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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.

 

ORGANISATIONS – HEALTH & SAFETY BREACH FINES

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

  • CULPABILITY
    • 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
  • COMPANY SIZE
    • The financial standing (in terms of Annual Turnover or equivalent) of the offending company
  • REVIEW
    • 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.

 

INDIVIDUALS – HEALTH & SAFETY BREACH FINES

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.

 

CORPORATE MANSLAUGHTER

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.