Regulatory safety fines to have “real economic impact”

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On 1 February 2016, the Sentencing Council’s Definitive Guidelines for Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences came into effect. They have, as intended, led to a step change increase in the level of fines being handed down to offenders of serious regulatory offences.

On 1 February 2016, the Sentencing Council’s Definitive Guidelines for Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences came into effect. They have, as intended, led to a step change increase in the level of fines being handed down to offenders of serious regulatory offences.

Under the 2016 Guidelines, the court evaluates a defendant’s level of culpability, as well as the seriousness of the harm risked and likelihood of occurrence. Appropriate fines are then determined based on the offending organization’s turnover.

According to the guidelines, fines are should be: “sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation.”

Data from a FOI request revealed the largest fine of 2016 was 2.5 times that of the largest of 2015 and almost 10 times that of 2014 . Furthermore, hefty fines are no longer being reserved for cases involving a vitality: in HSE v Merlin Attractions Operations Ltd, the theme park corporation was fined £5 million after passengers were injured in a roller-coaster collision, and in R (HSE) v ConocoPhilips (UK) Limited, the energy giant was fined £3 million for a gas leak which never resulted in any actual injury (though this was pre-2016 Guidelines).

Other studies have shown an increased tendency to prosecute directors and senior management staff alongside their organizations in respect of health and safety offences. There’s also been a surge in the rate of individuals receiving custodial sentences.

Continuing this trend, on 4 July 2017, the Sentencing Council launched a consultation on sentencing guidelines for other manslaughter offences (ie other than corporate manslaughter) such as individuals sentenced for gross negligence manslaughter offences related to failing to uphold health and safety duties.

Indeed, the press release accompanying the consultation specifically notes: “the Council expects that in some gross negligence cases, sentences will increase. An example could be where a death was caused by an employer’s longstanding and serious disregard for the safety of employees which was motivated by cost-cutting.”

The recent Tipper Truck case serves as a notable reminder of the way that a court will approach sentencing. In that case, a heavily-loaded tipper truck ran out of control after its break system failed, killing three men and a four-year-old girl. The driver of the truck was acquitted of all charges, however, the director of the company that owned the truck, and the mechanic who serviced it just weeks prior to the crash, were both found guilty of four counts of gross negligence manslaughter and both received lengthy custodial sentences.

The police commented that their investigation: “revealed a shocking picture of a company culture with complete disregard of safety and maintenance…If there is a message which needs to come from this tragic incident, it is that company owners must adhere to a duty of care to the public.”

Seeking legal advice at an early stage is thus becoming an imperative, whether it be to ensure preventative measures are in place, or also for the appropriate management of investigation. Demonstrating significant efforts were made to address risks may limit culpability and having a clean record can count towards mitigation.

Alternatives to prosecution, like Enforcement Undertakings (EUs), though only available in limited circumstances, could also lead to favourable outcomes if things do go wrong. Increasingly common, EUs are one type of civil sanction introduced by the Regulatory Enforcement and Sanctions Act 2008, available to certain regulators (including the Environment Agency, Natural England and Health and Safety Executive) as an alternative to prosecution when dealing with regulatory non-compliance issues.

Technically not a sanction, as they are purely voluntary, EUs are legally binding agreements offered by offenders to carry out repairs and/or make payments for restoration. For example, the EA has been accepting EUs that set out particular remediation steps and contribute to local environmental charities. Not only do EUs avoid conviction, which can be particularly devastating for organizations tendering public contracts, they allow staff to continue to focus on their job instead of having to invest time and costs on court proceedings.

The HSE hasn’t yet adopted powers under the RESA 2008, but as EUs become more popular in other regulatory areas, this is a space to watch.
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