Select Committee on Work and Pensions Written Evidence


Memorandum submitted by Professor Frank Wright

SUMMARY

    —    The Health and Safety Commission and the Health and Safety Executive must evolve to meet the formidable difficulties which confront them. A cohesive unitary board comprising executive and non-executive members, remains the best pattern. The need for a balance between executives and non-executives has been incorporated into the combined code on corporate governance for companies listed on the London Stock Exchange. Similar standards should be put in place for the public sector. The minimal role likely to be accorded to local authorities is to be regretted. Local authorities have much to offer in terms of knowledge, experience and resource, and they could contribute much at the strategic level to help meet the challenges of the 21st century.

    —    The whole area of health and safety regulation at EC level introduced since the passage of the Single European Act in 1986 and largely completed by 1994 was poorly planned and inadequately considered. More clarity and consistency is required. Inappropriate implementation may not be as big a problem in the UK—in absolute terms and relative to other EU countries—as is alleged by some commentators.

    —    The current law provides for individual liability for health and safety offences, including deaths at work in s.37 of the Health and Safety at Work etc, Act 1974. Directors and officers of corporations owe statutory duties to their corporation, their employees and the public at large. The new IoD/HSC guidance was published on October 29th 2007. This guidance sets out an agenda for the effective leadership of health and safety. It is designed for use by all directors, governors, trustees, officers and their equivalents in the private, public and third sectors. It applies to organisations of all sizes. In considering the liability of an organisation under the Corporate Manslaughter and Corporate Homicide Act 2007, a jury must consider any breaches of health and safety legislation and may have regard to any health and safety guidance. This guidance could be a relevant consideration for a jury depending on the circumstances of the particular case. Similar considerations will apply for prosecutions under the Health and Safety at Work etc., Act 1974. It is, of course, too early to assess the impact of this guidance.

    —    The resources available to the Health and Safety Commission and the Health and Safety Executive are insufficient and as a consequence are spread too thinly. In real terms the budget for HSE for 2005-06 is 1.3 times the budget out-turn for 1975-76, its first year of operation. The volume of legislation, the wide range and deep complexity of the issues which must be managed by the Health and Safety Commission and the Health and Safety Executive justifies an increase in their budgets of some 25-30%.

    —    Trials on indictment in Crown Courts for the more serious offences have resulted in substantial fines but fines for offences tried summarily have been criticised for their leniency for much of the time that the Health and Safety at Work etc Act 1974 has been in force.

1.   Introduction

  1.1  The following is evidence on the proposal to merge the Health and Safety Commission and the Health and Safety Executive, the legislative framework, resources and inspection and enforcement and prosecutions. I have been researching these matters since the 1970s and have published extensively on them. A list of my relevant publications is available on request. I have arranged my evidence according to your subheadings.

2.   The proposal to merge the Health and Safety Commission and the Health and Safety Executive

  2.1  I have recently published a paper on this subject. It can be found at The Health & Safety Commission—A Case for Reform, Law Science and Policy, [2007], 3 157—175 ISSN 1475-5335.

  2.2  The Health and Safety Commission and the Health and Safety Executive were deliberately set up at arm's length from Government to protect their activities from political interference. This was intended to promote public confidence in health and safety regulation. In addition, it was intended to demonstrate that the Health and Safety Commission and the Health and Safety Executive were independent and outside political influence. The relationship of these two Crown bodies is unique within Whitehall. The parent department, the Department for Work and Pensions, retains mechanisms for influence through funding, appointments, target setting, audit and review. Nevertheless, an appointed Commission served by an executive arm has had certain advantages. The "lay" element can effectively limit the possibility of "rule" by officials and has made for a degree of democratic control even though in practice employers' views are better represented in the system than those of employees.

  2.3  The Minister for Health and Safety has ministerial responsibility for the work of the Health and Safety Commission and the Health and Safety Executive on behalf of the Secretary of State for the Department of Work and Pensions. The Secretary of State is responsible for the exercise of the powers on which the administration of the Health and Safety Commission and the Health and Safety Executive depends and is accountable to Parliament for all the policies, decisions and actions of the Commission and the Executive. He transmits the recommendations of the Commission to Parliament, answers Parliamentary questions about the Commission, and nominally appoints the Commissioners. The publication of Revitalising Health and Safety saw the Health and Safety Commission begin to develop a new role and form a new relationship with the Health and Safety Executive. This new role was approved of and encouraged by the Secretary of State for Work and Pensions in 2004 when Ministers set out their expectations of the role of Commissioners in a letter to them. Issues of corporate governance have now become more important. The relationship between each non-departmental public body and its sponsor department is clearly defined and supports the degree of delegation and independence granted to the body, whilst ensuring propriety, regularity and value for money, and that risks are properly managed.

  2.4  The freedom of the Health and Safety Executive to impose regulations is constrained by the Health and Safety Commission which must approve such regulations before they are presented to the Secretary of State who in turn lays them before Parliament. The Commission has extensive powers, but they are all subject to ministerial approval. Nevertheless, this mechanism gives the agency, which is unelected, the de facto power to make criminal laws, since Parliament rarely debates its regulatory proposals. Members of Parliament have the power to ask questions in Committee or on the floor of the House but more and more over the last 20 years we have seen the initiative being taken through the EU.

  2.5  The Health and Safety Commission and the Health and Safety Executive must evolve to meet the formidable difficulties which confront them. The proposal to form a new Merged Body ostensibly reduces the autonomy of the Health and Safety Executive, which is, in fact, in accord with the recommendations of the Robens Committee. A fragmentation of focus for the Merged Body may result in significant national economic problems, given the ramifications of any failure of the Merged Body to function effectively and efficiently. A cohesive unitary board comprising executive and non-executive members, remains the best pattern. Sir Christopher Hogg, chairman of the Financial Reporting Council, has recently said "Non-executives need the input of executive directors to improve their understanding of the company, and board experience was also valuable for senior managers." (Financial Times 31 December 2007) The need for a balance between executives and non-executives has been incorporated into the combined code on corporate governance for companies listed on the London Stock Exchange. Similar standards should be put in place for the public sector. The minimal role likely to be accorded to local authorities is to be regretted. Local authorities have much to offer in terms of knowledge, experience and resource, and they could contribute much at the strategic level to help meet the challenges of the 21st century.

3.   The legislative framework

  3.1  Are EU directives interpreted and translated by the Health and Safety Commission into UK law appropriately?

  3.2  I am the joint author of a book (with Professor Alan C Neal): The European Communities' Health and Safety Legislation Chapman and Hall, London 419 pp 1992 ISBN 0 412 46690 2. I have recently given advice to the Health and Safety Executive on the transposition of European Union health and safety Directives into United Kingdom law and served as a British Government Adviser in ECJ Case No C-127/05: Commission of the European Communities v United Kingdom. I have also recently undertaken work for the Health and Safety Executive, in conjunction with Professor Alan Neal of the University of Warwick, on A survey of changes in the volume and composition of claims for damages for occupational injury or ill health resulting from the Management of Health and Safety at Work and Fire Precautions (Workplace) (Amendment) Regulations 2003. This report can be found at: http://www.hse.gov.uk/research/rrpdf/rr593.pdf

  3.3  The European jurisdiction has largely superseded the United Kingdom in setting the substance of health and safety regulation. The sheer quantity of directives has transferred the policy agenda from the United Kingdom to the EU level. EC health and safety legislation should undergo a thorough review. A clear policy needs to be developed for EC health and safety regulation.

  3.4  It is now recognised that the whole area of health and safety regulation at EC level introduced since the passage of the Single European Act in 1986 and largely completed by 1994 was poorly planned and inadequately considered. More clarity and consistency is required. Legislation at this level has been poorly drafted. Interpretation is difficult as was seen in ECJ Case No C-127/05: Commission of the European Communities v United Kingdom. The lack of transparency at EC level has serious consequences for the United Kingdom where self-regulation is the prevailing philosophy. The German 2007 EU Presidency pledged to improve regulation in occupational safety and health. A systematic evaluation of European occupational safety and health directives was conducted to determine whether the objectives of the directives were appropriate and the policy instruments used in them "capable of achieving the intended positive effect in the reality of the workplace". The EU Commission is now poorly staffed in this area. Significant changes are therefore unlikely.

  3.5  The United Kingdom is a founder member of the International Labour Organisation. Based from the beginning (1919) on the inseparability of peace and social justice the aims and principles of the ILO were re-affirmed and strengthened by the Declaration of Philadelphia (1944) which brought the organisation into the struggle against poverty and insecurity. The ILO promulgates international labour standards, amongst which are those related to Article III (g) of the Philadelphia Declaration—"adequate protection for the life and health of workers in all occupations". ILO Conventions have considerable regulatory effect.

  3.5  Section 1 (2) Health and Safety at Work etc., Act 1974 permits statutes, regulations, orders and other instruments to be progressively replaced by a system of regulations and approved codes of practice operating in combination with the other provisions of Part 1 and designed "to maintain or improve standards" established by or under those enactments. The reference to the maintenance and improvement of standards was added to the Bill by the Government to allay the fears that the old standards might be relaxed in the new laws. (Parliamentary Debates HC 18 June 1974, col 306.)

  3.6  Implementation is the process of taking standards set within the European Directive and putting them into Great Britain's law. This process is also known as transposition. A directive is published in the Official Journal of the European Community with a deadline for implementation, which is usually three years. The Health and Safety Executive produces a Consultation Document with draft regulations. There is a three month consultation period, where the Consultation Document is issued to the Health and Safety Executive consultation directory and anyone who requests it from the HSE/C website. The comments are then analysed and discussed with stakeholders. The amended Regulations are recommended to UK Ministers by the HSC. The Ministers then sign the regulations, they are laid before the UK Parliament and come into operation. The British Government must show that existing/ new legislation provides the same standards as set out in the European Directive. The European Commission (EC) will seek an implementation report from Member States after the agreed implementation date.

  3.7  The Davidson Review on the Implementation of EU legislation reported to the Chancellor of the Exchequer in November 2006. The focus of the review was on the manner in which European legislation is implemented in the United Kingdom. The review found that properly assessing whether a particular piece of European legislation has in fact been over-implemented and whether or not over—implementation is justified is not straightforward. The assessment requires careful research into legislation and the policy reasons behind the UK's implementation, as well as consideration of how the legislation is being enforced in practice and the impacts it has on those being regulated.

  3.8  The Davidson Review said that "inappropriate implementation may not be as big a problem in the UK—in absolute terms and relative to other EU countries—as is alleged by some commentators. In Davidson's view the areas of health and safety he addressed illustrated justified examples of gold plating".

  3.9  Are director's health and safety duties appropriately covered by voluntary guidance?

  3.10  I am the author of Criminal Liability of Directors and Senior Managers for Deaths at Work Criminal Law Review [2007] December, 949-968, ISSN 0011 135X and an HSE Research Report published in 2007, with Professor Alan C Neal of the University of Warwick, entitled A survey of the use and effectiveness of the Company Directors Disqualification Act 1986 as a legal sanction against directors convicted of health and safety offences.www.hse.gov.uk/research/rrhtm/rr597.htm. I have recently served as an independent member of the Institute of Directors/Health and Safety Commission Steering Group on Directors Responsibilities for Health and Safety. www.iod.com/intershoproot/eCS/Store/en/pdfs/hse_guide.pdf

  3.11  The new IoD/HSC guidance was published on 29 October 2007. This guidance sets out an agenda for the effective leadership of health and safety. It is designed for use by all directors, governors, trustees, officers and their equivalents in the private, public and third sectors. It applies to organisations of all sizes. In considering the liability of an organisation under the Corporate Manslaughter and Corporate Homicide Act 2007, a jury must consider any breaches of health and safety legislation and may have regard to any health and safety guidance. This guidance could be a relevant consideration for a jury depending on the circumstances of the particular case. Similar considerations will apply for prosecutions under the Health and Safety at Work etc., Act 1974. It is, of course, too early to assess the impact of this guidance.

  3.12  The issue of director responsibility has been the subject of continuing discussion in many leading common law and commonwealth jurisdictions and we have recently been sharply reminded of its continuing importance and relevance. In March 2005, BP, then Europe's second biggest listed energy group and Britain's largest company, suffered a massive explosion at its Texas City plant in the United States. Fifteen employees were killed and one hundred and seventy were injured. It was the United States' biggest industrial accident in a decade. Joe Barton, Chairman, US Congressional Committee on Energy and Commerce wrote to Lord Browne of Madingley, then Chief Executive of BP, saying that the state of the infrastructure of BP's Alaskan oilfield and the deaths at BP's refinery in Texas City last year called into question the company's commitment to safety. BP executives were summoned to appear before the Investigations and Oversight Sub Committee of the Congressional Committee on Energy and Commerce in September 2006. BP entered into a settlement with the US Occupational Safety and Health Administration (OSHA) to resolve more than 300 separate alleged violations of OSHA safety regulations. BP paid a fine of $21.4 million and agreed to a number of corrective actions. This is the largest fine in the history of the US Occupational Health and Safety Administration. BP also set aside $2 billion in compensation and has reached settlements with many of the injured and bereaved. It is clearly the task of the Government of the United Kingdom to set standards of health and safety management and operation for multi-national companies which are registered on the London Stock Exchange and which have a UK Headquarters.

  3.13  The growing pressure on the boardroom to embrace higher standards of corporate governance spreading from the United States, in the wake of financial scandals, also arises from the Turnbull Guidance which was published in September 1999. The latter had a long gestation following the harrowing experiences of the "Maxwell period" and was the first in a recent line of new guidelines and regulations aimed at businesses taking risk more seriously. Endorsed by the London Stock Exchange, it places responsibility for managing risk firmly upon senior directors. Financial markets attach increasing importance to corporate governance as a central touchstone in the evaluation of good management and hence of the company. Listed organisations must now demonstrate to shareholders that they have assessed the risk attached to their all assets and activities, and that they have taken action to limit or remove their exposure to risk in each area. The Companies Act 2006 is an important development in this regard. Directors now have a duty to promote the success of the company for the benefit of its members. This replaces the common law duty to act in good faith in the company's interests. The duty to promote the company's success will involve considering, amongst other factors the likely long term consequences of a decision; the interests of the company's employees; relationships with the company's trading partners; the effect of the company's operations on the community and the environment; the desirability of maintaining the company's reputation for high standards of business conduct; and the need to act fairly as between members. Directors will only be liable to the company or its shareholders on behalf of the company, for breach of this duty if the company can demonstrate that it has suffered loss as a result of the breach. The Act also makes reporting on environmental and social activities mandatory for companies listed on the London Stock Exchange. These developments were perhaps foreseen by Lord Justice Hoffman in Bishopsgate Investment Management Ltd v Maxwell (No 2) when he acknowledged that the law "may be evolving in response to changes in public attitudes to corporate governance." Perhaps it should be noted at this point that an objective of good governance is to promote strong, viable and competitive corporations which facilitate better internal and external communication and improved transparency of operation. It is now generally accepted that boards of directors are stewards of the corporation's assets and their behaviour should be focused on adding value to those assets, enhancing shareholder value, protecting their workforce and safeguarding those who might be adversely affected by the firm's activities. As has been said elsewhere, "acceptable levels of safety at work cannot be achieved simply through the activities of specialist functions, but only by the incorporation of safety standards into general management objectives." The board must have the influence, power and resources to take initiatives and set the pattern. Moreover, the board must be effective. Positive policy objectives must be accompanied by clear allocation of responsibilities within the management structure. As the 2006 Act has maintained s 37 Health and Safety at Work etc, Act 1974 and has not amended it, it is therefore essential that the impact and wording of s 37 be examined. It is clear that this provision offers considerable potential for a greater use of the prosecution discretion in the exercise of this power.

  3.14  The current law provides for individual liability for health and safety offences, including deaths at work in s 37 of the Health and Safety at Work etc, Act 1974. Directors and officers of corporations owe statutory duties to their corporation, their employees and the public at large.

3.15  Sanctioning

  Typically, the penalty will be a fine. However, there is a trend of seeking to broaden the range of sanctions available to enforcement agencies. These might, for example, provide incentives to comply with the law; enhance the role of victims; offer more restitution to the business community and employees; or help ensure that lessons are learnt and offences are not repeated. The Health and Safety Commission (HSC) has published a guidance note and a revised enforcement policy, which encourages not only the individual prosecution, but also the disqualification, of directors following conviction. Section 2 of the Company Directors Disqualification Act 1986 gives the court the power to make a disqualification order in relation to a person who has been convicted of an indictable offence in connection with the management of a company. The maximum period for disqualification under section 2 is five years where the order is made by a court of summary jurisdiction, and 15 years in any other case. I propose that for deaths at work the investigation should be carried out by a new specialist trained independent inter disciplinary team of experienced and competent staff.

4.   Resources

  4.1  Does the HSE have sufficient resources to fulfil its objectives as the health and safety regulator and meet its PSA targets?

  4.2  The resources available to the Health and Safety Commission and the Health and Safety Executive are insufficient and as a consequence are spread too thinly. In real terms the budget for HSE for 2005-06 is 1.3 times the budget out-turn for 1975-76, its first year of operation. The volume of legislation, the wide range and deep complexity of the issues which must be managed by the Health and Safety Commission and the Health and Safety Executive justifies an increase in their budgets of some 25-30%.

  4.3  The Communication from the Commission of the European Communities to the Council and the European Parliament (COM (2007) 62 Brussels, 21 February 2007 entitled Improving quality and productivity at work: Community strategy 2007-12 on health and safety at work states that an ongoing, sustainable and uniform reduction in accidents at work and occupational illnesses continues to be the prime objective of the Community strategy for the period 2007-12. Health and safety at work is now one of the most important and most highly developed aspects of EU policy on employment and social affairs. The European Community's health and safety at work policy argues for real wellbeing at work, be it physical, emotional or social, which is more than merely the absence of occupational accidents or diseases. These issues must be addressed in the context of changes taking place at work: feminisation and ageing of the working population, diversification of the forms of employment (temporary work, atypical working hours, teleworking, etc.), and an increase in certain social risks (stress, depression, harassment, intimidation, violence, etc.). The enormous economic costs of problems associated with health and safety at work inhibits economic growth and affects the competitiveness of businesses. A considerable share of these costs also falls upon social security systems and public finances.

  4.4  The Hampton Review (Reducing Administrative Burdens effective inspection and enforcement HM Treasury March 2005) which was accepted by the Government, believed that the Health and Safety Executive should expand to cover other bodies with a similar remit, including aspects of public safety.

  The review believed that the Health and Safety Executive should expand to take in:

    —    The Adventure Activities Licensing Authority.

    —    The Gangmasters Licensing Authority.

    —    The Engineering Inspectorate.

    —    The inspection functions of the Coal Authority.

  On 1 June 2007 REACH came into force. The Health & Safety Executive have been given the enforcement responsibility. The Health and Safety Executive must have the capacity to address new challenges, for example, the explosion and fire at Buncefield, the outbreaks of Foot and Mouth disease and Hospital Acquired Infections. A significant level of resources, which have not yet been provided, will be needed address these responsibilities.

  4.5  The Health and Safety Executive's Major Hazards Strategic Programme is responsible for regulating and assuring the safety of those industries where failure to manage risks to health and safety can lead to a catastrophic incident. These industries include nuclear, offshore oil and gas, chemical manufacture and storage, mining, explosives, diving at work, dangerous pathogens and genetically modified organisms.

  4.6  PSA targets have been set for pro rata reductions in incidence rate for fatal and major injuries, for ill health incidence and for working days lost. Currently the Health and Safety Executive is on track to meet targets for fatal and major injuries but not on track to meet the targets for ill health incidence and for working days lost. The HSE does not have sufficient resources to fulfil its objectives as the health and safety regulator and meet its PSA targets. It should be noted that apart from fatal injuries many of the statistics used as a benchmark are unreliable because of known under—reporting.

  4.7  The Chief Executive advised the Committee last November that if budgets were reduced too far "enforcement [of regulations] could not be maintained". He continued "We have a genuine dilemma over limited resources." It has been reported by the Financial Times on 29 November 2007 that "The HSE has already cut its staff by 13% since April 2003—the equivalent of more than 500 full-time posts. In a further attempt to make savings, it is closing its London headquarters and moving to its operational centre in Bootle, Merseyside. The HSE fears its finances could be further reduced as a result of spending cuts imposed on its paymaster, the Department of Work and Pensions, which has been told by the Treasury to reduce its budget in real terms by 5% a year for the next three years."

  4.8  The peak period for staff resources was between 1977-1982 when the figure reached 4,169. Today the figure is under 4,000. Some 250-350 jobs are likely to be shed by April 2008 to satisfy budgetary restraints notwithstanding that greater demands are being made of the service today than ever before.

  4.9  The task of ensuring the health and safety of work of workpeople and those who might be affected by their activities is more difficult because of a growing labour force. In 1977 the total labour force in the United Kingdom was 23.339 million. By 2007 the total labour force in the United Kingdom had reached 29.29 million. Large-scale immigration is now seen as essential for the UK's economic well-being, and measures have been introduced to increase inflows. The benefits claimed include fiscal advantages, increased prosperity, a ready supply of labour and improvements to the age-structure.

  4.10  The difficulties surrounding a growing labour force, with a number whose first language is not English, is compounded for the HSE in its aim to meet the PSA target because many areas of health and safety are the responsibility of other organisations.

  4.11  The Health and Safety Executive faces a formidable challenge in the communication of "its message" to small businesses. Over 90% of the 3.5 million businesses in Great Britain employ fewer than 10 people.

  4.12  Transport safety (air, rail, road and sea) is the responsibility of the Department for Transport and its agencies, Fire prevention and public safety are the responsibility of the Department for Communities and Local Government and the Home Office; Pesticide Safety and emissions from workplaces are the responsibility of Defra/Environment Agency and the National Radiological Protection Board is part of the Health Protection Agency. Occupational health is a shared responsibility between the Department of Health, Department for Work and Pensions, the Health and Safety Commission and the Health and Safety Executive. Health is a devolved responsibility in Scotland. Over 400 local authorities enforce the Health and Safety at Work etc., Act 1974. The UK's services sector, a good proportion of which is the de facto enforcement responsibility of local authorities, accounts for around 70% of the economy. The sector has the fastest rate of employment growth.

  4.13  Women now make up just under half the workforce and certain types of occupational illness are becoming more common (musculoskeletal disorders, infections and illnesses associated with psychological stress). The nature of occupational hazards is changing in tandem with the acceleration of innovation, the emergence of new risk factors (violence at work, including sexual and psychological harassment, and addictions) and the transformation of work patterns. An ageing workforce is also a significant factor in any examination of health-related problems in the workplace. The Health and Safety Executive may not have the skills in sufficient numbers to address these occupational health issues.

  4.14  Efforts must continue to secure more and better worker involvement in health and safety risk management by raising awareness, influencing attitudes and changing behaviours.

5.   Inspection, enforcement and prosecutions

  5.1  Are penalties for health and safety offences proportionate?

  5.2  Section 33, Health and Safety at Work etc, Act 1974, which creates the offences under the Act, specifies 15 categories of offence. Some of these are major substantive offences, such as failure to discharge one or more of the general duties in sections 2-7, or to contravene sections 8 or 9, or any health and safety regulation made under the Act (including a requirement or prohibition in such regulation). Contravention of any requirement or prohibition imposed by an improvement notice or prohibition notice is also made an offence, thereby showing that the administrative sanctions exercisable by inspectors are ultimately dependent upon enforcement through the criminal law.

  5.3  In common with criminal offences generally, the offences under the Act differ according to their gravity. The most serious offences are indictable, that is triable by judge and jury in the Crown Court which has wide powers of punishment. Following the Criminal Law Act 1977 offences which are not triable only summarily are indictable offences. Section 33 is framed in flexible terms so that most of the offences render the offender liable:

    (a)  on summary conviction to a fine not exceeding Level 5 on the standard scale or in some cases £20,000.

    (b)  On conviction on indictment:

    (i)  to imprisonment not exceeding two years, or a fine, or both, for certain offences; and

    (ii)  to a fine.

  Orders may also be made to disqualify directors under the Company Directors Disqualification Act 1986 for a period up to but not exceeding 15 years (The penalty for breaching such an order is a term of imprisonment of up to two years). The court may also make an order that a person convicted of an offence must take steps to remedy any matters which it is in his power to remedy. (Section 42, Health and Safety at Work etc, Act 1974).

  5.4  It is not the policy of the Health and Safety Executive to prosecute for every breach of health and safety law which comes to its notice. The criteria which fortify a decision to prosecute are (1) deliberate flouting of the statutory provisions, (2) recklessness of employers and others in exposing people to hazards and (3) a record of repeated infringements by the person concerned. Naturally, the Health and Safety Executive is particularly concerned with those cases in which death or serious injury has resulted from non-compliance with the law or in which persons have been exposed to serious hazards notwithstanding that no actual injury has resulted. Proceedings for an offence under Part 1 or the relevant statutory provisions can only be instituted in England and Wales by an inspector or by or with the consent of the Director of Public Prosecutions.

  5.5  In deciding between summary prosecution or prosecution for the majority of offences which are triable on indictment, the factors affecting the decision are (1) the gravity of the offence, (2) the adequacy of the powers held by the summary court, and (3) the record of the accused and his responsiveness to advice.

  5.6  Trials on indictment in Crown Courts for the more serious offences have resulted in substantial fines but fines for offences tried summarily have been criticised for their leniency for much of the time that the Health and Safety at Work etc Act 1974 has been in force.

  5.7  For both individual and corporate offenders, the level of fine should reflect the extent to which the offender fell below the required standard. The sentence should also take account of any economic gain from the offence; it should not be cheaper to offend than to take the appropriate precautions.

  5.8  The Court of Appeal has said that the following factors are relevant when sentencing corporate offenders:

    —    the fine must be substantial enough to have a real economic impact which, together with the bad publicity arising from prosecution, will bring home to both management and shareholders the need to improve regulatory compliance;

    —    appropriate fines for large companies might be beyond the summary fines limit. In such circumstances the case should be dealt with in the Crown Court. Where larger companies are dealt with in a magistrates' court, the court should look to a starting point near the maximum fine level and then consider aggravating and mitigating factors;

    —    care should be taken to ensure that fines imposed on smaller companies are not beyond their capability to pay. The court might not wish the fine to result in the company not being able to pay for improved procedures or to cause the company to go out of business. Where necessary, the payment of fines could be spread over a longer period than the usual 12 months;

    —    there is no single measure of ability to pay in respect of corporate offenders; turnover, profitability and liquidity should all be considered. It is not usual for an expert accountant to be available in summary cases; and

    —    if a company does not produce its accounts, the court can assume that the company can pay whatever fine the court imposes.

  5.9  When sentencing public authorities, the court may have regard to the fact that a very substantial financial penalty may inhibit the performance of the public function that the body was set up to fulfil. This is not to suggest that public bodies are subject to a lesser standard of duty or care in safety matters, but it is proper for the court to take into account all the facts of the case, including how any financial penalty will be paid. (R. v. Southampton University Hospital NHS Trust [2006] EWCA Crim 2971 (CA).

  5.10  Other sentencing options:

    —    A discharge will rarely be appropriate in these cases.

    —    Compensation must be considered if there is a specific victim who has suffered injury, loss or damage.

    —    Where the offender is a director or senior manager of a company the court may be able to exercise its power of disqualification under the Company Directors Disqualification Act 1986.

    —    The prosecution will normally claim the costs of investigation and presentation. These may be substantial and can incorporate time and activity expended on containing and making the area safe.

  5.11  The starting points for determining the correct level of sentence in any given health and safety case are set out in R v F Howe & Son (Engineers) Ltd [1999] 2 Cr App Rep (S) 37 (CA) and R v Balfour Beatty Infrastructure Services Ltd [2006] EWCA (Crim) 1586 (CA), see the Crime and Disorder Act 1980.

  5.12  As a matter of general principle "The objective of prosecutions for health and safety offences in the work place is to achieve a safe environment for those who work there and for other members of the public who may be affected. A fine needs to be large enough to bring that message home where the defendant is a company not only to those who manage it but also to its shareholders." "Failure to fulfil the general duties under the Act are particularly serious as those duties are the foundations for protecting health and safety" "...it is impossible to lay down any tariff or to say that the fine should bear any specific relationship to the turnover or net profit of the defendant. Each case must be dealt with according to its own particular circumstances."

  5.13  The relevant factors are:

    (a)  In assessing the gravity of the breach it is helpful to see how far short the defendant fell from doing what was reasonably practicable.

    (b)  When death or serious injury results from the breach. The court acknowledged that it is often a matter of chance whether death or serious injury results from even a serious breach, but added that death resulting from any breach was to be regarded as an aggravating factor.

    (c)  The court held that an offence is seriously aggravated where the defendant has deliberately profited from a failure to take necessary health and safety measures or run a risk to save money.

    (d)  The degree of risk and the extent of the danger created by the offence.

    (e)  The extent of the breach, ie whether it was an isolated incident, or whether it had been continuing for a period of time.

    (f)  A failure to heed warnings from the enforcement authority is another aggravating factor.

    (g)  Particular mitigating factors will include prompt admission of responsibility and a timely plea of guilty; steps to remedy deficiencies after they are drawn to the defendant's attention; and a good safety record.

  5.14  In 2005-06 the number of offences prosecuted by the Health and Safety Executive decreased by 23% to 1,012 from 1,320 in 2004-05 and 1,720 in 2003-04. The number of convictions decreased by 28% in 2005-06 to 741 from 1,025 in 2004-05. In 2006-07, the number of offences prosecuted by HSE increased to 1,141, from 1,056 in 2005-06. The number of convictions increased in 2006-07 to 848. The average penalty per conviction in 2006-07 was £15,370. If fines in excess of £100,000 are excluded, this gives an average of £8,723.

  5.15  In 2004-05 there were 332 offences prosecuted by local authorities a decrease of 19% compared with 2003-04. The number of convictions decreased by 21% in 2004-05 to 281 from 354 in 2003-04. In 2004-05 the proportion of offences prosecuted that led to conviction was 85%. The average penalty per conviction in 2004-05 was £5,899. The figure includes one fine of £300,000 which, when removed, gives an average of £4,848.

Professor Frank Wright

January 2008





 
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