Legal Update IOSH North Wales 20 October 2016

Legal Update IOSH North Wales 20 October 2016 Zoe Betts Senior Associate

Enforcement • Prosecutions – Fines – 2 significant changes • S. 85 LASPO – removes limit / cap on fines in the Magistrates’ Court for offences committed after 12 March 2015 • Sentencing Guidelines for health and safety offences, corporate manslaughter, food safety and hygiene offences – apply from 1 February 2016 2

What the definitive guidelines cover? • • • Applicable - 1 February 2016 – retrospective effect Apply to organisations AND individuals Definitive guideline applicable in all courts in E&W Introduced to ensure more transparency & consistency Apply to – ALL H&S offences • fatal and non-fatal • corporate and individual offenders – Corporate manslaughter – Food Safety and Hygiene

Step 1 - Categories of harm • Seriousness of harm risked + likelihood of harm = Harm Categories 1 -4 (NB: Risk of harm – not actual harm) • Seriousness of harm risked classified as: Level A • Death • Physical or mental impairment resulting in lifelong dependency • Health condition resulting in reduced life expectancy Level B • Physical or mental impairment not amounting to Level A, which has a substantial and long-term effect on the sufferer’s ability to carry out normal day to day activities or on their ability to return to work • A progressive, permanent or irreversible condition Level C • All others not in A or B

Categories of harm • Establish Harm category from Matrix

Step 1 - Culpability • Level of culpability extremely important

Issues relevant to culpability • High – Failing to put in place measures recognised as standards in the industry / sector – Ignoring concerns raised by employees or others – Failing to make changes after prior incidents – Allowing breaches to subsist over a long period of time • Low – Significant efforts were made to address risk but inadequate on this occasion – No prior event or warning indicating a risk

Step 2 - Categories of organisation • Establish financial position of offender based on turnover: – – – Micro – not more that £ 2 m Small – Between £ 2 m and £ 10 m Medium – £ 10 -£ 50 m Large – £ 50 m and above Very large companies – turnover “very greatly exceeds” £ 50 m (but no guidance beyond that)

Step 2 - Categories of organisation • Apply Culpability and Harm Category from Step 1 to relevant Turnover category to see Starting Point fine and Category Range

Very large organisations • Very large organisation • “Where an organisation’s turnover very greatly exceeds £ 50 m, it may be necessary to move outside the suggested range to achieve a proportionate sentence”

Individuals

Individual Culpability • Determine the offence category: – Culpability • Very High - Intentionally breached or flagrant disregard for the law • High – actual foresight of or wilful blindness to risk, and risk taken • Medium - an act or omission that a person exercising reasonable care would not do • Low – little fault i. e. minor error of judgment

Individuals • Similar 9 -step approach based on culpability & risk of harm

Corporate Manslaughter

Corporate Manslaughter and Corporate Homicide Act 2007 • Introduced “new” manslaughter offence for organisations • In force – 6 April 2008 • 27 cases to date – 22 in E&W/ 5 in NI / 0 in Scotland • Of that 27 – 21 convictions (6 trials; 15 guilty pleas) – 5 acquittals – 1 on-going case

Corporate Manslaughter - guidelines • • Triable only on indictment – crown court Maximum fine is unlimited Offence range - £ 180 K to £ 20 million Step 1 – Determine the seriousness of the offence Step 2 – Starting Point and category range Steps 3 and 4 – is the fine proportionate / wider impact Steps 5 to 9 – guilty pleas and other orders etc

A rising trend – the new guidelines in action

Fines post-1 Feb 2016 • Very Large Organisation – – – Conoco. Philips (UK) - £ 3 m – risk alone Balfour Beatty Utility Solutions - £ 2. 6 m – fatal Travis Perkins - £ 2 m – fatal Tata Steel - £ 1. 98 m – non-fatal Network Rail - £ 4 m – fatal • Large Organisation – Mc. Cain Foods - £ 800, 000 – non-fatal – G 4 S Cash Solutions - £ 1. 8 m – risk alone – Merlin Attractions - £ 5 m – non-fatal

Tata Steel UK Limited • Facts § § § Two workers suffered injuries to their hands in two separate incidents Turnover: £ 4. 2 bn Loss before tax: £ 306 m • Fine § £ 1. 98 million (£ 185, 000 for the first offence and £ 1. 8 million for the second offence)

Tata Steel UK Limited • Sentencing remarks § § § Medium culpability in the 1 st incident and High in the 2 nd High likelihood of level A harm = Harm Cat 2 Failure to appropriately guard and manage the risks arising from dangerous parts of items of machinery • Commentary § § Given the level of fine imposed, the court must have looked at the group’s resources This case demonstrates the importance of learning lessons from previous incidents and how crucial it is to keep offences within the Low to Medium category of culpability

G 4 S Cash Solutions Ltd • Facts • • • § § Employee contracted Legionnaires Disease No evidence of causal link to G 4 S’ premises Hot and cold water systems badly managed Inadequate policies, monitoring, testing, and training for staff Failure to act on advice of own consultant and L. A’s warnings Turnover: £ 240 million Profit before tax: £ 43 million • Fine § £ 1. 8 million

G 4 S Cash Solutions Ltd • Commentary • • • Demonstrates fines are linked to risk of harm, not actual harm Had the Co. not pleaded guilty, the fine would have been nearer £ 3 m Many organisations will have access to either in-house or external competent safety advisors. Failing to seek – and, more significantly, act appropriately on – that advice will result in a higher fine

Network Rail • Facts Ø Member of the public killed at the Gypsy Lane railway crossing in Suffolk Ø Five seconds visual warning but for children or less mobile people, it could take up to ten seconds to cross Ø NR was aware of concerns and was considering a temporary speed limit but no action was taken • Fine Ø £ 4 million

Network Rail • Commentary Ø Fine reduced from £ 6 million after a guilty plea Ø Level of fine was increased because both RAIB and ORR investigations concluded that NR had failed to act on warnings that alerts for approaching trains were not sufficient Ø Case emphasises the need for organisations to take action swiftly when made aware of serious risk to safety Ø Directors forfeited their bonus payments to improve safety

Merlin Attractions Operations Ltd • Facts Ø 16 people injured on Smile Rollercoaster at Alton Towers following a collision between two carriages Ø Two young women required a leg amputation Ø Maintenance engineers deactivated ride’s control system without sufficient training in the risks of doing so Ø 4 to 5 hours before emergency services were able to bring people down from suspension at 45 degree angle 20 feet in the air • Fine Ø £ 5 million

Merlin Attractions Operations Ltd • Commentary Ø Fine reduced from £ 7. 5 million for a guilty plea Ø Level of fine increased as a result of aggravating factors including: o conviction in 2012 for failing to have an adequate risk assessment (Warwick castle) o exposing thousands of people to risk since ride opened in 2013 as well as causing actual harm o failure to provide proper access for emergency services § LARGEST FINE TO DATE!

What does it all mean? • Fines for large companies are going to be substantially increased • Very large companies fall outside the ranges in the Guidelines and “all bets are off” • More individuals are likely to receive custodial sentences • Battleground: – The extent to which failures were systemic v. isolated lapses – Establishing whether culpability was “low” as opposed to “medium” (or “high”) – Important to show safety management systems are in place and robust (and properly invested in), and what role was played by senior management and directors (leadership and direction) • Incident Response – privilege even more important. Different tactics

And in other news…. • Risk – R (HSE) v C T Aviation Solutions Ltd [2015] Court of appeal • Risks which are an “incidence of everyday life and which are tolerated by society” - not relevant • There has to be some proximity between the risk and the conduct of the business • The better way to avoid prosecution or to secure an acquittal is to demonstrate that all reasonable precautions have been taken

Questions Zoe Betts Mobile: 07917 014 986 zoe. betts@pinsentmasons. com

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