New increased Sentencing Guidelines

New increased Sentencing Guidelines were introduced for Health & Safety cases in February 2016. Since that date, the sanctions imposed by the Courts have demonstrated the disapproval by the Court of corporate failures which have led to injury, death and illness – as well as a desire to deter such failures by other businesses.

Since the introduction of the new guidelines, fines have regularly exceeded the £1 million mark. Courts have also started to impose large fines on companies where workers or others have been exposed to serious Health & Safety risks – even where an actual incident has been avoided.

Increased fines and the imposition of custodial sentences has resulted in increased public interest and media attention as regards Health & Safety cases.

Setting the Penalty

The 2016 Guidelines apply a formula to set the penalty. The Court will first decide whether the Defendant’s culpability was very high; high; medium; or low.

The next thing it will consider is the level of harm arising (e.g. from minor injuries to long term disability) and how many people were exposed to the risk of harm. The actual harm will be rated at between 1 – 4 (with 4 being the highest).

The harm rating and culpability assessment are then applied to a series of tables with fine ranges depending on the Defendant Organisation’s level of annual turnover.

The 4 brackets range from organisations with a turnover of less than £2 million, up to large organisations with a turnover of £50 million and above. Fines between the 4 brackets have a range of between £50 up to £10 million.

Mitigating circumstances include a good safety record and early guilty plea. Aggravating factors can include obstructing an investigation or cost cutting at the expense of safety – both of which will push up the level of fine.

There are a set of separate fining guidelines for corporate manslaughter from £180,000 up to £20 million. However, larger fines are no longer limited to a fatality.

Individual Prosecutions

Individuals are coming under greater scrutiny and higher sanctions are being imposed. In 2015/16 46 company directors and senior managers were prosecuted under Health & Safety law and it is increasingly likely that a director could go to prison where there is a flagrant disregard or “blind eye” mentality shown by directors.

There are 5 key things that an organisation should do to ensure that it is Health & Safety compliant. These are:-

  • Lead Health & Safety from the top and ensure that a suitable Health & Safety governance structure is in place within your business.
  • Check whether your “competent person” has Health & Safety competencies that are fit for purpose for your organisation.Ensure that all Health & Safety risks are properly identified and assessed in written Risk Assessments.
  • Review how Health & Safety risks and safe working procedures are managed operationally.
  • Check that procedures are being followed and risks managed and act to make changes as needed.

Ensuring the health and safety of employees and others can be key to sustaining the good reputation of an organisation and contributing to its success. Not only may this help in attracting and retaining good staff – but it may also place your Company in a prime position in the marketplace.

About the authors

Andrew Spooner Consultant

Andrew specialises in commercial disputes including complex claims for breach of contract and negligence – particularly in the manufacturing and engineering industries. He has acted in shareholder disputes and other claims arising out of corporate transactions and partnership disputes, for solicitors, doctors, surveyors, accountants and farmers. He has particular expertise in defending and obtaining injunctions involving senior employees (involving breaches of covenant and issues of confidentiality). He has successfully obtained and supervised Search & Seizure Orders. He also acts in proceedings brought by regulatory bodies including the Health & Safety Executive, Trading Standards and Environment Agency.

Tariva Thomas Associate

Tariva is a member of the Tax and Financial Services Litigation team dealing with disputes relating to investments, tax avoidance schemes and pensions. Tariva advises corporates, individuals, financial institutions and FCA regulated firms.