Insight

Have increased fines made construction safer?

26 January 2020

Four years on from the introduction of stiffer sentences for safety offences, what impact has there been on construction site safety? CM investigates.

The new sentencing guidelines for safety failings, introduced in February 2016, had an almost immediate impact – in financial terms at least.

Fines – based on a company’s last three years of annual turnover – shot up. Financial penalties for health and safety offences could range from £50 to £10m, and up to £20m for corporate manslaughter, with the option to go even higher for very large organisations. 

Suddenly, big-name companies like Balfour Beatty and Kier were being hit with seven-figure penalties following serious accidents (see below). By 2018/19, the average fine per conviction almost doubled to £107,000, up from £57,735 in 2015/16. In construction, fines for health and safety offences hit £15.7m in 2018/19 – the most recent year for which figures are available.

But are the guidelines making a difference to industry safety practices, beyond forcing prosecuted companies to fork out more cash?

“The new sentencing guidelines set out to ensure that it wasn’t ‘cheaper to offend than to take appropriate precautions’,” says Ian McKinnon, managing director of safety compliance adviser CHAS.

“While prioritising health and safety is a moral obligation for any organisation, it also now makes good business sense.”

“We are seeing proactive action to minimise harm, including greater engagement at a senior level and documenting good safety practices.”

Chris Newton, Keoghs

Chris Newton, head of the national crime and regulatory team at law firm Keoghs, believes the prospect of stiffer fines has led to a more “robust” approach to health and safety.

“We are seeing proactive action to minimise harm, including greater engagement at a senior level, documenting good safety practices, learning from and implementing the results of audits, responding to and learning from near misses and assessing immediate areas for improvement.”

Fewer people died in construction in 2018/19 than in any other 12-month period on record, which may suggest that the new approach is working.

However, there has also been a general downward trend in the number of cases the Health and Safety Executive (HSE) has bought to courts in England, Scotland and Wales, from 682 in 2015/16, to 394 in 2018/19.

Newton questions whether it is down to improved safety. “The HSE is currently looking into the reasons – one of which may be their reduced budget (down about 30% over the last 10 years) or a 25% fall in the number of inspectors since 2010,” he says.

“Another reason could be the Fee for Intervention scheme where organisations pay a fee if the HSE determine that they are in material breach of health and safety legislation. It may be the time taken to administer this new charging regime has left less time for other enforcement action.”

There is criticism that basing fines on turnover can be a blunt instrument. “Some large turnover organisations feel that an approach based so firmly on turnover can increase their regulatory burden and their health and safety investment,” says Newton.

In any case, companies already face plenty of costs following safety failings.

“The impact of reputational damage can be significant, resulting in a loss of business and deterring investment,” says McKinnon. “Extra uninsured costs include the cost of incident investigation, business disruption, legal costs and project delays.”

To effect a seismic shift in safety culture, some in the industry believe prosecutors need to look further up the supply chain.

“There have been hardly any big fines handed out to major construction clients,” a technical director at one consultant told CM. “Until that starts happening, we won’t see much difference in safety on site.”

The 10 biggest fines in the construction industry

Since 2016 big-name companies have been hit with seven-figure penalties

The view from the CM reader panel

What the industry thinks of the changes in safety sentencing.

Since the introduction of the new guidelines, there has been a noticeable change in behaviour from the top down.

With the threat of corporate manslaughter being taken seriously at board level, signing a safety policy and then commuting responsibility down the ladder is now recognised as simply unacceptable.

Board directors have begun to realise they may end up in prison through their actions or inaction, leaving their company large fines to pay.

Barry Talbot, head of planning, McGee Group

I am an advocate of legislation to reduce bad practice – it means that the implications of defaulting are clear to allcomers.

It is critical all project team members are aware of their professional responsibility particular to health and safety.

There is a collective role to play, providing adequate education, training, and PPE, notwithstanding the future use of the asset in occupation.

“As well as naming and shaming, we should give credit where it is due: shine the spotlight on the businesses with excellent health and safety history and reputation.”

Christine Gausden

Christine Gausden RD, lecturer construction management, University of Salford

Health and safety in every industry is correctly acknowledged to be of paramount importance, and so the continuation of dispensing just penalties and sentencing with regular reviews is vital. In addition to keeping the fines in place, companies need to take full responsibility by submitting to the public detailed information covering the incident, and follow up with lessons learned.

But, as well as naming and shaming, we should give credit where it is due: shine the spotlight on the businesses with excellent health and safety history and reputation.

Sue Hanford, principal project manager, Surrey County Council

From my position in the architectural world, it is clear that the myth that “designers cause more than 50% of accidents” has now been exposed as total nonsense. Designers have been wrongly castigated by non-designing health and safety practitioners and others who have been coerced by contractors to implicate designers into their own health and safety prosecutions.

Paul Bussey, technical design: CDM/fire/access lead, Allford Hall Monaghan Morris

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