The Health and Safety (Offences) Act 2008 (the Act) received Royal Assent on 16 October 2008, and is due to come into force this Friday, 16 January 2009. The statute, long-awaited by the HSE and lobbyists alike, seeks to broaden the penalties available to the Court when sentencing health and safety offences, by providing for increased fines and introducing imprisonment as a sanction. This latter provision of the Act is likely to attract much attention when it comes into force. Whilst lobbyists and members of the public might welcome the new sanction as a way of holding directors and senior managers accountable, in practice this sits uncomfortably with the recent introduction of the Corporate Manslaughter and Corporate Homicide Act 2007 (the Corporate Manslaughter Act), which, conversely, chose not to create a separate offence that could be committed by directors and managers.
As of 16 January 2009, defendants (corporates and individuals) who find themselves in the Magistrates’ Court on charges under any of the suite of health and safety regulations could face a maximum fine of £20,000 per offence, as opposed to £5,000 per offence as the law currently stands. This brings the maximum fine for regulation offences (such as under the Provision and Use of Work Equipment Regulations 1999) in line with that available for breach of the general duties (e.g. failure to ensure the health and safety at work of employees / non-employees under sections 2 and 3 Health and Safety at Work etc. Act 1974 (HSWA)). Fines imposed in the Crown Court remain unlimited. This change has a dual-purpose: not only does the increased sanction seek to encourage dutyholders to take their responsibilities more seriously, but it is hoped that this will lead to more cases being disposed of in the Magistrates’ Court. Historically, magistrates have declined jurisdiction for dealing with health and safety matters on the basis that their sentencing powers are insufficient to dispose of cases justly. Thus, when presented with a serious but non-fatal case involving perhaps two charges under the regulations and one under the general duties, for example, magistrates have been tied to a maximum possible fine of £30,000 (£5,000 per offence under the regulations, plus £20,000 for the general duty). When the Act comes into force, this will increase to £60,000 (£20,000 per offence), thus giving the magistrates greater sentencing powers and increasing the likelihood that they will reserve matters to the lower courts. The intention is that this will ensure that cases are dealt with more quickly, more effectively and at a lower cost for all parties involved.
The more eye-catching change, however, is the ability for courts to imprison individuals for health and safety offences – even in non-fatal cases. As the law currently stands, individuals may only be imprisoned if found guilty of gross negligence manslaughter under existing criminal law, or where they have contravened a prohibition / improvement notice or court order. Presently directors or senior managers who are found guilty of health and safety offences by virtue of Section 37 HSWA (i.e. where the company has committed an offence with their consent or connivance, or where this is attributable to their neglect) cannot be imprisoned. As of 16 January 2009, however, this is a very real possibility. The duties under HSWA and the operation of section 37 will not in themselves change; therefore all that the Prosecution will need to prove is that the individual is responsible for the offence committed by the company. Employees who are found guilty of an offence under Section 7 HSWA (the employee’s duty to carry out their work safely) will also be at risk of imprisonment.
What to expect and how to react
Given the new imprisonment sanctions for individuals, it follows that health and safety investigations will now involve greater scrutiny of the management chain, and of the roles and duties of those in a position of responsibility. Of course this has already begun in the light of the Corporate Manslaughter Act, prosecution under which relies upon identifying a gross breach of a relevant duty of care by senior management, which leads to death in the workplace. Nevertheless, the members of the “senior management” found responsible for committing an offence of corporate manslaughter will not, as it currently stands, face imprisonment (only the company will). This is a fact that has been widely criticised since that legislation came into force in April 2008 and, whilst the new imprisonment provisions under the Act therefore seem juxtaposed to the Corporate Manslaughter Act, many view this as an intentional move by the Government to “fill the gap”, by providing prosecutors with an alternative method of prosecution that does allow for imprisonment.
The upping of the sentencing ante is not confined to the Act. In November 2007 the Sentencing Advisory Panel (SAP) published a consultation paper on sentencing for both corporate manslaughter and fatal HSWA offences, recommending that fines levied against corporate entities for such offences should be related to turnover – between 2.5% and 10% for corporate manslaughter, and between 1.5% and 7.5% for breaches of HSWA where death occurs as a result. This is in contrast to the current law, which merely provides for an unlimited fine upon indictment in the Crown Court, and with guidelines for sentencing deriving from the principles set out in case law. The consultation has now closed, although we still await publication of the final guidelines from the SAP, which are expected in the spring. If the proposed guidelines are adopted, however, then corporate defendants will see themselves exposed to far greater liability in the wake of a health and safety incident, particularly in the case of a fatality. The only protection in such circumstances is to ensure that health and safety management systems are fully compliant with applicable legislation, and that all employees are suitably trained and instructed both in their individual responsibilities and in the appropriate policies and procedures to be adopted in the workplace. Perhaps more importantly, supervision and management of compliance with procedures is key, as members of the management chain will now be exposed to greater scrutiny and face more serious consequences if found liable. Companies should therefore ensure that they have in place an efficient and credible system for auditing compliance, as well as for auditing supervision itself.
The implementation of the Act and the likely introduction of the SAP recommendations are further steps in the Government seeking to link health and safety liability to management accountability, from board level downwards. Organisations must therefore take heed and put health and safety at the top of the agenda. The HSE and Institute of Directors have published guidance on how to do this, entitled “INDG417: Leading Health and Safety at Work”. In light of the Act and the financial impact of increased fines, this will make crucial boardroom reading.