Since February 2016, we have seen organisations found guilty of health and safety offences facing bigger fines than before. In May, Balfour Beatty was fined £2.6 million for breaches which led to the death of a worker in an unshored, 2.4m deep trench and ScottishPower was fined £1.75 million after a worker was badly scalded by steam released from a faulty valve. He survived, but has been medically retired. Smaller companies have received smaller, but significant fines – a Birmingham-based construction firm was fined £100,000 following the fatal fall from a roof of a bricklayer. A year ago, such fines were rare.
The new sentencing guidelines apply to all cases considered since 1 February – regardless of when the offence was committed. The Balfour Beatty case related to an accident in April 2010, and whilst the company’s lawyers argued that it would be unfair to apply the sentencing guidelines given the time it had taken to come to court, the Judge disagreed.
The fine an organisation will face once found guilty depends on four key factors:
- Culpability (how guilty is the offender)
- Risk of harm created by the offence
- Size of the organisation (turnover – not profit)
- Mitigating and aggravating factors
Culpability is measured on a four-point scale. At the bottom end, the organisation needs to show it had made significant efforts to address the risk but on this occasion the measures were inadequate, or the failing was a one-off. At the top end, the court would look for evidence of a “deliberate breach of or flagrant disregard for the law” such as ignoring an HSE enforcement notice or warnings from staff or unions about a hazard. ScottishPower’s culpability could have been considered near the top end, in that the faulty valve had been reported as needing repair in 2009 and again in 2013, just two weeks before the accident.
The second step is to consider the risk of harm created by the offence on a scale of 1 (high likelihood of a serious outcome such as death or reduced life expectancy) to 4 (low likelihood of harm which would not be permanent. Whilst the guidelines give examples on the harm scale, there is no explanation of how to determine high, medium or low likelihood. Where an accident has occurred this is likely to influence the choice of harmful outcome considered, but where someone has had a narrow escape, the court could still determine a more serious risk had been present. If a large number of people are exposed to risk, this can also increase the harm category.
The sentencing guidelines then provide four tables relating to the turnover of an organisation. At the bottom end, a “micro” organisation has a turnover of less than £2 million; at the top end a large organisation has a turnover of £50 million or more. There is a note to explain that “where an offending organisation’s turnover … greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range.” There is still uncertainty over how this applies – for example, would an organisation with a turnover of £500 million (ten times the bottom limit in the large table) have penalties multiplied by a factor of ten? Only time will tell.
Each table provides suggested starting points and ranges for the fine, depending on culpability and harm as determined in the first two steps (see illustration below). The simplified table here shows the starting point and range of fines for only the highest and lowest culpabilities for the highest “risk of harm created by the offence” for the large and micro organisations.
From the starting point, the courts will consider mitigating and aggravating criteria – evidence of cost-cutting at the expense of safety or falsification of documentation could move an organisation up the range, whilst evidence of good health and safety practices and procedures might shift the fine down the range. From the table above it can be seen that for the same accident the fine for a large organisation could range from £240,000 to £10 million, depending on the evidence of culpability and mitigating / aggravating factors, whilst for a small organisation the fine could range from £18,000 to £450,000. Where culpability is very high, a fine could represent several years’ profit.
We all hope there won’t be an accident in our workplace, but if the worst happens it is well to be armed with the evidence that can demonstrate low culpability, well-managed risks and monitored processes in place.
Many organisations have separate risk assessments and training records, whether on paper or in spreadsheets or documents. This makes the process of checking that training in hazard controls has been provided and refreshed at a suitable interval both time-consuming and prone to error. Effective Software have expedited this window of error by keeping all your records in one place through our risk assessment software module and training management software module.
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