UK: Is There A "Compensation Culture"?

Last Updated: 21 July 2011
Article by Vanessa Hempstead

What does the future hold after Lord Young's review?

Vanessa Hempstead, a solicitor in Thomas Eggar's London employment team, recently spoke at a Westminster Briefing event on the future of health and safety after Lord Young's review. David Cameron had asked Lord Young to undertake a review of the operation of health and safety laws and the growth of the "compensation culture". Lord Young published his review, "Common Sense, Common Safety" on 15 October 2010. Lord Young attended the Westminster Briefing event and gave his views on whether there was a "compensation culture" in England and what he saw as the key areas which needed to be addressed.

Is there a "compensation culture"?

There certainly are concerns amongst businesses that the continued increase in health and safety rules has resulted in more bureaucracy and less common sense. There is also the problem of the current attitude to health and safety laws.

The current view of some employers is that businesses suffer from excessive form filling and the misconception that they may be sued for even minor accidents.

Having said that, it is clear that employees are now more willing to take legal action against their employers. With the introduction of conditional fee arrangements and frequent advertising of "no win no fee", employees are seemingly encouraged to bring claims with the mentality that they have nothing to lose.

Lord Young stated that in his view the key was to "remove the climate of fear" amongst businesses. In his review, he concluded that the problem of the "compensation culture" prevalent in the society today is, however, one of perception rather than reality. Furthermore, he is of the view that advertising is one of the key factors in driving a fear of litigation. Lord Young hopes his review will reintroduce "common sense" and refocus legislation where it is most needed.

There is the view among some organisations that the problem is with the application of the legislation, not the legislation itself. Certainly there needs to be a balance between the risk of accidents and the cost to businesses of precautions. Maybe, the issue of getting health and safety right is one that needs to be solved through education rather than more legislation. After all, the Health and Safety at Work Act 1974 states that employers are responsible for ensuring health and safety so far as reasonably practicable – perhaps, therefore there needs to be clearer understanding as to what that actually means.

For example, does it mean extensive efforts should be made to remove all risks which is how some employers have interpreted legislation in the past or alternatively, in contrast does it mean than just the bare minimum effort is needed to look after health and safety of others? In Lord Young's report he states that it should not be the case that legislation attempts to achieve the elimination of all risk.

Lord Young's recommendations and legislation

Of particular importance to employers is that some key recommendations of Lord Young's report included consolidating current health and safety regulations into a single set of accessible regulations and producing clear, practical guidance focussed on small and medium-sized businesses engaged in lower risk activities.

Specifically, Lord Young recommends that the risk assessment procedure for low hazard workplaces such as shops, offices and classrooms is simplified. At the Westminster Briefing event, Lord Young spoke about how the current legislation asks too much of businesses, for example, risk assessments.

Lord Young has asked the Health and Safety Executive ("the HSE") to create downloadable risk assessments for low hazard workplaces and make them available on its website. The thought behind this is that the simple act of filling in the risk assessment form will make businesses consider all relevant aspects of health and safety. Lord Young also recommends that employers are exempted for the need to carry out risk assessments for those employees working from home in a low hazard environment. The aim is that risk assessments become proportionate to the risks posed by their work activities.

It should be noted that Lord Young only considered low-hazardous industries in his review. Lord Young has commented that hazardous industries also need to be looked at and more legislation may in fact be required for those industries.


The other interesting discussion at the Westminster Briefing concerned the HSE Chair's speech where she discussed the future of health and safety from the HSE's perspective.

The HSE has already launched the first of their simple to use online risk assessments for offices and they are now in the process of developing similar tools for use in classrooms and shops. The HSE has also been working to assist with the development of the Occupational Safety Consultants register. This register is for businesses to consult with so that they can have the confidence that the health and safety consultant they engage from the register has complied with the qualification and competence standards of a recognised professional body. The aim is to launch this register in January 2011.

The Chair of the HSE also spoke about the potential impact of the government's spending review on the HSE. The HSE is required to make a minimum of 35% savings in its dependence on public funding over four years. One of the proposals the HSE is considering to assist with making this saving is to charge those businesses that create risks with a so-called "fee for fault" principle. The idea being that those who are found not to be compliant with the law during an inspection should be charged for the work that HSE does following the issuing of a notice or other requirement for action to rectify the fault.

The HSE currently provides non statutory advice to businesses. The HSE is also considering where and how they might charge businesses that use them for advice and consultation on health and safety systems.

The outlook for the future?

It is clear that there is currently a large amount of change proposed for the world of health and safety. It is hoped that there will also be a change in the culture surrounding health and safety and it will be interesting to see whether Lord Young's recommendations do result in a change in the current perception of the "compensation culture".

The contents of this brochure are intended as guidelines for clients and other readers. It is not a substitute for considered advice on specific issues. Consequently, we cannot accept any responsibility for this information or for any errors or omissions.

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