Directors & Officers
The Heat is On
With the recent increase in corporate manslaughter convictions, courts imposing higher fines, and the ever growing public concern over justice, companies are being forced to think more carefully about Risk Management.
Under the Health & Safety at Work Act 1974, the usual Magistrates' Court fine threshold of £5,000 has increased to £20,000 for main offences and in the Crown Court fines are unlimited. Directors and Senior Management can also face manslaughter charges in common law if they are found liable for fatalities at work.
As a business, you have a legal obligation to identify and prevent risks, and where this isn't possible you must be able to provide evidence that the risk is managed appropriately. If you cannot provide evidence of risk management, it could cost you in terms of fines, legal fees and an increase in your insurance premiums. But more than this it could also result in damage to plant/machinery, reputation and the ill-heath/injury of your staff.
And yet despite the numerous warnings and court cases, businesses are still getting it wrong, with the number of fatalities and injury within the workplace remaining constant.
The most important trend for business to be aware of is the movement towards higher fines, though unfortunately, you cannot insure against this. When considering a sentence, higher fines would be the result of such aggravating features as death/serious injury, an ongoing breach (opposed to an isolated incident), a deliberate breach of safety legislation with a view to profit and a failure to heed any warnings given.
Enforcement Authorities are taking a hard line on all such breaches. For example the Working Time Directive made its first prosecution in 2002 of Forbuoys for not restricting the hours worked by an employee, resulting in costs of £2,150 and compensation of £1,200 being paid to the employee.
Events like the Ladbroke Grove and Southall Railway disaster, coupled with organisations like the Centre for Corporate Accountability and an increase in public interest in health and safety, mean the pressure is really on for the authorities to take serious action.
Conversely, the prosecution rate has increased, with a conviction rate of 86% according to the HSE's statistics branch.
Statistics from 2004/2005
Fatal injuries
- 220 workers were fatally injured, a rate of 0.7 per 100,000
- 361 members of the public were fatally injured
Non-fatal injuries
- 150,599 other injuries to employees were reported, a rate of 587 per 100,000
- 363,000 reportable injuries occurred
Approximately half the injuries occurred in two areas - Construction (71) and Forestry and Fishing (42)
(Source: Health and Safety Executive Statistics)
Involuntary Manslaughter
Involuntary manslaughter prosecutions have increased dramatically, with the Labour Party showing its constant support through its manifesto commitments for a new corporate killing offence.
The new proposals focus on management failings in their totality rather than the individual culpability of any one director or manager, meaning that in the future, if a company has serious failings in their systems of work that lead to a fatality, then that company is likely to face a charge of corporate killing. Therefore it is important to have the appropriate cover in place to protect your business should such an event arise.
It is also imperative to monitor and manage all operations, regulate training and ensure all staff are fully aware of their responsibilities as an employee, and that they each understand the duty of care they have too.
November 2007