Regulatory Outlook: Health and Safety - November 2016

Current Issues

Sentencing Guidelines for health and safety and corporate manslaughter cases: We are seeing a very significant impact on businesses with turnovers exceeding £50m following the introduction of a tariff-based penalty system in February 2016.

Alton Towers received the largest fine of 2016, of £5m (reduced from £7.5m for an early guilty plea). We are yet to see the successful prosecution or penalty of a large business for a corporate manslaughter offence, where the guidelines allow for even greater fines.

The impact of Brexit on health and safety legislation: We do not expect Brexit to have a significant impact on legislation in the health and safety arena, although we await to see whether unpopular and prescriptive regulation brought in through European directives, including the Construction (Design and Management) Regulations 2015, change in any way as a result.

A regulatory focus on health and wellbeing: The Health and Safety Executive has put health on its business plan for 2016/2017 and plans to publish a work-related ill health strategy. Professional bodies such as the Institute of Occupational Safety and Health also have the issue on their agenda and the government is increasingly focusing on mental health as well as physical health challenges and looking to find solutions to problems (and cost) in the NHS.

The UK exports its health and safety regulation model abroad: The UK’s Health and Safety Executive is successfully ‘selling’ its regulatory model and specialist experience, as a result of the positive impact on safety statistics, to other jurisdictions. Examples of this include Singapore, with other countries, such as the UAE and New Zealand, also looking closely at how health and safety is regulated in the UK.

In Focus: Enforcement

A breach of health and safety legislation in the UK can lead to criminal enforcement action being taken against a corporate entity or an individual, by the Health and Safety Executive (HSE), local authorities, or (in the most serious fatality cases) the police and Crown Prosecution Service. Civil claims for personal injury can also be brought by private individuals.

In 2007, the UK introduced a new statutory corporate manslaughter offence to seek to overcome the challenges of the common law manslaughter provisions, where a ‘controlling mind’ of a company needed to be identified for a successful prosecution.

In addition to the ‘worst case’ scenario for a business (or individual) of a criminal prosecution, other potential enforcement action includes enforcement notices (improvement or prohibition) and advice or warning letters.

The HSE also has the power to recover its fees for investigating and advising a business when a ‘material breach’ of health and safety law has been found, under the Fee for Intervention scheme.

New sentencing guidelines

Historically there has been very limited guidance for the courts to steer them on appropriate penalties in health and safety or corporate manslaughter cases. This resulted in inconsistency in fines being imposed and fines were generally felt to have limited impact on large businesses.

The introduction of new sentencing guidelines for the courts (applicable to all health and safety and corporate manslaughter cases) in February 2016 has dramatically changed the position. Cases heard since February have led to fines which fit consistently into the brackets set out in this new tariff-style guidance, resulting in multi-million pound fines for companies fitting into the ‘large’ (in excess of £50m turnover) category.

As a result of increasing enforcement in the health and safety arena, and the impact of the new sentencing guidelines, we are seeing businesses’ boards and investors increasingly focusing on whether good health and safety management systems are in place and stress-testing them.

Additional concerns about individual prosecutions under health and safety legislation (we have seen 19 this year) mean that company directors are identifying greater accountability and risk in this arena and seeking specialist support.

For more information and details of all of the other areas covered by the Regulatory Outlook click here.