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New U.K. law eases worker liability standard in comp cases

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New U.K. law eases worker liability standard in comp cases

Under a recently approved U.K. law, employees will have to prove employer negligence to win a workplace injury claim in the United Kingdom, and employers will have more options when dealing with underperforming workers.

The U.K. Parliament late last month gave final approval to the Enterprise and Regulatory Reform Act, which also received the formality known as “royal assent.”

Most of the law likely will be enacted this year, experts say.

Clause 62 of the new law removes the current “strict liability” standard that makes employers automatically liable for many workplace injuries, regardless of fault, under the current Health and Safety at Work Act, London-based law firm Pinsent Masons L.L.P. said in a briefing note.

Under the new law, employees will have to prove negligence on the part of their employer to pursue a claim, the law firm said.

The House of Lords, the upper chamber of the U.K. Parliament, previously rejected Clause 62's removal of that civil liability. But the U.K. Parliament's elected chamber, the House of Commons, reinstated the clause, and the House of Lords approved the bill April 22 on a 170-112 vote.

“This reform is not about reducing the number of claims made, but about establishing the important principle that employers should always have the opportunity to defend themselves against a compensation claim, when they have done nothing wrong and have taken all reasonable precautions to protect their employees,” said James Younger, parliamentary undersecretary of state at the Department for Business, Innovation and Skills.

“The changes mean that it will only be possible to claim compensation for accidents which would currently constitute a breach of health and safety regulations, where it can be proved by the claimant that the employer has been negligent at common law,” London-based law firm CMS Cameron McKenna L.L.P. said in a statement.

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The London-based Association of Personal Injury Lawyers called the changes “grossly unfair.”

Karl Tonks, president of the association, said the law will make it more difficult for employees to bring workplace injury claims and may stop some from even filing them. The association expects the cases that do proceed under the new law will take more time and be more complex, leading to higher costs for businesses.

Among the changes, the law will grant legal protections to whistle-blowers only if they show that their actions are in the public interest.

Elizabeth Slattery, a partner and head of the employment team at Hogan Lovells International L.L.P. in London, said that move closed a loophole in the current Public Interest Disclosure Act, which enabled employees to argue that they should be protected as whistle-blowers even when their disclosures had no obvious public interest, such as alleging that their employment contract had been breached.

“However, the fact that there is no definition of what is meant by "public interest' is likely to lead to litigation to clarify the point, at least in the short term,” she said.

In addition, the bill will make employers liable for any detrimental treatment that a whistle-blower receives from colleagues unless the employer takes active steps to prevent this, Simon Rice-Birchall, a partner at Eversheds L.L.P. in London, said in a statement.

“It is vitally important, therefore, that employers have a policy in place to protect genuine whistle-blowers and communicate this to the workforce,” he said.

Other changes in the bill are aimed at reducing unfair dismissal claims that are brought to a tribunal, Ms. Slattery said.

Starting in 2014, all claims will have to be referred to the Advisory, Conciliation and Arbitration Service for a one month conciliation period before bringing them to an employment tribunal, she said.

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In addition, the law will make it easier for employers to have settlement discussions with employees in cases where, for example, a worker's performance has not been up to the standard expected. Employees could not refer to such discussions in a subsequent unfair dismissal claim, Ms. Slattery said.

Other changes that will be brought in once the bill is enacted include giving tribunals the power to order employers that are found to have breached employees' rights to pay a penalty of between £100 and £5,000 ($155 and $7,738) on top of any award made to the employee.

That additional penalty would be payable to the government and would apply when there are “aggravating features.”

Though the bill does not define those features, Mr. Rice-Birchall said they may include negligence or malice. He added that it is unlikely that such penalties would be commonplace.