New Sentencing Guidelines – Health & Safety Offences

20th June 2016

The Sentencing Guidelines have now been live in England and Wales since February 1st, 2016. Have you discussed them as an Executive Group or Board, has your Health & Safety or Legal team raised them with you?

Hopefully someone within your organisation has highlighted some of the cases to date eg. the £2.6 million fine for Balfour Beatty, where a worker was killed when a trench collapsed.

There is also Merlin Entertainment’s early guilty plea on Health & Safety failures relating to the “Smiler” ride tragedy. This is the case where we initially heard the tragedy was simply down to human error by those most closely associated with the operation of the ride. It will be interesting to see if this case proves that the management team are, in fact, human and, therefore, do make errors.

Tough punishments for Health & Safety Offences

These are just two examples where companies and, increasingly individuals, are receiving much tougher sentences for Health & Safety offences. For individuals the threshold, before the possibility of a custodial sentence, has reduced and is a very real possibility.

A lot of the headlines have been about the potential for massive fines, up to £20 million in certain circumstances. Less airtime has been devoted to the general principles that sit behind setting a fine. These include that…

• The fine must reflect the seriousness of the offence.
• The fine should meet, in a fair and proportionate way, the objectives of punishment, deterrence and the removal of gain derived through the commission of the offence.
• It should not be cheaper to offend than to take the appropriate precautions.
• The fine must 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.
• It is worth drawing out here that where a significant incident has occurred, or could have occurred, the fine will have a major impact on your financial performance. A fine of several million pounds could wipe out all of your profits, prevent a dividend being paid or an investment being made that is crucial for the business.

Your employment as a senior executive should be challenged if you cannot effectively manage the Health & Safety business risks alongside the commercial ones.

One key point is that the guidelines are very clear that actual loss does not need to occur and that the offence is in creating the risk and not the actual harm. So the custodial sentences and fines are possible even without significant actual loss occurring.

Take steps to fully integrate Health & Safety into your business

Recognising that this significant change in sentencing has taken place, what have you done differently since February 1st? Has the introduction of the Sentencing Guidelines prompted you to change how things are undertaken in your business?

If, as a Leadership group, you have acknowledged your accountability to identify the significant risks within your business, this is a strong starting point. For each significant risk topic, a suite of controls should be implemented and monitored for effectiveness. Fines and custodial sentences only become relevant where the risk controls that we identify and maintain are not adequate or not implemented and monitored effectively.

For an Executive or Board level group it should feel very comfortable to ask the questions “what are our key risks and are we monitoring their successful mitigation”? This already feels comfortable and normal for financial and commercial risks. We need to move to the same place for the full complement of business risks, of which Health & Safety is one.

The reality is that what’s required to manage H&S risks has not changed at all. However the impact, if you create the potential to kill or seriously injure someone, has changed beyond recognition. The scale of fine and/or custodial sentence could ultimately put you out of business, a possibility not ruled out by the guidelines.

Finally keep in mind the that law is the minimum level of expectations that was agreed by all parties, e.g employers, trade unions, government, etc. Put aside the myths of gold-plating and red tape and recognise that planning to just get over the mystical line of legal compliance may not be the best Risk Management approach for your business.

The second part of this blog will address the practical steps to effectively manage risk and avoid allowing significant risk to go uncontrolled in your business.

The new sentencing guidelines can be found here: /https://www.sentencingcouncil.org.uk/wp-content/uploads/HS-offences-definitive-guideline-FINAL-web1.pdf