It was always apparent that the 2016 Definitive Guideline for sentencing in health and safety (and corporate manslaughter) cases would have a dramatic upward effect on the level of fines imposed by the courts. Recent cases have not only cemented that view, but also have shown that the Crown Court will not shy away from very large fines in appropriate cases.
The message is clear, large organisations, with significant financial resource, will face ever increasing fines in order that there is a real economic impact to the business, which will bring home to the management and shareholders the need to be compliant. The courts will expect all organisations to have committed from the senior management downwards, to reducing risk within the business. It is increasingly important therefore that businesses are able to show that they have robust, practical, systems in place which are properly invested and demonstrably fit for the purpose for which they were designed. SMEs will also face proportionately larger fines.
As these guidelines cover breaches of regulations as well as the general duty offences, they mean that even in cases concerning a breach of regulation, which did not result in an injury, the fines could be measured in hundreds of thousands.
We are now ten months or so on from the implementation of the guideline; with the cases that have come through the courts it is also becoming clearer to understand how the Judges are interpreting the guidelines and determining issues such as harm and culpability. They are not only looking at obvious factors that would tend to push up the starting point for the fine, but when turning to factors that might mitigate the penalty, also probing the overall attitude of the business, particularly in how it responded to the particular incident.
Two recent cases attracting the highest fines yet were Network Rail and Merlin Attractions Operations Ltd. In the latter case the court identified that many thousands of people had been exposed to risk over a number of years; that finding (amongst others) allowed the Judge to move substantially up the category range, which in the case of Merlin was £1.5m - £6m. The Judge rejected the defendant company’s submissions on the likelihood of identified harm actually arising and passed a sentence of a £5m fine. Network Rail was fined £4m following yet another death on a rural non-automated level crossing. The Judge refused to accept that he should downwardly adjust the fine given that they are a public body and as such their service delivery could be adversely affected by a multi-million pound fine.
Recent figures from the HSE also show that individual Directors are now at a far higher risk of prosecution than ever before. The 46 prosecuted in 2015/2016 represented a threefold increase on the preceding period; approximately one third of those convicted received a prison sentence and in the case of three Directors that prison sentence was immediate, not suspended.
Businesses need to be proactive now, probably more than ever, to implement the systems that drive down risk to an acceptable level.