Never Mind The ‘Elf and Safety', It’s the brand, stupid!

What recent parliamentary Act has “the potential to be the most significant piece of legislation for health and safety law in 40 years”?

In an article I recently read by Helen Grimberg of law firm Berrymans Lace Mawer, it’s the recently adopted Enterprise and Regulatory Reform Act 2013.

According to Grimberg, the act “Once implemented, it will allow for the removal of strict liability, in civil claims, for breaches of certain health and saftey regulations”

In terms of what the Act means for businesses, the Department for Business Innovation and Skills (DBIS) claims it will “cut the costs of doing business in Britain, boosting consumer and business confidence and helping the private sector create jobs.”  Various elements of the Act, such as employment tribunals and reducing red tape, are designed to help UK business and support them directly.

Bureaucratic guff?  Actually, I believe the intention is to help businesses by limiting the right to claim for compensation where it can be proved an employer has acted negligently.

This means in future, if a claim is made, the employer will have the opportunity to defend themselves on the basis of having taken reasonable steps to reduce the risk of an accident – or in the words of DBIS “providing this reassurance will help businesses have the confidence to focus on managing health and safety risks in a sensible and proportionate way.”

From a claims perspective it is still too early to say what impact this change might have on the number and the success rate of claims that defendants may face but one consequence is clear: there will likely be more work in claims handling than at present. 

Let’s not become carried away here. I would be surprised if risk management teams in the UK’s business community fundamentally change their approach to health and safety and risk prevention. While breaches of health and safety are a favourite cause of mirth for comedians entertaining crowds on the stand up comedy circuit, they are no laughing matter for CEO’s and FD’s who are obligated to protect their businesses reputations and brands, as well as their employees’ safety.

In today’s world of 24/7 instant online media reporting, a breach of health and safety involving injuries or fatalities could cause irreparable damage to a company’s balance sheet if the incident is reported and goes viral. As the excellent Airmic research document “Roads to Ruin” makes clear, a decisive shortcoming highlighted in the report was “inadequate leadership on ethos and culture”. The report and its follow-up sister document, “Roads to Resilience” also identified blindness to risk to reputation as weaknesses.

In short: preventing accidents at work is not just the right thing to do in terms of saving lives but from a hard headed business point of view it might also just save your business. And that’s no joke.

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