The biggest changes in the last 40 years are about to alter the Health & Safety landscape, with fines up to TEN TIMES HIGHER than their previous levels. The future will see individuals (directors and managers) being sent to prison in cases where previously this would not have happened.
This is the new Tariff Based System: The guidelines seek to classify corporate entities by reference to turnover:
- “Micro” not more than £2 million turnover.
- “Small” Between £2 million – £10 million.
- “Medium” Between £10 million – £50 million.
- “Large” £50 million and over.
The guidelines calculate a fine level (with a range of potential sentences and an indicated starting point) based on a calculation taking into account turnover, risk of harm and culpability (Low/Medium/High/Very High).
A major impact of these guidelines is that they do not require proof that the offence caused any actual harm, the offence is creating a risk of harm.
Guidelines
Depending on the level of culpability, a medium size organisation might have a starting point for a fine as high as £1.6 million, large companies a top level fine of £10 million.
For Corporate Manslaughter, a medium size organisation would see a starting point of £3 million with a possibility of fines up to £7.5 million.
A large organisation faces potential fines of up to £20 million.
In 2014 there were almost 700 convictions by the HSE (HSE conviction rate is 94%) and this figure isnt a declining one so its very much a concern area for companies and individuals, particularly for serious incidents, which are on the increase.
What you need to know – insurance issues
Defence Costs – costs arising from public or employers liability claims would usually be picked up by your standard commercial insurance policy however the issue is that the courts have the power to impose fines against both the Ltd company and individual directors if you as a business permit a situation to exist that may result in a perceived risk to either an employee or a third party. If this is the case then your insurance policy would not respond because no actual physical damage or injury has occurred. Also any criminal fines that are imposed would not be insured by your liability policy.
Risk Improvements – most Clubs / Nightclubs will have had a visit by a Risk Surveyor or will have completed an online risk questionnaire. If as a result of this visit/questionnaire a list of requirements and hazards have been brought to your (policyholders) attention and you haven’t acted on it there could be large fines to pay if someone is injured. Your liability policy will not pay these fines for your
For the full paper go to http://www.sentencingcouncil.org.uk/publications/item/health-and-safety-offences-corporate-manslaughter-and-food-safety-and-hygiene-offences-definitive-guideline/