October 2016: A homeware company has been sentenced to the largest fine to date for a local authority prosecution following the death of an agency worker who sustained fatal brain injuries. The worker fell eight feet on to concrete from a platform with no guard rail while he was helping to unload a delivery. He had been working at the warehouse for less than a week.
An investigation by Environmental Health Officers found that although he had undergone training in manual handling and a basic induction, there was no record of him having any training on working at height. The company pleaded guilty to two breaches of the Health and Safety at Work etc. Act 1974 and was fined £2.2 million and ordered to pay prosecution costs of £21,000 to Chiltern District Council.
July 2016: Several recent Crown Court cases illustrate the potential consequences for businesses of breaching health and safety legislation:
- An employee at a fish processing company suffered fatal injuries when a stack of boxes of frozen fish fell on him while he was helping to clear up a previously fallen stack of boxes in one of the cold store areas. The Health and Safety Executive (HSE) found that there was no safe system of work or instructions given to staff on how pallets should be stored. The company also had no written procedure or plan for dealing with incidents of frozen boxes of fish falling. The company was fined £500,000 and ordered to pay prosecution costs of £24,800 to the HSE.
- An 89-year-old care home resident received significant scalding injuries and subsequently died of those injuries. An HSE investigation found that bathroom taps were not adjusted to limit the temperature of the water to a safe level for bathing. The investigation also identified that the company policies and procedures were deficient, particularly as residents were vulnerable and depended on care providers for a safe environment to live in. The company also failed to effectively communicate information and instruction to its staff so that the control measures could be implemented effectively. The company was fined £100,000 and ordered to pay prosecution costs of £50,000 to the HSE.
- An HSE investigation was initiated after an engineer fell seven metres from a loft in London, breaking his back and his ankles. He had been fixing a telephone fault in the roof void of a residential block of flats. The investigation identified several management failures by the telecoms company, including inadequate planning of work taking place near fragile surfaces, and checking that it was carried out safely. The company was fined £500,000 and ordered to pay prosecution costs of £98,913.51 to the HSE.
- During a refurbishment task, an operative using the controls within a refuse truck’s cab closed the tailgate on a worker who was at the rear of the vehicle, crushing him to death. An HSE investigation found that a fault with the safety limit switch had jammed it in the actuated position, which meant that it was possible to completely close the tailgate using the in-cab controls. The investigation identified that the incident occurred due to a poor system of work resulting from an unsuitable and insufficient assessment of the risks, including failure to prop open the tailgate adequately. Two duty-holder companies were fined £815,000.
March 2016: Businesses should take note of a case that illustrates the higher fines which can now be awarded in the magistrates’ court since the Definitive guideline for health and safety offences was introduced on 1 February 2016. A chemical company was fined £333,000 by magistrates and ordered to pay £110,000 prosecution costs. The company pleaded guilty to offences committed in January 2009, when an uncontrolled release of dangerous substances put both employees and members of the public at risk. Approximately 4,500 people were asked to stay indoors for two to three hours as a result of the phosphorus and phosphine gas release.
January 2016: Two recent cases illustrate the large fines that can be imposed on businesses for health and safety breaches:
- A packaging company has pleaded guilty at Southwark Crown Court to breaching Section 2 of the Health and Safety at Work etc Act 1974. The company was fined £750,000 and ordered to pay costs of £29,511. A 26 year old worker was fatally crushed when his arm was caught in a powered roller while he was clearing sand around the base of an in-feed conveyor at the company’s bagging site
- A coachbuilder has pleaded guilty at Trafford magistrates’ court to breaching section 2 (1) of the Health and Safety at Work etc Act 1974. The company was fined £50,000 and ordered to pay prosecution costs of £5,890. An employee was pushing wood over a planer when his fingers touched the blades. This caused the amputation of his little finger and injuries to his right hand that later required skin grafts.
This business briefing sets out the potential implications for a business that a conviction for a breach of health and safety legislation can have on its operations. A conviction for a safety-related breach can have an immense impact on a business and the individuals within it. It is a criminal offence to breach the obligations contained within health and safety legislation. If a safety breach within a workplace causes a death, then those responsible may also face prosecution for gross negligence manslaughter (in the case of individuals) or corporate manslaughter (where the defendant is a business).
Fines: Fines imposed following a conviction for a health and safety breach range from a £50 to £10 million. Coupled with the need to pay not only the business’ own legal costs but also the prosecutions’, non-compliance with health and safety law is a costly exercise.
Reputational damage: Increasingly, companies look carefully at the safety record of potential business partners and requests for details of any safety convictions have become standard on tender questionnaires. The damage caused to a business’ reputation by a criminal conviction could last longer than the initial financial outlay.
Prosecution of individuals: When investigating safety breaches, inspectors routinely consider the role of individuals in workplace accidents. Although the level of fines imposed against individuals convicted may not be as large as a fine imposed on a business, the potential impact on the individual can be severe.
Individuals can be imprisoned for breaches of health and safety law, with sentences of up to six months in the Magistrates’ Courts and up to two years in the Crown Courts. Even individuals that avoid a custodial sentence will have to live with the stigma of a criminal conviction, which could restrict their ability to travel abroad or work in certain industry sectors.
Who can be prosecuted for safety offences? There are a number of groups that can face prosecution for breaching health and safety requirements, these include:
- Employers (including limited companies, unincorporated associations, partnerships or individuals)
- The self-employed
- Owners of premises used as a workplace
- Individual employees
- Designers, manufacturers, importers or suppliers of work equipment
What factors will the HSE consider when deciding whether to prosecute safety breaches? The HSE has published a number of documents that set out how it will investigate and prosecute the health and safety breaches for which it is responsible. The documents highlight the factors that the HSE considers will favour a prosecution, for example, where:
- Death was a result of a breach of legislation
- There has been a reckless disregard of health and safety requirements
- Inspectors have been intentionally obstructed in the course of their duties
- False information has been supplied, or there was an intent to deceive, in relation to a matter which gives rise to a significant risk
How can a business influence the decision to prosecute? In some less serious cases (for example, where it is a purely technical offence), it may be possible to influence the enforcing authority’s decision to prosecute. This could be achieved in a number of ways, for example:
- By co-operating with the regulator’s investigation
- If appropriate, by accepting an invitation to send a representative of the business to an interview under caution or by providing written answers to questions under caution
Insurance and criminal liability
- Check whether the business’ existing insurance policy includes legal expenses cover in the event of an investigation and a criminal prosecution being brought against the business for a safety-related breach
- Many insurance companies have panels of preferred lawyers to whom they refer their insured for legal advice. Nevertheless, a business is entitled to be represented by the lawyer of its own choice
- Most policies cover defence legal costs. However, if several members of staff are also prosecuted, the cover may not extend to all of them. Check whether the existing policy includes protection for senior managers and directors
- Although defence costs may be covered by such policies, any fine imposed on the business following conviction certainly will not be. Similarly, where the court orders the defendant to pay the prosecution’s reasonable costs in bringing the case, these costs are rarely covered by business insurance
The content of this Business Briefing is for information only and does not constitute legal advice. It states the law as at October 2016. We recommend that specific professional advice is obtained on any particular matter. We do not accept responsibility for any loss arising as a result of the use of the information contained in this briefing.