Wake-up call: Companies face huge penalties for breaching health and safety laws

31 July 2015
Wake-up call: Companies face huge penalties for breaching health and safety laws

Fines are now based on an organisation's ability to pay and can run into millions of pounds, say Semra Zack-Williams and Dewi Ap-Thomas

Imagine somebody has had a serious accident in your kitchen. A RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations) has been submitted and the enforcing authorities have investigated.

Your company has attended an interview under caution and the enforcing authority has decided to prosecute. You plead guilty at court and are sentenced for the offence. Under new guidelines set to be introduced in early 2016 for health and safety, corporate manslaughter and food/hygiene offences, penalties for most defendants will be higher than ever before.

The law
Health and safety law remains unchanged. The main legislation to ensure the health and safety of employees and non-employees, so far as is reasonably practicable, is still the Health and Safety at Work etc Act 1974.

However, the change relates to the manner in which the guilty are punished for offences committed. Previously, Crown court judges used experience, judgement and aggravating/mitigating factors to ascertain the appropriate level of penalty, but the new guidelines direct judges to specific starting points in relation to the level of penalty based on the turnover of your business.

What are the implications?
The aims of the guidelines are "to ensure all sentences are proportionate to the offence committed and in relation to other offences", while following the principle that any fine "should be sufficiently substantial to have a real economic impact that will bring home to both management and shareholders the need to comply with the legislation and achieve a safe environment for workers and the public".

Even for small businesses with a turnover of less than £2m, depending on the severity of the incident and culpability of the offender, fines can range from £150,000-£450,000. Large companies with a turnover in excess of £50m may face fines well in excess of £2m, again dependent on severity, culpability and ability to pay.
Fines for breaches of health and safety law (including corporate manslaughter) cannot be indemnified by insurance and must be paid by the offender. Furthermore, higher fines may attract greater media interest and therefore unquantifiable reputational damage.

The practical methods to prevent breaching health and safety law remain unchanged. It is imperative that companies and individuals ensure they have competent health and safety advice, adequate safety management systems, safety policies, procedures and training. Furthermore, record-keeping and documentation is paramount. Avoiding accidents is more important now than ever before.

To-do checklist

  • Ensure you have competent health and safety advice.
  • Ensure risk assessments are completed, employees are involved and controls are implemented.
  • Ensure you have documented policies and procedures in place.
  • Ensure employees are trained in their tasks and any health and safety requirements.
  • Ensure you have sufficient measures in place to monitor, audit and review the sufficiency of your current safety management systems.

The worst-case scenario for a large company with a high culpability, with a high degree of risk created or significant harm caused, could be a fine on conviction of:

  • For corporate manslaughter: £4,800,000 to £20,000,000 (starting point:£7,500,000).
  • For H&S offences: £2,600,000 to £10,000,000 (starting point: £4,000,000).

Furthermore, for individual offenders, there is also the opportunity for a judge to sentence an individual to a term of mprisonment as well as a fine. On conviction, a worst-case scenario includes:

  • Gross negligence manslaughter: life imprisonment.
  • For H&S offences: one to two years' custody (starting point: 18 months' custody).

Semra Zack-Williams is a health and safety consultant at Weightmans LLP

Dewi Ap-Thomas is an associate solicitor at Weightmans LLP

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