The largest UK fines for health and safety incidents have increased substantially in the past year, with some of the biggest brands in business having to pay millions of pounds for failing to control serious risks to employees and the public.
There were 19 fines of £1 million or more in 2016 – the largest being £5 million. This compares with three fines of £1 million or more in 2015 and none in 2014.
The rise in fines is a result of the introduction of new sentencing guidelines for health and safety offences, which came into force on 1 February 2016.
It is hoped that the possibility of larger penalties will make employers take greater care to ensure people are not harmed by their activities, according to the Institution of Occupational Safety and Health (IOSH). This, IOSH says, can in turn help businesses become more successful.
Shelley Frost, Executive Director of Policy at IOSH, said: “Health and safety offences can ruin lives, devastate families and inhibit precious talent.
“Whilst you cannot put a value on human life, the level of fines now being handed out recognises society’s disapproval of serious corporate failures that lead to injury, illness and death. It reflects a desire to deter others from making the same errors and takes significant steps forward in aligning penalties for these offences with other regulatory breaches in the UK.
“Protecting employees and others affected by a business’s operations will not only eliminate the risk of a large financial penalty but can also be key to ensuring and maintaining an organisation’s strong reputation and ultimately contributing to its success.”
For the first anniversary of this change in legal guidance for the courts, IOSH, in association with Osborne Clarke LLP’s specialist health and safety legal team, has today revealed the results of a Freedom of Information Act (FOIA) request exploring the impact of the new sentencing guidelines.
This shows that the largest 20 fines imposed for health and safety offences last year cost the businesses involved a total of £38.6 million. In comparison, the largest 20 fines in 2015 and 2014 cost £13.5 million and £4.3 million respectively.
Not every fine in 2016’s largest 20 involved a fatality, with the guidelines deeming that it is enough for a company’s health and safety failings to have caused injury, or put people at substantial risk of injury or death, to warrant a large financial penalty.
For example, the largest fine was the £5 million that Merlin Entertainments was ordered to pay after five people were seriously hurt in a rollercoaster crash at its Alton Towers theme park. Following the sentencing, the organisation said its focus on safety is “sharper and more engrained than ever”.
The broken leg and dislocated ankle suffered by actor Harrison Ford while filming Star Wars: the Force Awakens resulted in a £1.6 million fine for Foodles Production. The HSE said it could have resulted in more serious injury or even death. Foodles stated: “The safety of our cast and crew was always a top priority and we deeply regret this unfortunate on-set accident. The Court acknowledged both the additional safety protocols that were immediately implemented, and that it was a very safe production in all other respects.”
Most fines imposed by courts in 2016 related to health and safety offences which took place before the guidelines were introduced.
Mary Lawrence, a partner at law firm Osborne Clarke LLP specialising in health and safety, and an IOSH Council member, said: “The increase in fines being issued by the courts demonstrates a desire to drive the message home that ensuring health and safety within a working environment is fundamental. So while fines regularly exceeded the million pound mark last year, we can expect to see even larger fines going forward.
“I see many businesses who focus on the safety and health of employees and others experiencing a broad range of benefits, including being better placed to attract and retain talent, scoring points in procurement processes for valuable contracts or even when seeking external investment.”
Before the introduction of the guidelines, there was little assistance for courts sentencing health and safety offences.
The 2016 guidelines, a 40-plus page document, provide a step-by-step guide for sentencing both companies and individuals for health and safety, and food, offences. This includes taking into account the turnover of the organisation, the level of culpability and the likelihood that the failing could lead to harm and how bad the harm could be.
A summary report and analysis of the FOIA request data by IOSH and Osborne Clarke, with advice on how to prevent serious breaches that lead to fines, is available at www.iosh.co.uk/sentencingguidelines.
Webinar | Health and Safety Guidelines: A year on
Osborne Clarke partners Mary Lawrence and Katie Vickery explore in more detail how the guidelines work, what impact they have been having on business over the last year and what businesses can do to guard against the legal risks associated with a prosecution.
In addition to UK businesses who may have been familiar with the enforcement regime change previously, investors and business owners from outside the UK investing in UK business may be assisted by this session to consider how they can assess business risk and the impact of failing to comply.