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Keoghs Insight

We keep you up-to-date on emerging market issues and their impact on the insurance sector, through a variety of publications, events and our leading market initiatives.

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Richard Ollier

Richard Ollier

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T: 01204 672240

Recent figures illustrate real impact of health and safety sentencing guidelines

Blogs||17/08/2017

Since the introduction of the new sentencing guidelines for health and safety offences there has been a steep increase in the level of fines imposed by the courts on those who breach the law, with larger organisations feeling the real force of the changes.       

Research* has shown that overall fines collected from business has more than doubled since the guidelines came into force on 1 February 2016, with a huge rise to £76.7million from the relatively meagre £36.2 million in the year preceding its introduction.  

Forming a large part of the upward trend were nineteen companies who received fines of £1 million or more, the highest of which (£5 million) was handed down to Merlin Attractions following the incident at Alton Towers. Other notable fines included Network Rail’s £4 million punishment in respect of a fatal accident at a level crossing in Suffolk and Balfour Beatty’s £2.6 million fine following a fatal trench collapse in Lancashire. These penalties are in stark contrast to the previous two years when only three fines over £1 million were handed down in 2015 and none in 2014.

A key factor influencing the headline numbers is the fact that large fines, including those over £1 million, are no longer reserved for cases involving a fatality, with the new guidelines considering the risk of harm created by the offence and not the actual harm suffered by those affected. A good example of the effect this change has had on such cases is the high profile incident involving Foodles Production Limited, where a fine of £1.6 million was handed down following an accident during the filming of Star Wars: The Force Awakens, when Harrison Ford suffered a fracture to his left ankle. There was also the case of ConocoPhillips (UK), which was fined £3 million following a gas leak where no one was actually injured. Likewise, there were no fatalities in the Alton Towers incident which attracted the largest fine imposed to date.  

The new guidelines have not only increased the level of fine imposed on the country’s largest organisations convicted of committing the most serious offences, but have also had a significant impact on other offenders with organisations of all sizes feeling the full effect. In the six month period between April and September 2016 the courts imposed 62 fines exceeding £100,000 against corporate offenders for work-related health and safety offences and this trend is expected to continue. The latest research suggests that the average fine for a health and safety offence has trebled to just over £280,000.    

The new sentencing guidelines have also resulted in a sharp increase in the number of custodial sentences imposed on individuals convicted of health and safety offences. Whilst it has always been open to the court to impose a custodial sentence, this provision has been used sparingly in the past.  In the 42 years between the introduction of the Health and Safety at Work Act 1974 and the new sentencing guidelines, 190 people received custodial sentences. In the period between February and September 2016, 23 people received custodial sentences, albeit a large number of these were suspended. This represents an annual tenfold increase which, if continued, would see a huge jump in the average number of custodial sentences, shooting up from 4.5 to 45 a year.

It is expected that the current trend of increased sentences for both corporate and individual offenders will continue under the new guidelines with harsh lessons being learnt by those who fail to get things right.  To date, all but one organisation convicted of corporate manslaughter has been either a micro, small or medium sized business with all fines imposed reflecting the limited financial means of those convicted. The largest fine following conviction for corporate manslaughter so far has been £1.2 million. It is anticipated, however, that the full weight of the new sentencing guidelines will be exercised when the first large or very large organisation with substantial means is convicted of corporate manslaughter. At that point we can expect to see a fine of up to £20 million.     

For organisations further down the scale however, these figures still provide a timely reminder, if one were needed, that Health and Safety should be at the forefront of all business’ considerations – a message which the sentencing guidelines are hammering home with increasing regularity.

*https://www.thetimes.co.uk/article/employers-fined-76m-over-health-and-safety-0j65ttjbd