• Lee Calver
  • 18 November 2014

Health and safety fines to increase drastically under tougher guidelines

Under tougher sentencing guidelines proposed last week, large firms convicted of corporate manslaughter will face fines of up to £20m.

According to the Sentencing Council, which for England and Wales promotes greater consistency in sentencing, whilst maintaining the independence of the judiciary, punishments for organisations and individuals found guilty of health and safety as well as food safety and hygiene offences should also be substantially increased.

The Council produces guidelines on sentencing for the judiciary and aims to increase public understanding of sentencing, and the recommendations contained in its latest draft guidance for judges in England and Wales has now been put out for consultation.

In 2013/14 in the UK, 133 people were killed at work and 70 members of the public fatally injured in accidents connected to work, according to the Health and Safety Executive (HSE).

However, to date, there have been only eight convictions for corporate manslaughter in England and Wales since the legislation was introduced in 2007. The largest fine issued thus far was handed down just a few weeks ago when a company was found guilty of corporate manslaughter and fined £500,000 following the death of an employee.

Given the fact that £500,000 is the biggest fine handed out so far, it is evident that the proposals from the Sentencing Council to substantially increase the fines are set to shake things up and ensure that companies start to take health and safety more seriously.

Introducing the guidelines

These guidelines are being introduced due to a lack of comprehensive guidance for sentencers in relation to these offences. While there is a guideline covering corporate manslaughter and fatal health and safety offences, there is no specific guidance on sentencing food safety offences or non-fatal health and safety offences.

Above and beyond that, existing guidance only covers offences committed by organisations rather than individuals. This marks the first time that guidelines will cover all the most commonly sentenced health and safety offences and food safety offences.

The new guidelines are intended to provide greater consistency in sentencing for offences that only occasionally come before judges and magistrates and are therefore not always familiar with how to deal with them.

The need to increase fines

It announced that the review of guidelines is also taking place in part due to concerns that some sentences imposed for these offences have been too low, particularly in relation to large organisations convicted of the most serious health and safety and food safety offences.

The Council revealed that it analysed current sentencing practices and proposed to increase sentence levels in certain situations, which it states will ensure that sentences are proportionate to the seriousness of the offence while, as required by law, taking account of the financial circumstances of the offender.

The guidelines suggest that judges should impose fines in relation to the size of the convicted organisation. For large firms, as already mentioned, this could mean fines of up to £20m for corporate manslaughter, while fines could hit £10m for fatal health and safety offences.

It is proposed that an offending organisation’s means will initially be based on its turnover as this is a clear indicator that can be easily assessed and is less susceptible to manipulation than other accounting methods. However, the guideline also requires the court to consider the organisation’s wider financial circumstances to ensure that fines can be properly and fairly assessed.

As a result, the Council urged that fines should therefore be big enough to have a real economic impact which will bring home to the offending organisation the importance of achieving a safe environment for those affected by its activities.

Implications for business

Looking at how this could affect businesses, Anna Hart, Managing Associate for and on behalf of leading commercial law firm, Bond Dickinson LLP, offered the following expert guidance:

“For each of the offences covered in the proposals, the guidelines provide separate bands of appropriate sentence for different categories of offender, based on their size (which for organisations is measured in terms of turnover) and the offender’s culpability. The guidelines distinguishes between micro (turnover less than £2m per annum), small (£2m - £10m turnover), medium (£10m - £50m turnover), large (over £50m turnover) and very large organisations (turnover greatly exceeds £50m).

“This close reference to turnover is a step closer to proposals which were considered but ultimately abandoned in preparation of the current sentencing guidelines for corporate manslaughter and health and safety offences causing death, but it will undoubtedly mean that the appropriate sentence for many offenders, particularly medium, large and very large organisations will be significantly higher than the current suggested minimum penalties of £500,000 for corporate manslaughter and £100,000 for health and safety offences causing death.

“Indeed, the new guidelines suggest that a medium sized organisation found guilty of a health and safety offence which has caused death or serious life changing or life limiting injuries could expect to receive a fine of between £130,000 and £3.25m, depending on the financial means and level of culpability of the defendant.”

For individuals

Anna Hart also stated:

“In relation to individual offenders, for example self-employed workers found guilty of a health and safety offence, or a Director or Senior Manager found guilty of the “consent, connivance, neglect” offence: the appropriate penalty will be determined on the same principles used to assess fines for organisations.

“Culpability will be graded as low, negligent, reckless or deliberate and any financial penalty will be based on a percentage of weekly income (ranging from 25% to 700% depending on the seriousness of the offence and culpability of the offender). Individuals can also face custodial sentences for more serious offences. It is clear from these proposals that the Sentencing Council is issuing a strong signal that safety related offences are recognised as potentially very serious criminal offences which merit the imposition of tough sentences.

“There is particular focus on increasing sentences for larger organisations to ensure that the punishment is appropriate and effective in changing future behaviours and attitudes.”

The Council is now seeking views on its proposals through a consultation and is calling for feedback from people working in industry, the criminal justice system or regulatory enforcement. In particular it is interested in feedback on the approach to sentencing, what factors should make these offences more serious or less serious, the principles of sentencing in this area and sentencing levels.

The consultation will run until 18 February and you can have your say here.

Commenting following the release of this consultation, Sentencing Council member, Michael Caplan QC, said:

“We want to ensure that these crimes don’t pay. They can have extremely serious consequences and businesses that put people at risk by flouting their responsibilities are undercutting those that maintain proper standards and do their best to keep people safe.

“Our proposals will help ensure a consistent approach to sentencing, allowing fair and proportionate sentences across the board, with some of the most serious offenders facing tougher penalties.

“This is a consultation: we are interested in hearing feedback on our proposals so we can develop sentences which people understand and have confidence in.”

Construction sites failing inspections

While the news from the Sentencing Council should make companies realise that health and safety needs to be top of the agenda, the HSE’s update last week will also give organisations something to think about.

It was reported that 40% of construction sites are failing to properly protect workers after the HSE carried out a month long inspection initiative in recent weeks.

HSE said that unacceptable conditions and dangerous practices were found at nearly half of the 1,748 repair and refurbishment sites visited by HSE Inspectors, with one in five sites so poor, formal enforcement action was required.

HSE stated that many of the issues found could have been easily prevented with simple, straightforward management and planning.

The initiative was focusing on health risks and 35% of the notices served were for issues such as management of asbestos, failure to control exposure to harmful dusts, noise and vibration, and insufficient welfare.

Despite all of this, failure to provide basic safety measures for people working at height was once again the most common problem discovered by Inspectors, with 42% of all enforcement notices served for this activity.

The need to protect your workforce remains as strong as ever with global statistics showing that every 15 seconds, a worker dies from a work-related accident or disease, while every 15 seconds, 160 workers have a work-related accident.

The International Labour Organization (ILO) states that workplaces claim more than 2.3 million deaths per year, out of which 350,000 are fatal accidents and close to two million are work-related diseases. Furthermore, the ILO says that 313 million accidents occur on the job annually, with a large proportion of these resulting in extended absences from work. According to ILO, the human cost of this daily adversity is vast and the economic burden of poor occupational safety and health practices is estimated at 4% of global GDP each year.

These figures demonstrate how vital it is that employers across the world pay particular attention to the safety of the workplace and ensure that their workforce can return home safely after work.

Commenting on the findings from its month long initiative, HSE’s Chief of Construction, Philip White, said:

“These results show that whilst the majority of employers in the refurbishment sector are getting it right, a significant part of the industry is seriously failing its workers.

“The inability to properly plan working at height continues to be a major issue, despite well-known safety measures being straightforward to implement.  It is just not acceptable that Inspectors had to order work to stop immediately on over 200 occasions because of dangerous practices.”

He continued:

“We also find health is often overlooked as its implications are not immediately visible, however the effects of uncontrolled exposure to deadly dusts such as asbestos and silica can be irreversible. We urge industry to ensure the most basic of measures such as use of protective equipment and dust suppression methods are put in place to help protect the future health of workers.

“We need to continue to educate industry through initiatives like this and encourage a change in behaviour on small projects where over half the industry’s fatal accidents still occur and many workers become seriously ill.”