1. IOSH North Wales 20 October 2016 Zoe Betts Senior Associate
Legal Update
IOSH North Wales
20 October 2016
Zoe Betts
Senior Associate

2. Enforcement Prosecutions Fines – 2 significant changes
S. 85 LASPO – removes limit / cap on fines in the Magistrates’ Court for offences committed after 12 March 2015
Sentencing Guidelines for health and safety offences, corporate manslaughter, food safety and hygiene offences – apply from 1 February 2016

3. What the definitive guidelines cover?
Applicable - 1 February 2016 – retrospective effect
Apply to organisations AND individuals
Definitive guideline applicable in all courts in E&W
Introduced to ensure more transparency & consistency
Apply to
ALL H&S offences
fatal and non-fatal
corporate and individual offenders
Corporate manslaughter
Food Safety and Hygiene
Headlines:
Tariff based for the first time linked to turnover
Risk based not outcome based
They apply in all cases in all courts – s.85 LASPO removed the limit / cap on fines in the Mags court for all offences committed after 12 March 2015

4. Step 1 - Categories of harm
Seriousness of harm risked + likelihood of harm = Harm Categories 1-4 (NB: Risk of harm – not actual harm)
Seriousness of harm risked classified as:
Death
Physical or mental impairment resulting in lifelong dependency
Health condition resulting in reduced life expectancy
Level A
Physical or mental impairment not amounting to Level A, which has a substantial and long-term effect on the sufferer’s ability to carry out normal day to day activities or on their ability to return to work
A progressive, permanent or irreversible condition
Level B
All others not in A or B
Level C
Then look at numbers exposed and actual harm

5. Categories of harm Establish Harm category from Matrix
Then look at numbers exposed and actual harm

6. Step 1 - Culpability
Level of culpability extremely important

7. Issues relevant to culpability
High
Failing to put in place measures recognised as standards in the industry / sector
Ignoring concerns raised by employees or others
Failing to make changes after prior incidents
Allowing breaches to subsist over a long period of time
Low
Significant efforts were made to address risk but inadequate on this occasion
No prior event or warning indicating a risk

8. Step 2 - Categories of organisation
Establish financial position of offender based on turnover:
Micro – not more that £2m
Small – Between £2m and £10m
Medium – £10-£50m
Large – £50m and above
Very large companies – turnover “very greatly exceeds” £50m (but no guidance beyond that)

9. Step 2 - Categories of organisation
Apply Culpability and Harm Category from Step 1 to relevant Turnover category to see Starting Point fine and Category Range

10. Very large organisations
“Where an organisation’s turnover very greatly exceeds £50m, it may be necessary to move outside the suggested range to achieve a proportionate sentence”
What is a v large company? We don’t know at the moment
No definition other than very greatly exceeds £50m. What does that mean? £250m? £500m?
£1billion? – Must be – Sellafield / Network Rail / Thames Water
Who knows?
Working assumption that £500m plus is very large but courts may consider less turnover than this as v large
Fit Out had a turnover of over £600m last year = very large?
Thames Water – Court of Appeal (3 June 2015)
“the starting points and range of fines suggested [in the Guidelines] do not apply to very large organisations”
“general principles of sentencing apply”
For very large organisations “This may result in a fine equal to a substantial % and up to 100% of the company’s pre-tax net profit for the year… even if it results in fines in excess of £100m”

11. Individuals

12. Individual Culpability
Determine the offence category:
Culpability
Very High - Intentionally breached or flagrant disregard for the law
High – actual foresight of or wilful blindness to risk, and risk taken
Medium - an act or omission that a person exercising reasonable care would not do
Low – little fault i.e. minor error of judgment
Reminder –
Section 7
Section 37
Harm categories the same for individuals as it is for organisations

13. Individuals
Similar 9-step approach based on culpability & risk of harm
Threshold for imprisonment lowered to neglect in fatal accident cases

14. Corporate Manslaughter

15. Corporate Manslaughter and Corporate Homicide Act 2007
Introduced “new” manslaughter offence for organisations
In force – 6 April 2008
27 cases to date
22 in E&W/ 5 in NI / 0 in Scotland
Of that 27
21 convictions (6 trials; 15 guilty pleas)
5 acquittals
1 on-going case
Quick recap – An organisation guilty of the offence will be liable to an unlimited fine. The Act also provides for courts to impose a publicity order, requiring the organisation to publicise details of its conviction and fine.

16. Corporate Manslaughter - guidelines
Triable only on indictment – crown court
Maximum fine is unlimited
Offence range - £180K to £20million
Step 1 – Determine the seriousness of the offence
Step 2 – Starting Point and category range
Steps 3 and 4 – is the fine proportionate / wider impact
Steps 5 to 9 – guilty pleas and other orders etc

17. A rising trend – the new guidelines in action
What have we already started to see? And what can we expect to see more of…

18. Fines post-1 Feb 2016 Very Large Organisation Large Organisation
ConocoPhilips (UK) - £3m – risk alone
Balfour Beatty Utility Solutions - £2.6m – fatal
Travis Perkins - £2m – fatal
Tata Steel - £1.98m – non-fatal
Network Rail - £4m – fatal
Large Organisation
McCain Foods - £800,000 – non-fatal
G4S Cash Solutions - £1.8m – risk alone
Merlin Attractions - £5m – non-fatal

19. Tata Steel UK Limited Facts Fine
Two workers suffered injuries to their hands in two separate incidents
Turnover: £4.2bn
Loss before tax: £306m
Fine
£1.98 million (£185,000 for the first offence and £1.8 million for the second offence)

20. Tata Steel UK Limited Sentencing remarks Commentary
Medium culpability in the 1st incident and High in the 2nd
High likelihood of level A harm = Harm Cat 2
Failure to appropriately guard and manage the risks arising from dangerous parts of items of machinery
Commentary
Given the level of fine imposed, the court must have looked at the group’s resources
This case demonstrates the importance of learning lessons from previous incidents and how crucial it is to keep offences within the Low to Medium category of culpability

21. G4S Cash Solutions Ltd Facts Fine
Employee contracted Legionnaires Disease
No evidence of causal link to G4S’ premises
Hot and cold water systems badly managed
Inadequate policies, monitoring, testing, and training for staff
Failure to act on advice of own consultant and L.A’s warnings
Turnover: £240million
Profit before tax: £43 million
Fine
£1.8 million

22. G4S Cash Solutions Ltd Commentary
Demonstrates fines are linked to risk of harm, not actual harm
Had the Co. not pleaded guilty, the fine would have been nearer £3m
Many organisations will have access to either in-house or external competent safety advisors. Failing to seek – and, more significantly, act appropriately on – that advice will result in a higher fine

23. Network Rail Facts Fine
Member of the public killed at the Gypsy Lane railway crossing in Suffolk
Five seconds visual warning but for children or less mobile people, it could take up to ten seconds to cross
NR was aware of concerns and was considering a temporary speed limit but no action was taken
Fine
£4 million

24. Network Rail Commentary
Fine reduced from £6 million after a guilty plea
Level of fine was increased because both RAIB and ORR investigations concluded that NR had failed to act on warnings that alerts for approaching trains were not sufficient
Case emphasises the need for organisations to take action swiftly when made aware of serious risk to safety
Directors forfeited their bonus payments to improve safety

25. Merlin Attractions Operations Ltd
Facts
16 people injured on Smile Rollercoaster at Alton Towers following a collision between two carriages
Two young women required a leg amputation
Maintenance engineers deactivated ride’s control system without sufficient training in the risks of doing so
4 to 5 hours before emergency services were able to bring people down from suspension at 45 degree angle 20 feet in the air
Fine
£5 million

26. Merlin Attractions Operations Ltd
Commentary
Fine reduced from £7.5 million for a guilty plea
Level of fine increased as a result of aggravating factors including:
conviction in 2012 for failing to have an adequate risk assessment (Warwick castle)
exposing thousands of people to risk since ride opened in 2013 as well as causing actual harm
failure to provide proper access for emergency services
LARGEST FINE TO DATE!

27. What does it all mean?
Fines for large companies are going to be substantially increased
Very large companies fall outside the ranges in the Guidelines and “all bets are off”
More individuals are likely to receive custodial sentences
Battleground:
The extent to which failures were systemic v. isolated lapses
Establishing whether culpability was “low” as opposed to “medium” (or “high”)
Important to show safety management systems are in place and robust (and properly invested in), and what role was played by senior management and directors (leadership and direction)
Incident Response – privilege even more important. Different tactics

28. And in other news….
Risk
R (HSE) v C T Aviation Solutions Ltd [2015] Court of appeal
Risks which are an “incidence of everyday life and which are tolerated by society” - not relevant
There has to be some proximity between the risk and the conduct of the business
The better way to avoid prosecution or to secure an acquittal is to demonstrate that all reasonable precautions have been taken

29. Questions
Zoe Betts
Mobile:

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