicable”. Examples of strict liability would include injury caused by defective equipment where the employer controls the selection, purchase, installation and maintenance of equipment, where investigation can be very difficult and with the employer holding all the cards.

The commentary in the Government’s own impact assessment is that the number of compensation cases which rely on a breach of strict liability statutory duties will be small and despite their position, the Government have declined to undertake the review that Professor Löfstedt recommended to potentially restrict the number of situations in which strict liability is relevant. They now argue that it would be too complex a task and would anyway have largely been done when consideration of the transposition of EU directives was considered. Rather than doing the work, they use the issue as an excuse to change the liability regime across the board, potentially to the disadvantage of tens of thousands of employees each year, who will find access to justice more difficult and expensive. For some, it will be denied altogether.

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[Viscount Younger of Leckie]

All I am saying at this stage is that we are open to ideas so we can hear where further exclusions, above and beyond pregnant workers, might appear.

[Lord McKenzie of Luton]

My Lords, I am bound to say that I found the Minister’s response profoundly disappointing. It was his noble friend Lord Razzall who said that it was a mistake to introduce laws without extensive consultation and who urged the Minister to find a balance. Indeed, the same point was made by the noble Lord, Lord Phillips. Yet I do not see any balance in the Minister’s response.

With this power to make exceptions, the Minister is asking us to do the job of the Government. Frankly, that is not the way round that it should be. The Minister always goes back to focusing on strict liability and extrapolates what is perceived to be the issue around that to all other circumstances where people might be injured at work, then causes there to be a restriction on their ability to get justice.

There seems to be an incredible disconnect between an analysis of the health and safety system and the extent to which there is overcompliance with it, with the solution being to restrict the right of people to claim justice when they are injured at work. For a long time there has been a problem of overcompliance, and now there is undercompliance with the health and safety system as well. That is why, as I know, the HSE is engaged in improving guidance, not helped by the Government having restricted proactive inspections so that inspectors can no longer go out and visit as many premises as they did in the past. There is a huge disconnect there, which does not seem to have any justification.

We have had a very impressive array of contributions to this debate today, from very experienced legal minds, all of whom, with the exception of the noble Earl, Lord Erroll, argued in one direction. I would say to the noble Earl, who mentioned agriculture, that this industry is proportionately the most dangerous in the country. There are more fatalities in agriculture than in any other industry. It is absolutely right that there should be a concentration of health and safety regulations in those circumstances.

[The Earl of Erroll]

I am not arguing that one should not have health and safety regulations and that one should not do one’s best. However, it is just wrong when someone has done everything they can but something is done behind their back that they have no knowledge of or power over and they are made liable and possibly locked up. I object to the strict liability part.

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[Lord McKenzie of Luton]

The noble Earl, like the Minister, has effectively conflated issues around strict liability with the overwhelming number of regulations where it is “so far as reasonably practical” that applies. The noble and learned Lord, Lord Hardie, went through this in some detail. My noble friend Lady Turner was very clear that this clause had to go in its entirety, and on the basis of what we have heard today that is absolutely the right way forward. The noble Lord, Lord Wigley, said that this clause was turning back the clock to Victorian times, and the noble and learned Lord, Lord Hardie, corrected me to say that it is not just a century that it goes back, but further than that. It has been a settled position and the Government seek to unsettle it, all because of perceptions.

We know that the data show that there is not a compensation culture. There has not been an increase in the number of claims for compensation. The Government’s own statistics show that, and their own impact assessment shows that there are a small number of cases that proceed via the strict liability route, as opposed to the generality that go down an alternative route. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, asked, “Which are the undeserving claims at the moment? Which sort of claims proceed at present that will be restricted by the Government’s change, and why is that?” We heard no answer from the Government.

The noble Lord, Lord Pannick, said that the change in the process to prove negligence would be expensive and bring uncertainty and delays to the process—a point reiterated by my noble friend Lord Browne. We heard a very powerful treatise from the noble and learned Lord, Lord Hardie, about why it would be wrong to disturb the current positions, and I entirely agree with that.

Basing these things on perception seems a very flimsy structure on which to make such a fundamental change to the law. We have a number of propositions before us. I believe that the first and the third amendments in the group have the same effect, which is to delete the clause, and I certainly wish to test the opinion of the House on that proposition.