Small retailers could find themselves out of pocket defending accident claims, even when they are found not to be at fault, says commercial property agent Prop-Search. The warning comes as new laws come into effect limiting the cost of legal aid.
The situation has arisen due to legislation included in the Legal Aid, Sentencing and Punishing of Offenders Act 2012 (LASPO). Under the terms of the act, legal costs are no longer recoverable by a company found ‘not guilty’ except in cases where the defendant is an individual. Even in these circumstances, recovery can be difficult and costs will now be capped at legal aid rates.
The legislation was drafted by former Justice Minister Ken Clarke to tackle the spiraling costs of legal aid and it is feared this could add to the financial burden of claims small retailers face from the public for minor slips and falls. The number of claims has risen due to ‘no-win, no-fee’ companies encouraging individuals to allow them to act on their behalf in pursuit of compensation.
Now it is the retailers themselves who are in a no-win situation according to Samantha Jones, a Surveyor at Prop-Search: “For an acquitted corporate body that cannot make a claim for legal costs under a defence cost order, they may recover costs through a wasted costs order, where the court is satisfied that it is justified. As a result, it is believed that many businesses will not even bother to contest cases brought against them, even if they are not at fault.”
Prop-Search advises retailers to seek the latest advice on the impact it could have on their business. And to ensure slips and trips are minimised by ensuring that they implement an effective cleaning regime, maintain cleaning equipment, ensure spillages are dealt with promptly, use wet floor signs, highlight areas of damaged floors and avoid creating trip hazards.
Retailers should also be aware that the Health & Safety Executive (HSE) has implemented further new legislation – the ‘Fee For Intervention’ cost recovery scheme. For the first time this will allow the HSE to charge businesses for the time they spend investigating a material breach of health and safety obligations.
Businesses that breach health and safety laws will be liable for the HSE’s related costs, including inspection, investigation and taking enforcement action. The hourly rate is set at £124 for an HSE inspector’s time investigating a material breach.
At low-risk workplaces, shops are usually under the control of local authority health and safety inspectors, who at present do not charge for investigation time. However, retailers who have haulage, distribution or warehousing operations are likely to be inspected by the HSE, so could end up receiving an invoice for material breach of health and safety requirements.
Samantha adds: “Retailers should also be aware that there is the possibility that the new charging scheme could be extended to local authority health and safety officers in the future.”
Prop-Search believes there is a risk of inconsistency regarding how a material breach will be defined and interpreted by different HSE inspectors. According to the guidelines, a material breach is defined as a contravention of health and safety law that requires an inspector to issue a written notice to duty holders. Those who do receive an invoice from the HSE will need to carefully consider what appeal options may be available and seek advice on how to proceed.
