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Sharp rise in Corporate fines for health and safety breaches

Morag Rea

Thomson Reuters Legal Business, the world’s leading source of intelligent information for businesses and professionals, says the value of corporate fines for health and safety breaches increased 18% in the last year, hitting £57.3m in 2017 up from £48.5m in 2016, in an attempt to get health and safety on the agenda at board level. Contributor Morag Rea, Head of Business Crime and Investigations – Thomson Reuters Practical Law.

How are health and safety fines becoming more significant? The Sentencing Council introduced tougher guidelines for the fines in February 2016, focusing heavily on the level of management culpability for risk of, or actual, harm. Also taken into account are the profitability of the company in question, the potential impact of the fine on employees, and on the company’s ability to make restitution to victims.

Thomson Reuters Legal Business says health and safety breaches can range from an isolated, minor failure to comply with proper processes, to a company deliberately disregarding the law or ignoring concerns raised by employees about dangerous working practices.

Why has this increase in the value of health and safety fines occurred? Fines are being increased as part of efforts to get health and safety recognised as an issue to be dealt with at board level.

In response to the implementation of the guidelines, Thomson Reuters developed a ‘Corporate Convictions Tracker’ for use by in-house legal teams in the UK. Recent examples of companies fined, identified by the Thomson Reuters ‘Corporate Convictions Tracker’, include: A plant hire company and a pallets manufacturer were fined £2.5m after a worker was killed; A large household goods retailer was fined £2.2m after an employee was left seriously injured; A multi-national steel manufacturer was fined £1.3m when an electrician was killed; An intruder alarm manufacturer was fined £140,000 when an employee was seriously hurt; A food manufacturer was fined £300,000 after an employee was severely injured when cleaning machinery

Morag Rea, who is Head of Business Crime and Investigations at Thomson Reuters Practical Law: “Fines for health and safety breaches continue to rise considerably, as companies are held increasingly accountable for failing to adhere to standards. The rise in the value of fines shows the significant financial costs for businesses if health and safety regulations are breached – the rise comes as part of attempts to get the issue on the board level agenda.

“The health and safety of the work force is a business priority, and failure to prioritise is considered a significant business risk. The intention for the guidelines was for large organisations convicted of the most serious offences to receive the largest fines. These offences are strictly liability, and most organisations plead guilty rather than face trial – the early guilty plea means they then receive a discount to the imposed fine.”

“The top tiers of management at businesses could be forced to take into account that breach of health and safety regulations can be a very costly mistake, particularly in the circumstances where the company was treated as a linked organisation.”

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