Conviction rates and penalty levels expected to rise
The financial and reputational costs of workplace health and safety breaches are about to rise significantly. This is the result of tough new sentencing guidelines for corporate manslaughter and health and safety offences.
The new regime represents a major change, with higher conviction rates and more severe penalties against organisations and duty holders for most workplace health and safety offences.
Corporate and personal sanctions increase
Any organisation that sacrifices health and safety for profit, or turns a blind eye to unsafe health and safety practice, could face irreparable reputational and financial damage. But that’s not all that corporate managers should be worried about.
Conviction rates for individuals held liable for health and safety failings are also likely to increase. Unless the risk of harm is very low, courts will be directed that all cases of deliberate breach (the highest category of culpability) should result in an immediate custodial sentence of up to 2 years, for the most serious offences.
Tougher sentences drive home the health and safety message
These tougher measures are designed to provide a real deterrent: in future, health and safety offence punishments will fit the crime. This can only be viewed as a positive development in focusing UK businesses’ attention on raising health and safety standards.
Organisations must now ask whether their workplace health and safety management systems are sufficiently robust, and properly integrated with strategic business planning and operations. If not, the repercussions are likely to be far more serious and penetrative than ever before.
No hiding from three or fourfold increase in fine levels
In determining fines, sentencing courts will now be able to take into account the turnover of a linked organisation which is not a defendant. As a result, a three or fourfold increase in penalties can be expected as typical, with potentially unlimited increases in some cases.
To put the new sentencing powers into context, here’s what would have happened in the Hatfield rail disaster case, if the maximum 10% turnover figure in the new guidelines had been applied. Network Rail and Balfour Beatty’s fines would have risen to £600m and £200m respectively, from the £3.5m and £7.5m fines which were in fact handed down.
Adverse publicity bites
Of course, the greater cost to many organisations will be adverse publicity that damages their reputation and business activities. And here again, courts’ new powers will bite.
In cases of corporate manslaughter, the introduction of Publicity Orders means that convicted corporate defendants may be required to publicise the facts of their conviction. For larger organisations with brand loyalty and reputational concerns, the changes will almost certainly lead to more contested trials, or very early guilty pleas.
At last it seems, there is a real deterrent for those who sideline health and safety. However, it remains to be seen whether linking fines to turnover will be the most appropriate measure.
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