Multi-national organisations now have two more reasons to ensure the health and safety of their workers and those members of the public or third parties who may come into contact with their work activities. In the chemicals sector, where many organisations are truly global with sites in different countries interacting with each all over the world, organisations cannot be complacent or ignorant about health and safety risks or incidents, even if these occur outside of the UK, and even if they are committed by their associated or subsidiary companies who may be based outside of the UK.

While there is no international law of health and safety that an organisation can be investigated and prosecuted under, recent UK case law has indicated that the acts of UK companies committed outside of the UK can be relevant for the purposes of sentencing successful health and safety prosecutions in the UK. Furthermore, recent proposals for new sentencing guidelines for health and safety and corporate manslaughter offences have specifically referred to scenarios where a UK company is being sentenced but “the accounts of a linked organisation are available and can properly be taken into account.” [Sentencing Council: Health and Safety offences, corporate manslaughter and food safety and hygiene offences guidelines Consultation – November 2014]. The implication behind this is that global, worldwide accounts may be taken into account in future when considering the correct sentence of a UK branch of a company.

Considering relevant UK case law first, the Court of Appeal decision in Bodycote (a multi-national group with 11 sites (only 3 of which are in the UK)) highlights the need for organisations with both UK and overseas operations to share and adopt in the UK lessons learned from their global operations, even if where separate legal entities are involved. The basic facts of the case are that Bodycote had an incident at its California site which led to the deaths of two of its employees. Three years later, a similar incident happened at the UK Bodycote site which resulted in the death of two employees. When sentencing Bodycote in the UK for the second incident, it was found to be a “serious aggravating feature” that very similar scenarios had led to both tragedies. The sentencing judge stated that the UK had not adequately heeded the warnings from the failures in California.  As a result of an early guilty plea, the fine was reduced by one third to £533,000, a sum that was upheld by the Court of Appeal.

Secondly, the recent Sentencing Council Consultation on the proposed sentencing guidelines for health and safety and corporate manslaughter offences (published on 13 November 2014) clearly support a massive increase in the level of fines for these offences. In many ways, the proposed guidelines echo the sentencing guidelines for Environmental offences which came into force earlier in 2014. They also follow recent Court of Appeal decisions which have called for much greater scrutiny of the accounts of large organisations when they are sentenced for health and safety and corporate manslaughter offences. This is to ensure that the fine is large enough to make the shareholders or directors of an organisation take notice and feel a great enough impact from the fine so as to cause them (and others responsible for the running of the company) to take steps to prevent future health and safety incidents from occurring.

The ‘suggested’ fines in the proposed guidelines are much larger than anything envisaged previously and to give a flavour, for a ‘large’ organisation (with a turnover above £50 million), the starting point for a very serious health and safety offence is listed as £4 million, with a range between £2.6 million and £10 million.  An offence with ‘medium’ culpability and a ‘low’ level of harm should expect a starting point fine of £130,000, with a range between £50,000 and £350,000.

For ‘very large’ organisations (with a turnover which “very greatly exceeds” £50 million), this should be expected to increase significantly. For the majority of multi-national organisations their turnover will exceed £50 million and, as stated above, a Court under the proposed guidelines may be allowed to consider the wider company group accounts (e.g. those of an associated subsidiary company outside of the UK) when considering what the correct fine should be to try and ensure that the fine makes an impact on those managing and owning the business.  We have already seen prosecutors trying to take the Court down this line: even though we have succeeded in dissuading the Courts from taking this approach, to an extent the damage is already done as the finances of the full global organisation will have come to the attention of the sentencing judge while submissions are being made.

The consultation is ongoing until 18 February 2015, but the guidelines will be implemented in some form.  The principles behind the guidelines have already been discussed and used in UK sentencing courts for some time. Therefore, many predict that the guidelines will not be changed drastically, and we will likely see much higher fines being imposed by the Courts.

In the chemicals sector, health and safety has to be paramount due to the potentially dangerous substances and processes that workers in this sector have to interact with. Therefore, incidents and risks of incidents will occur, and UK chemicals companies who carry out part of their undertakings abroad (either directly themselves or through an associated or subsidiary company) need to have knowledge and awareness of any health and safety incidents or risks that have happened outside of the UK and make sure that these (and wider knowledge across the chemicals sector) are shared and implemented.