1. CONSTRUCTION HEALTH AND SAFETY GROUP Legal Update Presentation by Kizzy Augustin, Senior Associate Pinsent Masons LLP 25 November 2015

2. The Agenda Workplace Accidents: Corporate and Personal Liability Tough on H&S Crime: Changes to Sentencing Corporate Manslaughter: An Update New legislation: –Self employed exemption –Working Time directive –SARAH 2015 CDM 2015 – a practical view (from Client / PC / PD)?

3. Workplace Accidents: Corporate Liability

4. Corporate H&S Duties Duty to “ensure” the health safety and welfare of employees Duty to “ensure” the health and safety of non-employees “So far as is reasonably practicable” Section 2 Duty to employees Duty to non- employees Section 3

5. Enforcement NOTICES: –Improvement or Prohibition PROSECUTION: –Fines: Sentencing Guidelines Council – guidelines came into force in February 2010 but are set to change in 2016 HSWA offence causing death – seldom less than £100,000 and may be measured in hundreds of thousands of pounds or more Must be large enough to reflect the culpability of the company and affect the attention of its shareholders Magistrates’ or Crown courts –Magistrates’ – was maximum of £20,000 until March 2015 –Crown – unlimited (expect £300K+ for single fatality)

6. Workplace Accidents: Personal Liability

7. Manslaughter by Gross Negligence Elements of offence: –Duty of Care –Gross Breach –Causation – gross breach was a significant cause of death

8. Manslaughter by gross negligence R v Adomako [1994]: HL set out test for gross negligence manslaughter Jury need to consider whether… “the extent to which the defendant’s conduct departed from the proper standard of care incumbent upon him… was such that it should be judged criminal”

9. Individual’s H&S Duties Duty to take reasonable care of self and others affected by work (s.7) Where an offence… has been committed with the consent, connivance, or…attributable to any neglect on the part of any director, manager… or a person who purports to act in that capacity, he/she as well as the company shall be guilty of that offence (s.37) Duty of employees Section 7 Section 37 Liability of directors and senior managers

10. Individual’s H&S Duties Consent – have knowledge and endorse / direct it Connivance – have knowledge and ignore it Neglect – should have been aware (even if they are not) and taken action

11. Enforcement Fines / Penalties: –Section 7: Magistrates – unlimited (since March 2015) Crown – unlimited Imprisonment – up to 2 years –Section 37: Magistrates – unlimited (since March 2015) Crown – unlimited (typically £50k to £100k) Imprisonment – up to 2 years Director’s disqualification for up to 15 years (typically 5 years) –Manslaughter by Gross Negligence: Maximum – Life Imprisonment

12. Risk of imprisonment? R v Sidebottom & Golding (2014): Ground worker died during the completion of a basement construction project at a domestic premises in London Works included engineering process of “underpinning” 4 year investigation and 3 ½ week trial in the Crown Court Site Manager (employed by the Subcontractor) convicted of gross negligence manslaughter Health & Safety Advisor, engaged to provide H&S services to the site convicted of breaching Section 7 of the Health and Safety at Work etc. Act 1974

13. Risk of imprisonment? Failings of the H&S Advisor: Inadequately prepared method statement Inadequate performance of site inspections – prescribed method did not resemble realities on site Asked no questions as to temporary works – principally in relation to the propping and shoring of open excavations Did not intervene to prevent unsafe working practices

14. Risk of imprisonment? A Landmark Sentence… H&S Advisor sentenced to 9 months in prison First time an immediate custodial term imposed for a breach of Section 7 of the HSWA, in preference to the sentence being suspended Site Manager sentenced to 3 years and 3 months in prison

15. Tough on H&S Crime: Changes to Sentencing

16. New Sentencing Guidelines  Sentencing Council consultation on draft guidelines for health and safety offences, corporate manslaughter, food safety and hygiene offences  Consultation began on 13 November 2014 and ended on 18 February 2015  Definitive guidelines published in November 2015, with implementation expected for Feb 2016

17. New Sentencing Guidelines  Firstly, determine Culpability – 4 Categories:  Very high – deliberate or flagrant breach  High “fell far short of the appropriate standard”, “evidence of serious systemic failings …”  Medium – fell short, but between High and Low categories  Low – “did not fall far short of the appropriate standard”, “evidence that failings were minor and not systemic”

18. New Sentencing Guidelines  Then determine the Harm – 4 Categories based on seriousness and likelihood:

19. New Sentencing Guidelines  Then decide the Organisation Category based on TURNOVER:  Very large organisations: “turnover … greatly exceeds £50m”  Large (>£50m t/o)  Medium (£10-£50m t/o)  Small (£2-£10m t/o)  Micro (<£2m t/o)

20. What may the fines look like?  EXAMPLE: Large Company (£50million + turnover):  Very High Culpability / Harm =  Starting point £4m (range £2.6m to £10m)  Low Culpability / Harm =  Starting point £130K (range £50k to £350K)  Corporate Manslaughter =  Starting point £7.5m (range £4.8m to £20m)  NB – there are also sentencing guidelines for individuals with custody thresholds set at “neglect” (e.g.very high culpability / harm = Starting point 18 mths custody)

21. The Headlines Fatal health and safety offences committed by ‘Large Companies’ (£50million + turnover) could carry fines of up to £10million!! ‘Large Companies’ if found guilty of CM could face fines of up to £20million!!

22. What does this mean? Fines for large/very large companies are going to be substantially increased The extent to which processes were in place/isolated lapse may become a litigation battleground Establishing whether culpability was “low” will be very important in setting fines Even more important to show existing procedures are in place/what does industry do? Very large companies may fall outside the ranges in the Guidelines and “all bets are off”

23. Corporate Manslaughter: An Update

24. Corporate Manslaughter and Corporate Homicide Act 2007  Introduced “new” manslaughter offence for organisations  In force – 6 April 2008 (now 7 years old!)  15 convictions to date (4 trials; 11 guilty pleas)  3 acquittals  4 further charges outstanding:  Baldwins Crane Hire Limited  Sherwood Rise Limited  McGoldrick Enterprises Limited (NI)  Maidstone and Tunbridge Wells NHS Trust  Differing jurisdictional appetite? 17 cases in E&W; 5 in NI; and 0 in Scotland

25. Corporate Manslaughter – ongoing cases....  Baldwins Crane Hire Ltd: employee of Baldwins was killed when a heavy crane he was driving allegedly experienced a malfunction with its brakes, causing it to crash into an earth bank and fall from the road.  McGoldrick Enterprises Limited (NI): a patient died suddenly at a private nursing home. McGoldrick was charged with corporate manslaughter, in that it managed or organised activities in a way that amounted to a gross breach of a duty of care owed to the deceased.  Sherwood Rise Limited: An elderly woman died shortly after being moved from Autumn Grange Care Home in Sherwood Rise, Nottingham. Alleged that the care home staff failed to provide the deceased with adequate food and drinks and check she was taking fluids.  Maidstone and Tunbridge Wells NHS Trust: 2 doctors charged with gross negligence manslaughter and NHS Trust charged with Corporate Manslaughter over the death of a woman who died after giving birth by emergency caesarean section in 2012.

26. Fines For Corporate Manslaughter

27. Reputational Damage Publicity Order = Discretionary power given to the Court under Section 10 of the 2007 Act If ordered, the company must publish details of: –Conviction –Particulars of the offence –Level of fine –Any remedial order made Used in three recent convictions: –Princes Sporting Club Limited = details published in a powerboat magazine –Mobile Sweepers (Reading) Limited = details published in two local newspapers –Peter Mawson Limited = details published in local paper and on the company’s website

28. Self-Employed Workers  From 1 st October 2015, if a person is self- employed and their work activity poses no potential risk to the health and safety of other workers or members of the public, then health and safety law will not apply to them.  Estimate 1.7 million self-employed people affected.  The Health and Safety at Work etc. Act 1974 (General Duties of Self-Employed Persons) (Prescribed Undertakings) Regulations 2015

29. Self-Employed Workers  Health and safety law applies:  If the work activity is specifically mentioned in the Regulations above (e.g. construction, asbestos, agriculture, gas, GMO’s, railways etc.); or  The work activity poses a risk to the health and safety of others.  All other self-employed people are now exempt from health and safety laws.  Novelists, journalists, graphic designers, accountants, financial advisors and dress- makers etc.  Self-employed?

30. Working Time Directive – travel time  Time spent travelling to the first job of the day counts as “work” – ruled by the European Court of Justice.  Counts towards the 48 hour working week.  Under UK government guidelines, time spent travelling at work already counts towards the 48 hour target. Normal travel to and from work did not........until now!  TYCO case:  Spanish company that installs burglar alarms  Workers drove for up to three hours to clients’ premises and the company counted their working day from the moment they arrived at the first client to the time they left the last one.  Court ruled that this was wrong and travel time counts as “work” for employees such as tradesmen who do not have a fixed office.

31.  Will have implications for employers with mobile or peripatetic workforces  This legislation does not govern pay - concerned with the organisation of working time including average weekly working time, rest periods and rest breaks and minimum periods of paid holiday.  General position is that travel time between home and a place of work is excluded from the obligation to pay the national minimum wage, including for mobile workers.  Employers may need to adjust working hours for employees or ask employees to opt out of 48 hour working week – or risk them exceeding their legal amount of working hours, which could amount in costly claims against the employer for operating illegally. Working Time Directive – travel time

32. Social Action, Responsibility and Heroism Act (SARAH) - in force since 13th April 2015  Law designed to protect volunteers, such as first aiders, and employers that have proper training and safety procedures.  “Good Samaritans” should not fear being penalised if an accident or injury occurs while they are trying to do “the right thing”.  The Act requires that the courts give consideration to the following factors:  Was the person acting for the benefit of society?  Has the person demonstrated a predominantly responsible approach towards protecting the safety of others?  Was the person acting heroically by intervening in an emergency to assist a person in danger?

33. CDM 2015 – a practical view?

34. Key Changes Principal Designer introduced CDM 2015 new L Series Guidance from HSE Removal of strict “competence” requirements Increased client responsibility CDM Co-ordinator role abolished

35. Frequently asked questions Who will take on the PD role? Are PC’s going to be PD/be required by clients to do it? What SKE does a PD need? What does a PD scope of services look like? Indemnity cover How to deal with the need for a construction phase plan for all jobs no matter how small – relevant in FM style framework agreements

36. The FM context – what does that mean? Routine FM and lifecycle works often going to be “construction” If 2 contractors there will need to be a PD –Who will that be? –In reality HSE are not expecting it to be too difficult for lower risk short duration “maintenance” type activity All works – even low cost and short duration will need a phase plan Consider – how is that addressed?: a framework phase plan – HSE suggest it can be concise for simple activity

37. Relevance of contracts – potential claims HSE will usually ignore contractual provisions – if they determine someone is a Client / PC/ PD then will proceed on that basis But – can be indicative/evidence of scope of duty Consider appropriate scope of service – are they consistent with duties under the regulations? Indemnity cover? Amended role is likely to be covered by most policies.

38. Increased liability? Prosecutions? CDM breaches are criminal offences – concurrent liability exists: –Company – unlimited fines. New sentencing guidelines (Feb 2016) mean that these could be in the ££millions –Individuals – whether senior management or not – maximum 2 years imprisonment/unlimited fines Could be used as part of a wider allegation of manslaughter for companies or individuals Reputational damage and disqualification from procurement/commissioning processes

39. CDM – Recent Prosecutions (Clients) Chesham Care Ltd [2015]: Construction works at former hospital site Client failed to appoint PC and CDM-C Non-removal of ACMs and risk of building collapse Fine: £35,000 (plus prosecution costs) “Clients have a key role in safely directing construction projects. Effective arrangements at the start [including informed appointments] can have an amplified positive impact down the various stages to completion.”

40. CDM – Recent Prosecutions (Clients) Chart Forte Court (West Ealing) Limited [2015]: Hotel refurbishment project Client failed to appoint PC prior to appointing scaffold contractor Scaffold dangerously erected and then dangerously dismantled Fine: £18,000 for Client (plus prosecution costs) “This case shows the need to always properly plan the works and to ensure competent, skilled workers are in place to carry out high risk activities.”

41. Client election Regulation 4(8) –Where there is more than one client in relation to a project – –One or more of the clients may agree in writing to be treated for the purposes as the only client or clients Compare to the appoint of a JV company as PD / PC?

42. CDM – Recent Prosecutions (PCs) Parkland Developments Ltd [2015]: Housing development project PC failed to implement the Construction Phase Plan or ensure that scaffolding works were planned and managed or monitored Fine: £20,000 (plus prosecution costs) “This case highlights the importance of ensuring those who undertake construction work have the relevant skills, knowledge, training and experience to do so.”

43. The Aftermath…

44. CDM Recent prosecutions – Oxford Architects Partnership [2010] A/C engineer fell to death from a ladder over a low parapet wall His employer and designer prosecuted HSE said “wobbly” ladder too close to a wall that was too low – did not review risk assessment following change as rushing to complete project – “rare for designers to face prosecution Architect had changed the design to put a/c unit on a roof top platform G plea to Reg 13 & 14 CDM 2007 - £120k fine + £60k costs (more than the employer of the deceased)

45. CDM Recent Prosecutions: Cundall Johnston and Partners LLP [2013] Major refurbishment project at a former toffee factory in Newcastle in 2011. A two tonne brick archway collapsed and injured two workers who were shoring it up. HSE found that Cundall Johnston (Designer) had not provided information in its designs to ensure those carrying out the work would have known removing the masonry would cause the archway to become unstable. G plea to Reg. 11 CDM 2007 ( take all reasonable steps to provide with designs sufficient information about aspects of the design of the structure or its construction or maintenance ) Fine of £1,000 with costs of £7,000.

46. Guidance & enforcement The end of the CDM revision process concluded with substantial amounts of guidance –HSE L Series –CITB guidance –Other professional guidance (RIBA etc.) All will be relevant to enforcement decisions and enforcement action – irrespective of their “legal” status It’s not a complete answer but important to be aware of and give effect to guidance where possible If a different approach is taken, record why and be ready to justify it

47. Questions? Kizzy Augustin Senior Associate Pinsent Masons LLP E: kizzy.augustin@pinsentmasons.com T: 020 7418 9573 M: 07776 151786

48. Pinsent Masons LLP is a limited liability partnership registered in England & Wales (registered number: OC333653) authorised and regulated by the Solicitors Regulation Authority, and by the appropriate regulatory body in the other jurisdictions in which it operates. The word ‘partner’, used in relation to the LLP, refers to a member of the LLP or an employee or consultant of the LLP or any affiliated firm of equivalent standing. A list of the members of the LLP, and of those non-members who are designated as partners, is displayed at the LLP’s registered office: 30 Crown Place, London EC2A 4ES, United Kingdom. We use 'Pinsent Masons' to refer to Pinsent Masons LLP, its subsidiaries and any affiliates which it or its partners operate as separate businesses for regulatory or other reasons. Reference to 'Pinsent Masons' is to Pinsent Masons LLP and/or one or more of those subsidiaries or affiliates as the context requires. © Pinsent Masons LLP 2015 For a full list of our locations around the globe please visit our websites: www.pinsentmasons.com www. O ut- L aw.com