Time to sharpen up your approach to health & safety

The ‘Sentencing Guidelines’ introduced in England and Wales in 2016 saw a significant rise in the size of fines being handed down by the courts in health and safety cases. In 2016, nineteen companies received fines of a million pounds or more, compared to only three in 2015 and none at all in 2014. Further to the increase in financial penalties 46 company directors and senior managers were prosecuted under health and safety laws in 2016 and prison sentences are becoming increasingly likely. Businesses operating north of the border should recognise that the Scottish courts are likely to follow the English and Welsh Sentencing Guidelines.

The Guidelines have made it more important than ever for your business to proactively manage their health and safety provisions which should include your Health and Safety Policy, risk assessments, safe systems of work and staff training. If your health and safety documents are hiding in a dusty folder on the shelf which, for example, only gets opened every six months to record the details of the fire drill then they would definitely benefit from a thorough review. Not only should they be up to date and accurately reflect your business activities but they should also have been communicated throughout your business and be understood by all your employees.

The reasons for having practical, effective, specific and up to date health and safety documentation are compelling but what about aspects beyond the ‘paperwork’ – the human element?

A safety culture (good or bad) within a business can be determined by what its employees actually do rather than what they say and this applies from the boardroom to the shop floor. Attitudes and behaviours demonstrated by all employees are a good barometer of the health and safety culture within a business.

‘Safety culture’ is a frequently used term, but what does it actually mean and how do you measure it?

A safety culture cannot be bought off the shelf as a package; it takes determined commitment and involvement, an understanding of the required outcomes and how these will be achieved and genuine desire for it to succeed.

While the sentencing Guidelines do not impose any further burden upon business the consequences of a successful prosecution now even further outweigh the costs of taking the time and effort in implementing and maintaining a robust health and safety management system.

If you would like to discuss a review of your health and safety management systems or to learn more about the benefits of introducing and sustaining a positive health culture please contact the TL Dallas Risk Management team by emailing riskmanagement@tldallas.com.

Health & Safety – Early Plea Discounts: new guidance on sentencing

On 7th March 2017, the Sentencing Council for England and Wales published new guidance on sentencing offenders who plead guilty.

The new guidelines came into force on 1 June 2017 and can be accessed here.

In England and Wales, in accordance with s.144 of the Criminal Justice Act 2003, in determining what sentence to pass on an offender who has pled guilty to an offence, a court must take into account the stage in the proceedings for the offence at which the offender indicated his intention to plead guilty and the circumstances in which this indication was given.

There is an almost identical provision to be found at s.196 of the Criminal Procedure (Scotland) Act 1995 in relation to Scottish proceedings.

The rationale for allowing “sentence discounting” is that early guilty pleas save court time, avoid witness distress and ultimately benefit the public purse.

Sentence discounting is not a new concept. It is rooted in statute, but its application by the courts both north and south of the border has raised issues in relation to what the court should take into consideration when dealing with an offender who pleads guilty and what discount should apply.

The purpose of the new guideline, which is applicable to England and Wales only, is to encourage early guilty pleas by making clear the stages in proceedings at which an offender can receive the various levels of discount available. It sets out that the maximum sentence discount of one-third is available only if the offender pleads guilty at the first court hearing. Offenders who tender guilty pleas after the first hearing are entitled to maximum sentence discount of one-quarter which will reduce on a sliding scale to a maximum of one-tenth if tendered on the first day of trial.

There are however some noted exceptions which include circumstances where it would be unreasonable to expect the offender to indicate a guilty plea sooner than was done. In such circumstances the maximum discount of one-third may still be applied, even if the offender did not plead guilty at the first opportunity. This may cover situations where further information, evidence, assistance or advice was required before a plea could be indicated. It is thought that this may cover more complicated criminal regulatory cases, including prosecutions under the Health & Safety at Work etc. Act 1974.

This is a welcome clarification of the law on sentence discounting in England and Wales and it will be interesting to see how this is applied. North of the border, the Scottish Sentencing Council is still working on drafting sentencing guidelines. Sheriffs frequently apply an early plea discount already but this is with much more discretion and flexibility.

Clearly, early legal advice in any near miss or incident is very important in order to mitigate the impact of any sentence.

If you have any questions, comments or concerns please get in touch with Malcolm Mackay, Partner, Brodies – malcolm.mackay@brodies.com or call 01224 392 274.

A Change to the Ogden Discount Rate: How to Mitigate the Premium Increases Ahead

In February 2017, the Lord Chancellor announced a significant reduction to the Ogden Discount Rate of 2.5%, to the revised level of -0.75%, causing UK insurer shares’ to plummet and sparking reaction from the insurance industry – who was expecting the rate to fall to around 1.5%.


So, what is the Ogden discount rate?

  • It is a calculation used by the courts to determine how much insurance companies should pay out to customers in cases of life-changing injury
  • When victims of life-changing injuries accept lump sum compensation payments, the actual amount they receive is adjusted according to the interest they can expect to earn by investing it
  • The Discount Rate is linked, by law, to returns on the lowest risk investments – typically index-linked gilts. The yield on these gilts, or Government bonds, has fallen dramatically since 2001


The reduction means that those suffering from serious injuries will receive significantly higher compensation payments than before. Mike Mitchell, Group Broking Manager at TL Dallas observes, “this change has caused insurers to revisit their reserves for existing claims to ensure they have sufficient funding set aside to meet future liabilities; Aviva has announced that this change has increased its Combined Operating Ratio from 94.9% to 106.3%, QBE has announced that it is setting aside an additional $160m in reserves.”

The effects of this will be that insurance that covers bodily injury – principally Motor, Employers’ Liability  and Public Liability – will need to be re-priced to ensure the premiums generate adequate funds. Furthermore, some insurers may well choose not to underwrite these classes of business, so there may also be a contraction in the market supply. The net effect is that premiums will inevitably go up and insurers will become more selective.

Gary Foggo, Health & Safety Consultant at TL Dallas, commented, “now is the time for companies to proactively review their risk management procedures, as well as risk transfer solutions and claims defensibility.”

To combat price increases, businesses will need to demonstrate and evidence how well they manage their risks to ensure they are ‘top of the underwriter’s pile’ come renewal. Firms with resilient and demonstrable health and safety procedures (which drive attitude, behaviours and culture) will be in a stronger position to lessen the knock-on effects.

The first step to controlling risk in the workplace is hazard identification. Thereafter, it is down to control measure implementation and the effective documentation of both. He adds, “it is impossible to eliminate all risks and prevent every accident, but when an accident does occur it is vital a company has the resources available to minimise the effect; that processes are robust; and that documentation is available to defend the claims.”

As part of the process of risk management, businesses should also be considering risk transfer: working with their broker to explore whether their limits of cover and sums insured remain adequate, given the potential change in exposure as the revised Ogden Discount Rate takes effect.

What should you do?

Speak to your broking team. Companies should get support from a qualified risk management professional who will work with you and your broker to review your internal processes and advise on a relevant approach to ensure a safe workplace and proactively manage claims when they do occur.

If you would like to discuss this matter further, please contact our Health & Safety Consultant, Gary Foggo – gary.foggo@tldallas.com or call 0131 322 2641.

Duty to Warn

Duty to Warn describes the obligation of an experienced construction professional to warn others of defects in works – even if the professional isn’t directly responsible for that aspect of the works.

There are a number of well known cases demonstrating the courts attitude to Duty to Warn and demonstrating the cost to construction professionals who either ignored, or were oblivious to the risk.

How can a Duty to Warn be created?

There is no general duty to warn in English and Scottish law however, there are circumstances in which a duty can exist.

In it’s judgement on the case of Plant Construction Plc vs Clive Adams Assoc., the Appeal Court offered the following conclusions:

  • There will usually be an implied (sometimes explicit) contractual term that a contractor shall perform a contract using the skill and care of a reasonably competent contractor
  • The circumstances of a particular contract will establish the scope of that obligation
  • Where an experienced contractor is involved and the design of the works is not only defective, but obviously dangerous there is an “overwhelming case” that the contractor is bound, as part of its obligation, to use appropriate skill and care to warn a client of dangers it perceives 

The court left open the question of circumstances where the defective was not obviously dangerous.

Other considerations could include:

  • Contracts will often place a higher obligation on the contractor than reasonable skill and care, even so, there is an exposure through both the Tort of Negligence and the implied term in the Supply of Goods and Services Act 1982.
  • The more experienced, skilled or specialist the contractor/construction professional is, the higher the obligation may be considered to be.
  • Contractual requirements to inspect, monitor, supervise, etc. create a contractual requirement of, not only a Duty to Warn, but to oversee the rectification/remedy of the defect.
  • New Engineering Contracts (NEC) require both parties to give early warning of anything which may delay the works or increase costs. If the contractor fails to comply with this obligation they will be unable to claim for additional costs/delays following any subsequent compensation event.
  • The Construction (Design and Management) Regulations 2015 require that the principal designer ensures the works are carried out in a way that minimises Health & Safety risks.
  • The Health & Safety at Work Act 1974 creates obligations to warn both employees and third parties about the dangers present in a place of work.

What should you do?

  • Understand your exposure to Duty to Warn, through the mechanisms listed.
  • Educate your staff to reinforce their understanding of their responsibilities, and create a simple process for them to raise concerns promptly with senior management and in turn other contractors and employers.
  • As a minimum, warn of all dangerous or potentially dangerous defects.
  • Make sure that your company’s warnings to clients or other contractors are clear, unambiguous 
and in writing. If your warning isn’t strong enough the courts may still consider you failed in 
your duty!
  • Check that your insurance broker understands Duty to Warn and your potential exposure to 
  • Always seek to buy Professional Indemnity Insurance with a specific Duty to Warn extension.

For further details and advice please contact our construction specialist, Mike Mitchell – mike.mitchell@tldallas.com or call 07496 888411.


Alistair Dean, Partner, Anderson Strathern, comments,

‘The concept of a duty to warn is an important one, but in some respects an undeveloped area of the law. The cases, which mainly come from the English courts, demonstrate that it is not easy to succeed in actions which allege that construction professionals breached their duty to warn. There are two legal consequences of failing to discharge a duty to warn. One is in the possibility of a professional indemnity claim. The other is the possibility of a health and safety prosecution under the Health and Safety at Work Act 1974. The ‘rules of the game’ are the same in either case, and I would suggest that the underlying rationale is the application of common sense, and an abundance of caution. If a construction professional, during the course of an inspection/site-visit, is concerned that the works are being carried out in such a way that there is a health and safety risk, that should be immediately flagged up to all of the relevant parties. However, as is demonstrated by the case of Goldswain -v- Beltec Ltd in 2015, a structural engineer (and by extension any designer) is entitled to assume that their drawings will be followed by the appointed contractor, and there is no obligation to supervise the works to ensure such compliance.’




Health & Safety breaches – the true cost


We take a look at the Sentencing Council’s revised Definitive Guideline to Health & Safety Breaches and increased fine levels.

Safety professionals have for some time spoken of the hidden (and uninsured) costs of accidents at work, but recent changes in the Sentencing Council’s Definitive Guidelines for Health & Safety Breaches (effective from 1st February 2016) are already resulting in huge increases in the levels of punishments (a very visible and direct cost) being handed out by the courts.

Fine in cases after February 2016 can be ten times larger than before.



In the new Guidelines, fines are calculated through a number of considered stages:

    • Very High – deliberate breach or disregard to the law
    • High –Serious or systemic failure within an organisation to address risks to Health & Safety, typically characterised by ignoring concerns of employees or others, failing to implement changes following other incidents, or allowing breaches to subsist over a long period of time
    • Medium – Systems were in place, but these were not sufficiently adhered to or implemented
    • Low – Failings were minor and occurred as an isolated incident
  • HARM
    • The level of harm or potential harm that an offence creates
    • How many people (employees and members of the public were exposed)
    • Whether the offence was a significant cause of actual harm
    • The financial standing (in terms of Annual Turnover or equivalent) of the offending company
    • Adjustment based on how proportionate the fine is, taking into account profitability of the company, savings they made through taking safety shortcuts, risk of the business closing as a result of paying the fine
    • Consideration of ancillary orders (remediation of specified failings, compensation etc)
    • To illustrate, take an example of a company with a £12M Turnover, deemed to have ‘Medium’ culpability in an employees death (or even a ‘near-miss’ that could have resulted in death) would now be looking at a fine in the range £300,000 to £1,300,000 before the review/adjustment stage. 
    • If the same company was deemed to have High Culpability, that range increases to £600,000-£2,500,000.
    • If you compare these figures with a 2014 case against the significantly larger Thames Water for a workers death, which resulted in them paying £361,000 in fines and costs, you can see the revised Guidelines will result in hugely increased fines being paid.



The revised Sentencing Council’s Definitive Guidelines also address the penalties against individuals for Health & Safety breaches.

‘Individuals – Go directly to Jail – Do not pass GO, do not collect £200!’

Culpability and Harm are judged in the same way as the company fine, but the individual would also have to make a declaration of their finances.

Using the example given above, for Medium Culpability the penalties faced by the individual are described as “Band F fine or high level community order – 1 years custody”.  Note that the starting point is set at 6 months imprisonment and a Band F fine means 500% to 700% of the individuals weekly income.



Utilising a two level view of Culpability and Harm (High and Low), the Corporate Manslaughter sentencing also uses the same company size categories as is applied to offending company fines for Health & Safety breaches.

There is still an adjustment/review process, but continuing the example of a death at a company with a £12M Turnover, a High Category offence would result in a fine in the range £1.8M to £7.5M, with a starting point of £3M.

There is much debate amongst Safety professionals about the overall impacts of the new Sentencing Council’s Definitive Guidelines, but one thing is clear, if there is any weakness in your Health & Safety regime (whether injury results or not) the financial price for getting it wrong is increasingly severe.


The Sentencing Council’s Definitive Guide can be found here, but for further details and advice, please contact your nearest TL Dallas branch.

Can Your Insurers Cope With The Heat?

If you use heat in your work, do you understand what your insurance requires you to do?

If you don’t and you breach the conditions, then you effectively have no cover.

The idea seems reasonable, but what are the conditions you need to comply with, and are they reasonable in the first place?

  • Do they require you to connect to a hydrant? How could you do that without advanced permission from the authorities to use the hydrant?
  • Do they require you to have a set number and size of extinguishers, within a set distance from the work?
  • Do they need to have the property owner/occupier (or their representative) present throughout the application of heat?
  • After completing the heat work, do you have to check the area at intervals? 30 minutes, 60 minutes, 90 minutes or all three. Do they have to keep a written record of those checks?

Most critically, does the warranty apply to your direct employees, or anyone (including sub-contractors) working on your behalf?

Most critically, does the warranty apply to your direct employees, or anyone (including sub-contractors) working on your behalf?

  • If the conditions apply to anyone working on your behalf, can and do your sub-contractors comply with your heat conditions
  • If they do comply with your policy heat conditions, is the sub-contractor also complying with their own policy conditions?
  • If not, then there was no point checking that the sub-contractors have insurance – it won’t respond to a claim against them anyway – leaving you financially exposed.

The solutions are relatively simple, but the first thing you need is a broker who has thought about the problem.

To discuss solutions or any other Construction insurance issues please contact Mike Mitchell by email, mike.mitchell@tldallas.com or call 07496 888411.

Personal Injury Claims Reforms – April 2013 (delayed until July 2013)

Back in January 2012, the Government announced that the current Road Traffic Accident (RTA) portal scheme for low value claims up to £10,000 would be extended to Employers’ Liability (EL), Public Liability (PL) and motor claims with a value up to £25,000.

This briefing highlights the key provisions of the amended RTA Protocol and the new EL/PL Protocol. Further details will follow once the protocol is finalised.

RTA Protocol changes

The value of claims which will be dealt with under the scheme will increase from £10,000 to £25,000 with effect from the end of July 2013.

The level of fixed costs payable under the scheme is currently being consulted on, however are proposed to be reduced to: –

£500 for claims between £1,000 and £10,000 that settle without a hearing
£800 for claims between £10,000 and £25,000 that settle without a hearing
The timescales for admitting liability will remain at 15 working days

EL/PL Protocol

This will apply to an EL or PL accident or an EL disease claim where there is only a single defendant and where the value of the claim is up to £25,000. This comes into effect from the end of July 2013.

The Claimant will have to try to identify the Insurer and a Claims Notification Form (CNF) will be sent to that Insurer. If the Insurer cannot be identified then the CNF will be sent to the Defendant.

The Insurer or Defendant must send an electronic acknowledgement of the CNF the day after receipt.

There is then a period of only 30 working days for EL and 40 working days for PL, from the date of service of the CNF, for liability to be investigated.

For an admission of liability to be valid under the scheme it has to be a full admission i.e., without allegations of contributory negligence. If a full admission is not made then the claim falls outside the scheme

In EL claims details of the Claimant’s earnings must be provided 20 days after the admission of liability.

Damages will be increased by 10% to reflect the fact that success fees will no longer be recoverable

The level of fixed costs payable under the scheme is currently being consulted on, however are proposed to be reduced to: –

  • £900 for claims between £1,000 and £10,000 that settle without a hearing.
  • £1,600 for claims between £10,000 and £25,000 that settle without a hearing.

It is obviously going to be economically beneficial for claims to be handled within the scheme wherever possible, however if the claim does fall out of the scheme a separate matrix of costs is being consulted upon which includes a contingency element based upon a percentage of the Claimant’s Damages.

An unsuccessful Claimant will no longer have to pay the successful Defendant’s costs (known as Qualified One-way Costs Shifting or QOCS) unless the claim is proved to be fraudulent.

For further information and details please refer to your usual contact at TL Dallas or call us on 01274 465500.