A new tariff for sentencing health and safety offences

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Construction businesses in the UK need to be reminded of our sentencing guidelines for health and safety offences says Mark Wilson, Regulatory and Commercial Crime Lawyer and Partner at Richard Nelson LLP…

The news is full of stories regarding health and safety offences, along with a recent incident of a construction worker falling from a skyscraper in the US. It is therefore vital that construction businesses are aware of our sentencing guidelines for health and safety offences here in the UK.

New sentencing guidelines

The health and safety regulators within the UK are HSE. Their new definitive Guideline for Sentencing Health & Safety Offences has been introduced with the stated aim to make sentences more consistent, fair and proportionate. For the defendant business or individual, they mean greater predictability of sentence – but these sentences could well be much harsher.

How will they work in practice?

The guidelines came into operation for cases sentenced in court on and after 1st February 2016.

They first set out a complex lock-step approach to calculating the fine based upon assessing prescribed levels of culpability (blame), risk of harm (seriousness plus likelihood) and size of the offender (on turnover). Secondly, a matrix is then applied that gives the starting point fine. Thirdly, aggravating and mitigating factors and the overall effect have to be taken into account before lastly, the actual fine must fall within the minimum and maximum range (within the matrix).

The guidelines envisage increased fines of up to £20 million for corporate manslaughter and £10 million for other health and safety offences.

How are different sized companies affected?

The guidelines cover most businesses, from the smallest up to large companies with £50 million+ turnover. They do not cover very large organisations (turnover greatly in excess of £50 million) as these are left to the courts when arriving at a fine.

The Thames Water case back in 2014 decided how the very largest companies should be fined for environmental offences. This is of direct relevance to health and safety cases too, as the recent environmental sentencing guidelines are identical in application to the ones in question.

Thus, whilst not in the guidelines, the effect is that for the most serious offences, companies can be fined 100% of annual pre-tax net profit (which could be over £100 million), and even the least serious cases are likely to result in fines of several millions of pounds. Plus, the actions of management, including the main board, before, during, and after the incident will have a major impact on the fine set.

What is the most important issue to be aware of?

What is clear is that in all cases the most important issue affecting sentencing for the defence will be to proactively negotiate and influence what the court will apply in terms of culpability, risk of harm, and aggravating and mitigating features – as these, along with the financial position, will directly flow through to the size of the fine. For this reason it is more vital than ever to have expert legal defence from specialists experienced in this work. Without this a court experience is likely to be a mechanical and expensive one.

It is also worth bearing in mind that individuals and directors can also be sentenced and that this can result in imprisonment rather than fines.

And environmental offences?

In July 2014, the very similar definitive Guideline for Sentencing Environmental Offences was introduced. Acclaimed Regulatory and Professional Discipline, Marie Dancer, examined these in her “New Guidelines for Environmental Prosecutions” article on November 10th, 2014. I also considered how these were operating in practice and particularly the effect of the Thames Water case in this recent article called “Fines for environmental offences – an update”.

In an industry that inherently has its dangers, it’s important for construction businesses to be aware of these new guidelines, and hopefully not suffer a similar fate to that experienced by the likes of Thames Water. If you are unfortunately caught up in a health & safety investigation from the HSE, ensure you choose legal representation with the experience to defend such a threat to your business. ■

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Mark Wilson

Regulatory and Commercial Crime Lawyer and Partner

Richard Nelson LLP

Tel: 0845 216 2000

help@rnllp.co.uk

www.richardnelsonllp.co.uk

Twitter: @RNelsonLLP

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