Associate Andrew Clarke joined Gullands’ criminal and regulatory team in 2015 to concentrate on health and safety law. He has advised on health and safety and regulatory crime alongside his personal injury and inquests practice since qualifying in 1994.
Courts will have to consider the following:
- 'Very high', where there is a deliberate breach of or flagrant disregard for the law.
- 'High', if it falls far short of the appropriate standard. For example ignoring industry standards, failing to heed concerns when raised, failing to act on previous incidents, allowing breaches to subsist over a long period of time and where there are serious systemic failings.
- 'Medium', defined as between 'high' and 'low'
- 'Low', where there were significant efforts to address the risk although they were inadequate or there was no prior event or warning indicating a risk. Failings must be minor and not systemic.
Traditionally prosecutors have been mainly preoccupied with the outcome of an incident but the new guidelines now also look at the risk of harm.
The net effect is to bring cases that could have been fatal or serious into the “high harm” category. Many health and safety incidents have the potential for death or serious injury and prosecutors are likely to highlight this fact.
The guidelines include case studies such as a near miss scaffolding collapse in a high street. Company turnover was £3m. It was a medium culpability case with a high risk of “level B” harm, a medium risk of “level A” harm (death or a lifetime of dependency) but not involving large numbers of people. The starting point was £24,000 and category range £12,000 - £100,000.
4. Aggravating and Mitigating Factors
Aggravating factors include cost cutting, deliberate concealment, obstruction of justice and falsification of documents. While Mitigating factors include no previous convictions, remedial steps taken and effective H&S procedures.
The court applies these within the “category range” and may consider factors including profitability, profit margin, benefit derived from the offence, whether the fine could put the offender out of business and impact on third parties such as employees.
How will the guidelines be applied?
New guidelines for environmental offences were looked at by the Court of Appeal in 2015 giving us an idea of what is to come. Thames Water allowed untreated sewage to enter an SSSI. The fine was £250,000. The court said objectives of punishment, deterrence and the removal of gain must be achieved by the level of penalty imposed. This may well result in a fine equal to a substantial percentage, up to 100% of the company’s pre-tax net profit, even if this results in fines in excess of £100m.
These comments involved a huge utility company, but warn us that fines equal to a substantial percentage of a company’s net profit are a distinct possibility, particularly as guideline fines for health and safety are set higher than for environmental offences.
How should organisations respond?
Organisations should study the definitions of culpability and the aggravating factors and make sure the definitions do not apply to them. Avoid allowing breaches to subsist over a long period of time which is an indicator of high culpability. Particular attention should therefore be paid to systems of monitoring and review so issues are never left unaddressed. The new guidelines expect to see directors and senior managers proactively leading health and safety so organisations should also study HSE guide Leading health and safety at work (INDG417rev1).