Health and Safety Bill equals tougher fines

If the Health and Safety (Offences) Bill makes it into law it will considerably raise the stakes for health and safety offences, raising the limit for fines and making imprisonment an option.

2008 is a landmark year in the field of health and safety. Not only has Corporate Manslaughter legislation come into effect, but the Health and Safety (Offences) Bill has been gathering momentum. Former Labour minister Keith Hill has brought this as a Private Members Bill, which has received unanimous cross-party support as it has made its way through the legislative process.

So why is the climate changing now? Well, there have been repeated expressions of frustration by the Courts at their inability to impose custodial sentences. Second, there was a widespread consensus during the consultation to the publication Revitalising Health and Safety, in 2000, that tougher sentences were required.

In fact, the penalties issue received the highest number of responses, thereby demonstrating public concern with a perceived lack of deterrent within the legislation.

At present, magistrates cannot impose a fine above:

• £5,000 if the offence relates to a breach of a Regulation
• £20,000 if the offence relates to a breach of the Health and Safety at Work Act 1974
• But if the Bill makes it into law in its current state, this will change. In simple terms it will:
• Raise the maximum fines which can be imposed in the Magistrates Courts to £20,000 for most health and safety offences.
• Make imprisonment an option for more serious health and safety offences in both the Magistrates and the Crown Court (for example, deliberately creating serious risk with a view to profiting).
• Make certain offences (ie, preventing another person from appearing before an inspector or from answering an inspector's questions) that are currently triable in only the Lower Courts also triable in the Higher Court.

Clearly, there is much to consider as the penalties for breaking the rules are that much harsher than at present. But when can we expect to see the Bill become law? The most likely date is next April, but the Bill needs to have its final reading at the House of Lords. This was scheduled for July, but will now not take place until October, so health and safety practitioners are urged to watch for progress.

The introduction of the Bill so soon after the Corporate Manslaughter and Corporate Homicide Act continues to raise the stakes for both businesses and their directors, who can now be held liable for serious breaches of the law. Before the Corporate Manslaughter Act was introduced, there had been no successful prosecution of any large or complex company or organisation. This was because the law required an individual who was sufficiently senior to be regarded as the "directing mind" of the company to be found guilty of manslaughter before the company could be convicted.

This has now changed, and while we are yet to see any prosecutions brought under the new Act, it's likely that they're just a matter of time away.

And the stakes are high. The Sentencing Advisory Panel's recent consultation document recommended linking penalties to the turnover of the defendant company in cases involving fatalities.

In respect of the Corporate Manslaughter Act, this is in the range of 2.5% to 10% of turnover. In addition, penalties under the Health and Safety at Work Act are recommended at 1% to 7.5%, a significant increase on the current situation. The results of the consultation are expected to be released in the autumn with the final sentencing guidelines for the Courts being published in April 2009 following further consultation.

Some might say the increase in potential fines indicated above is too great, but compare them to the fines for financial breaches. The Financial Services Authority (FSA), which regulates the financial sphere in a similar role to the Health and Safety Executive (HSE), imposed an average fine of £232,000 in 2006-2007. In comparison, the HSE figure for the same period was just over £15,000. In its response to the draft Regulatory Enforcement and Sanctions Bill, the Health and Safety Commission stated: "Before looking at new penalties there is a need to ensure the level of fines imposed under current penalties act as an effective deterrent current levels are too low."

The above progress combined with the publication of the Institute of Directors/Health and Safety Commission guidance Leading Health and Safety at Work last October means there is no excuse for not being prepared. It should be remembered that the guidance was an alternative to having specific legal duties placed upon directors. With the stakes never having been higher it is paramount that organisations:

• Audit current policies and procedures, particularly their organisation and responsibilities.
• Undertake board level training.
• Implement an incident response protocol.

The HSE construction work programme is published on its website (www.hse.gov.uk/construction/program.htm) and outlines its priority areas in five categories:

• Safety projects
• Health projects
• CDM dutyholders
• Strategic stakeholders
• Non-portfolio

Construction industry businesses are urged to take heed of the new legislation and that which is on the way. The message is clear: if your activities fall into any of these categories, be prepared.

Jonathan Cowlan is health and safety senior manager at Pinsent Masons