The enactment of the Human Rights Act (HRA) into English law last week has led to dire predictions about the potential cost of litigation to business.

John Taylor, the legal director at human resources consultancy First People, warns: "There is no doubt there will be a surge in litigation, partly because some people have been hanging on, partly because there will be some collective actions - but also partly because if you're a gambling man, you might want to take a gamble on the Human Rights Act."

"We no longer have the faintest idea which way the courts will go," he added.

But according to Ruth Lea, the head of the Institute of Directors' policy unit, the UK's compensation culture is already damaging businesses' competitiveness and tying them up in legal red tape.

"We fear that the HRA, an unnecessary piece of legislation if ever there was one, will give another major stimulus to the compensation culture," said Lea. "It looks like bad news for business."

David Knight, a partner at Lochners Technical Solicitors, thinks the Act will be used to buttress complaints, and force companies and employers to settle out of court to avoid bad PR. "Vexatious litigants will have a go using it and might get some result. It's more embarrassing for a company potentially to have abused your human rights than to have a dispute with you in contract law," he claimed.

And there's also a warning from the US, where Richard Lynn, vice president and general counsel at Arizona-based human resources consultancy the Labor Relations Institute, has been consulting UK legal experts over the implications of the HRA for his clients with UK-based subsidiaries.

"We have a multitude of laws in the US on this issue, and yours are starting to catch up," he says, describing the trend as "depressing". And such legislation inevitably generates costs for business, he adds, "for no other reason than it's a burden on staffing. Companies we deal with now have individuals whose responsibility is nothing else but implementing these laws".

Counting the cost
Yet the implications of the Act are currently vague enough for no one to really know how big this financial burden could be. In this context, an advice booklet on the HRA from public service union Unison will not reassure doom-mongers.

"Phone-tapping, video surveillance, dress codes and changes to shift patterns can be challenged," it states. "There may also be a possible challenge under Article 8 for working hours which prevent an employee from having a family life - for example, changes in hours of work, extension of working hours or Sunday working."

But those who believe the Act may lead to a generation of dotcoms working nine-to-five, trade shows where the man in the chicken suit decides to wear jeans instead, or projects where the contractors sue claiming that overtime equals oppression, are ignoring the available evidence - evidence of how it is working in Scotland.

While the Act is hitting the latest UK news headlines, Scottish Law has been working under its auspices for a year. In that time, only 16 of 600 cases brought under the Act have succeeded. And those successes have not included a single case based on dress code regulations, for example.

"It's a watershed, but not a cataclysm," says Taylor. "Senior judges are telling lawyers not to pursue frivolous claims, and there are a very narrow range of circumstances in which you can use it."

This means that the HRA's effect may be more symbolic than financial. Many of the principles of the Act - for example, the right not to be tortured or the right not to suffer discrimination on the basis of sex or sexuality - already exist, or will soon exist, in English law.

And if you are not employed by the state, you cannot use the Act directly to make a claim against your employer - it only applies to public sector organisations, or those that are partly funded by public sector money. So most people will only experience the Act in as much as employment tribunals and courts will have to bear it in mind when reaching a judgment.

Email at work
But there is one important area in which the HRA has concentrated minds: that is, the monitoring and interception of employees' emails. Article 8 prevents the interception of such emails and telephone calls, but this presents a challenge to the much-abused Regulation of Investigatory Powers Act (RIP). The Act enables businesses to monitor communications to determine whether they are being used in an unauthorised way.

"The RIP regulations drive a coach and horses through the concept of privacy. Currently it's up to the employer to specify what is unauthorised use," explains Taylor, "The HRA could be used to challenge this - for example, simply saying 'No private calls' could be in breach."

Although the practical implications of implementing the RIP Act are still being decided, no one knows for certain whether employment contracts will need to be redrafted to permit monitoring, or even whether such contracts would be binding in law.

This is frustrating for Jonathan Hobday, managing director of netsiren, which sells software to enable 80 publicity-shy UK companies to monitor staff emails. Another 400 are evaluating the product.

"I don't know if I have a problem," Hobday says. "The concept is good, but there's no support for companies. My major gripe is how can a government introduce such an Act without offering guidelines for how to comply with it. We have to wait until someone is brave enough to launch a test case."

Meanwhile, Hobday claims that netsiren's existing users will continue to check up on their staff until told they have to do otherwise by the courts.

"It's surprising, but they are saying, 'We take risks in business every day. This is another risk. We want to monitor our staff'. Ten per cent of my customers have a problem with the implications of the HRA, six or seven consider it will be a serious issue. But for god's sake put some money behind it and educate companies," he says.

But no matter when the terms of the Act are clarified, employers are already learning some uncomfortable truths about what it may mean to give staff the right to send confidential emails.

In the US, a survey by Information Security shows that, over the last 12 months, 63 per cent of companies found their employees were using email for illicit or illegal activities, while almost one quarter suffered electronic theft, destruction or disclosure of data at the hands of their own staff.

For Hobday's users, clarity cannot come soon enough.

The articles that may one day affect your working conditions:

Article 4: Prohibition of slavery and forced labour

What hours is it reasonable to ask you to work?

Article 8: Right to respect for private and family life

Can you use email and the phone for private communication? Can you use conditions at home to request a change in working conditions?

Article 9: Religion and beliefs

Can you request extra holiday for religious festivals? Can you refuse to work on specific projects?

Article 11: Freedom of assembly and association

Can you join a union?

Article 14: The prohibition on discrimination

Can an employer discriminate against you because you are a woman, you are black or gay?