A record fine of £13.5m was imposed on maintenance company Balfour Beatty and Network Rail at the Old Bailey in early October, following the Hatfield rail crash in 2000 which killed four passengers and injured 102 others. The defendants were also ordered to pay prosecution costs of 600,000, after the court heard what the judge described as one of the worst cases of sustained industrial negligence in 30 years.
The courts have given a clear signal that health and safety breaches of this gravity will be severely punished, with the Hatfield case coming hard on the heels of another high-profile prosecution in August, in which the High Court in Edinburgh fined gas supplier Transco 15m pounds, over the Larkhall gas explosion in 1999. The incident killed a family of four who were asleep in their house at the time of the explosion.
Both cases demonstrate a dramatic shift in the level of fines for breaches of the Health and Safety at Work Act 1974.
Before Transco, the previous record fine was 2m, imposed on Thames Trains in 2004, following the Paddington rail crash, which killed 31 passengers and injured more than 400.
Historically, fines for health and safety breaches have, in general, been very low. According to the most recent Health and Safety Executive (HSE) figures for 2003-04, the average fine imposed was 9,858.
Significantly, in both the Hatfield and Larkhall cases, the prosecution originally attempted to prosecute the defendant companies for manslaughter – culpable homicide in Scotland.
These charges were thrown out by the courts, as the prosecution was unable to prove the identity of a ‘controlling mind’ within the companies, who could be said to be responsible for the breaches.
The Hatfield prosecution also broke new ground when the Crown attempted to prosecute 12 individual managers and officers – ranging from senior directors to a track engineer – for health and safety offences and, in some cases, manslaughter. Ultimately, however, all of these charges were either dismissed or resulted in acquittals.
But the failure of the manslaughter prosecutions will undoubtedly add fuel to the ongoing corporate killing debate. In 2002-03, the police referred 253 manslaughter cases to the Crown Prosecution Service. Only 69 of these led to prosecutions, resulting in a mere 18 convictions. Furthermore, all the convictions were either against individuals or very small companies. Interestingly, no large company has ever been convicted of corporate manslaughter.
Corporate Manslaughter Bill
However, this could be about to change. As a result of a long campaign for reform, starting with the Law Commission Report in 1996, the draft Corporate Manslaughter Bill was finally published by the Government in March this year.
Under the draft Bill, an organisation will be guilty of the new offence of corporate manslaughter if senior managers organise any of its activities in a way that causes a person’s death through a gross breach of duty of care. A gross breach is defined as conduct that falls far below that which could reasonably be expected, with an unlimited maximum penalty.
In deciding whether a breach has been ‘gross’, a jury will have to consider whether the organisation failed to comply with health and safety law or guidance. It will also have to decide whether the senior managers knew, or ought to have known, that the organisation was failing to comply with such law and that this posed a risk of death or serious injury. Finally, senior management must be found to have sought for the organisation to profit from the failure.
The Bill has been the subject of considerable criticism and it is likely to be vigorously debated as it proceeds through Parliament this year.
Because it does not apply to individuals, the new law would not give the courts the ability to impose prison sentences.
Furthermore, the conduct of the defendant is focused on the actions of senior management, rather than the management chain as a whole. It also only applies to corporations, not unincorporated bodies such as partnerships and charities.
These factors could reduce the impact of the new law. Indeed, according to the Government’s own impact assessment, it is anticipated that only five extra cases a year would be brought if the Bill becomes law.
As the debate proceeds, there seems to be little doubt that the size of the fines in the Hatfield and Larkhall cases will raise a more fundamental question: is the new Bill is required at all? It is widely thought that the existing provisions of the Health and Safety at Work Act, if properly enforced, are sufficiently far-reaching to enable the courts to properly deal with breaches by both companies and individuals.
Regardless of whether the Bill becomes law, these cases have signalled a significant change in the attitude of the courts and all employers should strive to ensure that health and safety issues are given the highest priority.
David Leckie is a partner, specialising in health and safety, at Maclay Murray & Spens
Guidelines for preventing liability
- Make sure a comprehensive safety management system is set up, followed and reviewed regularly. The Health and Safety Executive recommends appointing a director responsible for health and safety at board level. All relevant safety policies, procedures and information must be cascaded throughout the organisation and staff must be properly trained and supervised
- Risk assessments must be ‘suitable and sufficient’, carried out by a ‘competent’ person and regularly reviewed. Specific risk assessments must be carried out for concerns such as asbestos, stress, working at height, noise and hazardous substances. Young people and new or expectant mothers must also be considered in this respect
- Make sure health and safety is properly managed throughout the organisation, with clear and transparent lines of reporting so everyone knows precisely what their obligations and responsibilities are. These lines should also be clearly set out in contractual documents where contractors or subcontractors are used
- Keep abreast of changes to the law, including approved codes of practice, guidance and recognised industry standards
Never put profit before safety
- Keep records of safety-related matters (inspection reports, safety audits, etc)
- Encourage an open safety culture
- Where competency does not exist in-house, ensure that reputable external consultants are used
- Try and build a good relationship with local HSE inspectors