Opinion

Guilty firms feel the impact of heavier fines

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In February 2016, the Sentencing Guidelines Council introduced new sentencing guidelines for health and safety offences in the workplace.


Organisational safety was put into sharp focus and hefty fines were promised for those companies failing to protect employees against known and preventable safety risks. True to their word, fines have rocketed across industries, with courts handing down fines in the £millions in some cases.

The guidelines require courts to consider culpability, the seriousness and likelihood of harm caused or risked, together with turnover. A business with a turnover in excess of £50 million could face fines of up to £10 million for the most serious offences, while corporate manslaughter charges could see fines reaching £20 million. In the three years since the guidelines were introduced, the 10 highest fines handed down total £30.4 million.

One size doesn’t fit all

Large organisations have grabbed the headlines for these huge fines, with the £5 million handed to Merlin Attractions Operations Ltd in the wake of the Alton Tower’s Smiler incident being the highest fine to date. However, the majority of prosecutions are against much smaller businesses that have lacked the manpower or financial resources to equip well-structured safety management systems.

Merlin Attractions was fined £5m after members of the public, including Victoria Balch (pictured outside court) suffered serious injuries when the Smiler rollercoaster crashed

Fines are commensurate with turnover and while smaller businesses rarely face million-pound fines, they can be subject to fines running into the hundreds of thousands. Micro-business Avon Joinery Limited (turnover: £701,703), for example, faced a huge fine of £230,000 when an employee’s finger was severed after his hand came into contact with a circular saw – potentially catastrophic for the organisation. No court sets out to destroy a business, its ability to remain viable following a fine is taken into consideration; however, this does not mean the fine will not be punitive and the impact must be felt across the business.

The assessment of culpability can increase the size of a fine considerably, as there is a sliding scale from low to very high with the varying bands of fines being huge in some cases. The likelihood and risk of harm is also considered on a scale with the highest risk of harm being death or catastrophic injury, down to injuries from which people recover without issue.

The combination of the category of harm and the culpability of the business can mean that very large companies with the high culpability and high harm categories will easily face a fine of several millions if mitigation is not accepted.

Last summer, the Sentencing Council announced revised sentences for individuals convicted of gross negligence manslaughter (GNM) which was excluded from the 2016 guidelines. The new guidance adopts a more punitive approach to sentences; with the most serious cases seeing individuals face up to 18 years in prison. Significantly, the sentences are retrospective, so will apply to all cases heard before the courts after November 2018, irrespective of the date of offence.

Ignorance is no defence to any prosecution irrespective of the size of business

Risk calculation

Every industry carries its own unique set of hazards, all increasing the risk of harm. This was a key development in the guidelines, as the risk of harm is considered irrespective of whether an injury has occurred. In practice, this means that a system of work which exposes employees to risk is vulnerable to a prosecution. The more employees exposed and the length of time that risk has existed are also considered.

Whether you are a business which involves the operation of large machinery, providing a public service or running a hotel, there are many and varied aspects of risk.

Looking forward

Ignorance is no defence to any prosecution irrespective of the size of business. Organisations must be proactive and reactive in terms of risk assessment and training. Reviewing the adequacy of policies and procedures and responding effectively to near misses to prevent future incidents are all important features of what a good safety management system looks like.

In some companies, a culture of confusion, or even disinterest, can exist in response to health and safety regulation. It is therefore, vital to tackle this culture from the top down, and manage regulations in a proactive manner which leads to real change for the safety of staff.

The past three years have sent a stark message across all sectors. Engagement with safety issues and education across industries is key to ensuring that safety statistics improve across the board. Managing risk is a priority.

Helen Devery is head of health and safety at BLM where she is also a partner

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