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Industry feels force of new sentencing

4 October 2016

Seven months on from the introduction of new sentencing guidelines for health and safety offences, Helen Devery at insurance and risk specialist BLM looks at what has changed.

Helen Devery

The new sentencing guidelines for health and safety offences, corporate manslaughter, food safety and hygiene offences came into force on 1 February 2016. They arrived with a relative and warranted fanfare of publicity and were described by many as the most significant change to health and safety in more than 40 years.

The number of deaths in construction rose in the April 2015/16 period to 43 – compared to 35 in the previous 12 months. Around 70% of fatalities occur on small sites with less than 15 workers and so the Health & Safety Executive (HSE) is continuing to put the industry under the safety microscope.

As an industry used to HSE scrutiny, the guidelines have already affected the construction sector perhaps more than any other and in July BLM reported that construction companies had already been ordered to pay almost £8m in fines since the beginning of the year.

Indeed, the three highest fines highlighted on the BLM health and safety sentencing tracker totalled £5.6m for the construction sector, all of which related to fatalities to either staff or customers. Directors of two construction companies were also given custodial sentences. One received six years after being found guilty of gross negligence manslaughter, the other was sentenced to six months after one of his employees was killed on site.

The legal costs were substantial too: the biggest three fines resulted in almost £185,000 in prosecution costs for the companies involved. Altogether, the prosecution costs associated with fines to UK construction companies since February reached more than £530,000.

So what have the last seven months told us about the guidelines and how these are bedding into our legal system? What is the prosecution and courts’ approach to the fines and penalties and what lessons can the industry learn from these changes?

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The courts are being asked to consider a number of factors before determining sentence, including the levels of culpability and harm and this is where we are seeing most of the arguments and mitigation.

Culpability relates to the extent to which an offender failed to meet the standards required by law, for example, the extent to which they acted deliberately, recklessly or negligently and the courts are likely to consider factors such as whether failings were systemic throughout the organisation as well as any short cuts taken to save money.

Given the significant variation in the starting point of fines (and custody threshold for individuals) between different offence categories, and the wide range within individual bands, the real battle ground is becoming the negotiations regarding the basis of plea and agreeing the appropriate offence category.

Experience tells us that regulators, whether that be the HSE, the local authority or otherwise, pitch the seriousness of an offence high. For example, it is regularly submitted that a defendant fell “far” short of the standard required and that breaches existed over time rather than being isolated.

Negotiations will, therefore, take on greater significance and it is foreseen that the unwillingness of parties to compromise will result in more cases going to trial. Credible evidence is needed to support the mitigating circumstances and early intervention to gather such evidence is often crucial.

"The causes of deaths and injuries remain generally the same - there is nothing new in the causes so measures must be taken to ensure that safety remains a number one priority and that risks are assessed carefully on each project."

Because of the higher fines, many cases are being referred to the Crown Court at the first appearance – once magistrates learn the range of fines available, they may be persuaded by the prosecution that the higher court is the suitable venue for the hearing. That may be the case, but until we have designated and specialist district judges who will determine these cases in the lower courts, the magistrates are reluctant to deal with such hefty fines, despite having powers to do so.

Turning to fines, the overall trend is upwards with fines being given out that far outstrip those previously ordered with many attracting unwelcome headlines. The new guidelines have introduced fines that are proportional to the size of the company, meaning that both small and large businesses should feel the same impact and that impact is punitive. The possibility of such heavy fines is certainly elevating prosecutions and accidents to board level quickly given potential impact on revenue as well as reputation.

One aim of the new guidelines was to ensure that businesses properly manage health and safety. That means proper investment in achieving health and safety compliance with a view to avoiding accidents, investigations and prosecutions.

The causes of deaths and injuries remain generally the same – there is nothing new in the causes so measures must be taken to ensure that safety remains a number one priority and that risks are assessed carefully on each project and that people are trained properly to do the tasks.

Health and safety must continue to be discussed at board level to ensure that it remains the business’s top priority. Evidence of good practice will be needed more than ever so the advice is to document systems and processes at all levels.

The cost of failures in safety have been brought into sharp focus by the introduction of these guidelines – a pro-active safety system will go a long way to avoiding accidents, subsequent prosecutions and where an incident does occur, provide powerful evidence to help mitigate the impact of the guidelines.

Helen Devery is a partner and head of health & safety at insurance and risk law specialist BLM

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