Fines for H&S offences
31 March 2020
Since 1 February 2016, new sentencing guidelines for health and safety offences now apply to all cases coming before the Courts. Previous limits on the fines that Magistrates' Courts can impose have been swept aside with all Courts now being directed to consider a number of key factors before imposing the fine.
The sentencing of organisations and individual's for breaches of H&S laws is now a step-by-step approach, primarily examining culpability, the seriousness of harm posed risked and the likelihood of harm as well company turnover. For individuals charged personally, ability to pay is taken into consideration.
Commenting on the changes, now with almost 4 years of cases to review, Rob Castledine, Director of Three Spires Safety says "This is having a major impact on the level of fines being imposed. For the first 12 month period, we saw total fines tripling in value with four cases resulting in fines over £3m. The £5m fine for Merlin Entertainments, following the serious incident at Alton Towers is a starting point that large organisations need to be fully aware of. Wilkos, the high street retailer was also fined £2.2m, after a student working in one of their stores was badly injured after a roll cage fell onto her. Even Jaguar Land Rover have fallen foul of the courts, receiving a massive £900k fine after a worker lost a leg after being hit by a vehicle at the main Solihull plant."
Fine levels are now directly linked to turnover with various tables published for the Courts to follow when deciding on the level of fine. These tables categorize a company's turnover into 4 levels, only going up to large organisations with turnovers of up to £50m. Courts are being advised that for companies with a turnover of greater than £50m, then they can step outside of the guidelines.
"Clearly...." says Rob ".... they will be going upwards in terms of the fines for bigger organisations and not downwards."
Whilst a positive step in trying to standardise the approach that Courts take in deciding on the level of the fine, it is resulting much bigger penalties. Rob continues "I've been having some interesting conversations with clients and colleagues around company structures and financial resources in each part of the business. Potentially, for a large complex business that has one division with a low turnover in terms of the overall Group P&L, this one small part of the business, if they experience a serious accident, could result in the wider group being fined based on total turnover rather than turnover or profit of the operating business. It's really causing some Company Executives and Directors to seriously consider their company structures and the legal entities that exist."
Watch this space as there will be many more significant fines coming ......