The Sentencing Council’s guidelines for health and safety offences, probably the most significant change in Health & Safety Law for 40 years, came into effect on 1 February 2016. The new guidelines, if followed correctly, will dramatically increase fines for companies as well as lowering the threshold for custodial sentences for individuals. Emphasis is placed on the risk or likelihood of harm with fines intended to have a “real economic impact”. Whether “the fine will have the effect of putting the offender out of business will be relevant” and “in some serious cases this may be an acceptable consequence”.
During the final week of January 2016 four UK companies were fined £1,000,000 or more as a result of convictions for offences under the Health and Safety at Work etc. Act 1974. Although the cases all concluded before the introduction of the new guidelines, it is clear the Courts took them into account during sentencing.
One of the four cases involved construction and engineering giant Balfour Beatty plc and their subsidiary Balfour Beatty Civil Engineering Ltd. They were fined £1 million by Canterbury Crown Court after pleading guilty to breaches of section 2(1) and 3(1) of the Health & Safety at Work etc. Act. 1974. The prosecution followed an incident in October 2012 when a worker was hit and killed by a lorry mounted crane whilst undertaking repairs to a damaged central reservation.
Organisations will be required to submit detailed financial information including turnover figures, pre-tax profit, director remuneration, pension provision, assets and debt exposure for the past three years (including where appropriate that of any associated organisation, which may lead to an examination of any group structure).
Failure to produce required financial information, or the production of insufficient or unreliable financial information is likely to be viewed as an aggravating feature. The court will form its own conclusions from the circumstances and information available, including whether the offender is able to pay any fine.
Organisations facing substantial fines for such offences may also have to report such matters in their annual accounts and website with inevitable reputational damage as a consequence.
Directors and senior managers face the prospect of an unlimited fine or a custodial sentence if they are found guilty of the consent, connivance or neglect in the commission of the offence by the company. The thresholds for custodial sentences for individuals suggest a far greater likelihood of imprisonment for the most serious breaches.
Corporate manslaughter convictions require a number of evidential hurdles to be satisfied to secure a conviction. In contrast health and safety offences are much easier to prosecute and a prosecutor may consider taking that route if they feel a real impact can be achieved.
A proactive, coordinated and fully supported approach to health and safety is crucial. The guidelines make it clear that persistent offenders or those who adopt a laissez-faire approach to health and safety will face harsher fines, while single offenders with an otherwise exemplary record with an enthusiastic, forward thinking and structured approach to compliance which is fully endorsed from the top down, are likely to be dealt with in a more lenient manner, although the fine must still be large enough to be a punishment and deterrent.
The Sentencing Council have sent a clear and unequivocal message – regulatory authorities expect health and safety to remain a key corporate priority. Directors must ensure that it is at the top of their agenda.
“The Health & Safety at Works etc Act 1974 gave us a law to incarcerate only the very negligent of employers, whilst balancing the fine against profits, but these new guidelines have afforded a much more flexible system that not only hits the negligent employer in his pocket but also tarnishes his reputation to equal effect. In my opinion this is a huge step forward in protecting the workforce and partly has been put in place to balance the loss of workplace enforcement officers” Stephen Smith, Managing Director of Sphere Risk Health & Safety Management Ltd