Health and Safety guidelines, what are the 2016 changes?

2016 changes and their implications

The 1st February 2016 marked a change in the sentencing guidelines for health and safety. Courts have now been directed to consider the sentencing of offending organisations through a step-by-step approach inspecting primarily:

  • Culpability
  • The seriousness of harm risked
  • The liklihood of harm

The guidelines require an assessment of the organisations turnover as a starting point for a fine. This is intended to make shareholders and directors acutely aware of the seriousness of health and safety. The guidelines also highlight steps and factors for the courts to review when determining the fine.

The health and safety industry is anticipating a radical impact on the levels of fines imposed. Businesses are still coming to terms with the new changes, and although the influence the guidelines have had on the courts to date is limited it is important to consider how they will continue to affect sentencing in the future.

Considerations for organisations

Achieving high standards of compliance with health and safety regulations has never been more important for organisations. The most decisive factor in determining the level of fine to be imposed on a defendant remains the level of culpability. The largest fines will be allocated to organisations that fall far short of the appropriate standards, have blatantly disregarded the law, or have purposely breached health and safety. Organisations therefore need to invest in strong safety management systems which are correctly implemented.

The changes to the guidelines where a company’s turnover is considered, means fines for larger companies will rise significantly. The debate over which accounts are to be considered by the court will have an impact on sentencing, especially when cases involve groups of companies or joint ventures.

The guidelines in reality

The very first conviction under the new guidelines was ConocoPhillips (UK) Limited, with a turnover of £4.8billion, in February 2016. The company pleaded guilty to three breaches of health and safety regulations following a series of uncontrolled and unexpected gas releases at an offshore installation.

Workers were sent to investigate the incident despite gas still being present at the site due to breakdown in communications. Although nobody was actually injured, the risk of death or serious injury was deemed to have been extremely high had there been a gas ignition. This is regarded as a Harm Category 1 because of the seriousness of the harm risked and the high likelihood of harm.

The court noted a failure to accurately identify and control risks, despite the company having safeguards and procedures in place. The culpability level in this case may have been classed as ’medium’ as the systems in place were not sufficiently adhered to or implemented.

According to a leading health and safety independent news practitioner’s analysis, the starting point for the fine would be £1.3 million, and to accommodate mitigating or aggravating factors a further range of £800,000 to £3.2 million. The organisation highlighted its high level of cooperation with the Health and Safety Executive as well as investment in new systems to prevent recurrence as mitigation. It is worth noting that despite the billion pounds turnover figures the company made a pre-tax loss of £85 million. The fine actually sanctioned by the court was £1 million for each offence, a £3 million overall fine.

Fine example pre new guidelines

The prescriptive and uniform approach to be adopted by courts with the introduction of the new guidelines is illustrated by a number of cases that were heard weeks before the changes came into effect. With the 2016 guidelines for health and safety in mind, four Crown Courts sanctioned fines of £1 million or more to large companies which all submitted early guilty pleas:

Corporate offender Date of sentence Harm caused Approx turnover Level of fine imposed
C.RO Ports London 21 January Arm injury £25m £1.8m
Balfour Beatty Civil Engineering 25 January Fatality £8.8bn (Group turnover) £1m
National Grid Gas 25 January Broken leg £3bn £1m
UK Power Networks (Operations) 26 January Fatality £1bn £1m

The cases highlight the radical change the health and safety industry now face as a result of these sentencing guidelines. Previously, a breach of health and safety that did not result in injury may have only attracted a fine of tens of thousands, whereas now that figure rises considerably to as much as millions. The guidelines focus on “risk of harm” as opposed to actual harm will likely result in more organisations falling into a higher category of offence. These hypothetical risks are expected to become a contested point at trial and could potentially lead to prolonged sentencing hearings involving expert evidence.

What to expect in the future?

All health and safety industry eyes will be on the courts as there is no limit on fines for offences committed by large and very large organisations could be. For those found guilty of serious breaches and deemed to be highly culpable the prospect is frightening. It is still uncertain whether the risk of such a financial hit will prompt organisations to focus on health and safety and help reduce the number of injuries or fatalities. The potential imprisonment of senior managers and directors that fall far short of standards should act as an incentive to address health and safety concern and ensure compliance with the law at all times.

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