The new Sentencing Guidelines represent the biggest shake up to the Regulatory landscape in recent years, with fines up to 10 times higher (or more in some cases), than their previous levels. With respect to individuals we are expecting to see cases of imprisonment of directors and managers in cases where that would have been unheard of before.
A month after the inception of the new guidelines, we can already see their impact as two recent cases affecting a Micro (less than 2million turnover) and Medium Company respectively and the impact this will have on operators of these levels.
These two cases not only underline the impact of the new sentencing guidelines for operators but reflect the greater number of commercial considerations such operators will have with respect to their crisis response strategies, corporate governance and be aware of their risk profile moving forwards.
Medium Sized Organisation
Falcon Crane Hire Limited
A crane hire company has been fined £750,000 following a HSE investigation following a 2006 crane collapse in Battersea, London. The collapse caused the death of the 37 year old crane operator and a 23 year old pedestrian. Falcon Crane Hire Limited subsequently pleaded guilty to breaches of section 2 and 3 of the Health and Safety at Work Act 1974. Separate charges against the managing director were dropped in exchange for a guilty plea by the company.
Southwark Crown Court heard that the crane had been badly overloaded with twelves tonnes of counterweights instead of eight after the wrong instruction manual was used to erect the crane. The extra weight would have increased the tension on a crucial set of bolts by “100-plus per cent” according to the HSE inspector.
The company had failed to investigate why four bolts on the crane had failed two months earlier.applied complied with. The company’s £22,000,000 turnover placed it within the “medium” sized company bracket for the purposes of the guidelines. The company’s high culpability and the significant aggravating features of the case (not investigating the cause of the earlier bolt failure and the fact that the breach resulted in two deaths) meant that the starting point for the fine would be higher than the £950,000 starting point for that sentencing bracket. Assuming this was reduced for the company’s guilty plea by up to one third this represents a starting point of approximately £1.1m. Indeed, given the two deaths the company potentially risked being found to have a “very high culpability”, under which the potential starting point is £1,600,000.
It is abundantly clear that failure to act upon audits and failure to ‘learn lessons’ will be treated with skepticism by the courts and operators may need more than never to ensure their governance and responsiveness is in order.
Rainbow Waste Management Limited
A Derbyshire-based waste and skip hire firm has been fined £136,000 and ordered to pay £64,770 costs after a worker was crushed to death by the bucket of a motorised loading shovel.
In the 10 days leading up to the incident, CCTV cameras at the site captured over 200 examples of unsafe working practices. These included dangerous operations with the shovel such as workers being lifted in the bucket or having to take evasive action to avoid contact with moving vehicles.
The HSE Inspector said that: “Rainbow Waste failed to put in place basic legal requirements of training and supervision. The death of this young man was entirely avoidable.”
Applying the new sentencing guidelines, the Judge concluded the firm’s culpability was high with a category one harm level. With a turnover of less than £2 million per annum, the company fell into the “micro” category in terms of size of enterprise. These factors brought the fine into the range £100,000 to £250,000 with a starting point of £160,000. The fine was reduced due to an earlier guilty plea although the array of unsafe working practices, and the number of employees exposed to them, constituted a significant aggravating feature.
The case clears up any legal opinion that a court will be reluctant to hand down significant fines to operators even when they are identified as “micro” businesses. It has been suggested that the new guidelines are of greatest concern to the largest operators who could now be fined an unlimited amount and who are likely to face the largest percentage increase in fines, smaller operators in the most serious cases will be at the greatest risk of being put of out of business by these aggravated fines.
If you require any further information on the new sentencing guidelines or health and safety matters more generally please contact Vikki Woodfine – firstname.lastname@example.org or Simon Tingle – email@example.com