Stormy Weather Ahead
As from 1 February 2016 the new sentencing guidelines for health and safety take effect. These require a step-by-step assessment based on the degree of culpability, the level of harm or potential harm caused by the offence, and the size of the defendant organisation by reference to its turnover. There are four categories of organisation: micro (under £2m turnover); small (£2m-£10m); medium (£10m-£50m); and large (£50m plus).
However in January it appears that some judges thought the guidelines were already in place.
C Ro Ports London Limited was fined a whopping 1.8m for a breach of section 2 of the Health and Safety at Work etc Act 1974 for failing to ensure the health and safety of its employees. It was not a case that had resulted in a fatality. The company’s published accounts for 2014 shows it had a turnover of £25m.
The prosecution followed an accident to a worker who was one of a three man team securing a ship’s mooring rope at the Port of Purfleet in Essex. The fingers of his left hand became caught between the rotating drum of a powered capstan and a heaving line. The worker sustained multiple fractures to his hand.
The Company pleaded guilty to the offence. Given that a discount is usually given on the sentence to recognise the plea of guilty (a third if at the earliest opportunity), this fine on a full liability equates to around 10% of annual turnover.
And this is not an isolated example. National Grid Gas Plc was fined £1m for health and safety failings when a worker was trapped between two gas pipes after one of them burst and UK Power Networks (Operations) Limited was fined the same amount following a runner being electrocuted when he came into contact with a cable which should have been 5.5 metres from the ground.
These fines mark a sea change in the approach to sentencing.
The way many organisations and their senior management respond to a criminal investigation will need to change because the stakes are now much higher. Tactical decisions taken early on may have a significant impact upon the eventual outcome. For example consideration will need to be given to challenging improvement and prohibition notices if served as well as challenging notifications of contravention issued by HSE under its Fee for Intervention scheme.
Obtaining the right specialist legal advice is key. While insurers may seek to appoint a lawyer of its choosing companies should remember that under regulation 6(1) of the Insurance Companies (Legal Expenses Insurance) Regulations 1990 it has a right to be represented by a lawyer of its own choice, irrespective of the policy wording.