Jamie Varney: Bigger fines coming for safety breaches

Health and safety measures have saved thousands of lives. Picture: TSPL

From stand-up comedians on the stage to would-be politicians on the doorstep, health and safety legislation has become the butt of thousands of jokes. But protecting the health and the safety of customers and staff is no laughing matter.

Since it was introduced just over 40 years ago, the Health & Safety at Work Act is believed to have saved more than 5,000 lives, a higher figure than any other piece of legislation, including the ban on drink driving or the introduction of seatbelts. When the act was introduced in 1974, there were 651 fatalities at work; that figure has now dropped to 142, with non-fatal injuries plunging by more than 75 per cent.

Although the number of deaths and injuries has plummeted, the justice system continues to crackdown on companies and organisations that flout the law. Earlier this month, the Sentencing Council for England & Wales issued its definitive guidelines on the sentences for corporate manslaughter, food safety and food hygiene offences, and health and safety offences.

When they come into force on 1 February, the guidelines will significantly increase the level of fines imposed by courts south of the Border. Previous guidelines are regularly referred to in Scottish courts during sentencing, so they are likely to have an effect here too.

The new guidelines introduced a stepped approach to sentencing, with a judge first assessing the seriousness of an offence and then placing it in a category, based on “culpability” and “harm”. A corporate body’s “culpability” will range from the very high, which includes a deliberate and intentional breach of the law, through to low, where an organisation just falls short of the standard expected.

Judges will assess “harm” by considering actual harm and the likelihood of harm occurring, whether it was “high” through “medium” to “remote”. Categories of injury will range from fatalities to those from which a full recovery is made.

Once the “offence category” has been determined, the court must consider the size of the offender to work out the starting point and range of sentence. For corporate bodies, four categories of turnover have been laid down: micro (revenues up to £2 million); small (£2m-£10m); medium (£10m-£50m); and large (over £50m).

If a micro company has committed the most serious offences – where death or permanent injury has occurred – and if there was a “high” risk of harm occurring, it could face a fine of £250,000-plus. With mitigating factors, this could be reduced to £150,000 but if there were aggravating factors, it could rise to £450,000. Similarly, large companies could face fines starting at £4m.

The guidelines also allow judges to consider the wider impact of significant fines, such as staff being made redundant if the company folds. This mirrors the approach Scottish courts have already adopted,.

English courts have traditionally handed down larger fines; if Scottish judges follow the new guidelines, penalties are likely to increase significantly. Yet Scotland might issue its own guidelines, with the newly-created Scottish Sentencing Council.

Scottish companies and organisations should prepare themselves for significantly higher fines if they’re found guilty of breaching the law. Ultimately it is hoped that such fines will act as a deterrent, forcing companies to spend money on improving health and safety rather than paying the penalty in court.

• Jamie Varney is a partner at BLM www.blmlaw.com