No area of risk management is more vulnerable to myth-making than health and safety. At the same time, it is a very serious business; failure to manage the evolving risks has increasingly costly repercussions. David Adams reports

The briefest look at recent Health and Safety Executive (HSE) cases will show you that while the clipboard-wielding safety inspector may have become a popular bogeyman, organisations in every sector face a horrifyingly huge range of accident and illness risks. Health and safety issues continue to represent significant risks to organisations’ finances and reputations; as well as to the liberty of individual executives.

New guidelines for the sentencing of firms and individuals found guilty of health and safety offences came into force in February 2016. These were designed to take into account the culpability of an organisation, the actual harm caused and – crucially, from a financial point of view – an organisation’s turnover.

The inflationary impact of the new guidelines has been noticeable. During the 12 months following their introduction the total value of fines imposed increased by 80 per cent. More than 25 organisations have been fined £1 million or more since the guidelines were changed, with the biggest fine of all being the high-profile £5 million that Merlin Attractions were found liable to pay in 2016 following the 2015 Alton Towers Smiler rollercoaster crash.

The guidelines apply to sentences imposed since February 2016, regardless as to when the offence in question took place. More recent examples have included a £1.4 million fine imposed on Tata Steel in February 2018 following the death of a contractor in April 2010.

The number of company directors receiving immediate or custodial sentences also increased significantly during 2017, although prosecutions resulting in such sentences are still unusual: there were immediate custodial sentences in six per cent of prosecutions during 2017, up from four per cent a year earlier; while the proportion of prosecutions leading to suspended sentences increased from six per cent to 12 per cent. It was notable than more than half of all breaches of gas safety regulations resulted in immediate or suspended custodial sentences.

Sally Roff, partner and head of the national safety, health and environment team at legal firm DAC Beachcroft, suggests that these changes are having a noticeable impact on attitudes to health and safety. “Whereas in the past some fines were regarded as a cost of doing business, now they have the potential to cripple your organisation, because they’re based on turnover,” she says.

The way the guidelines are applied is still being bedded down: in January 2018 white goods manufacturer Whirlpool successfully reduced a £700,000 fine to £300,000 on appeal, in relation to a case involving a fatality. But pursuing such an appeal will also increase legal costs which will include paying the HSE’s costs for the initial case under the latter’s Fees for Intervention (FfI) regime.

The possibility of incurring such costs also has implications for the extent of insurance cover an organisation should be seeking. Roff says there has also been a noticeable shift on the part of some organisations towards use of specialist legal support rather than relying on EL or PL policies as the primary means of protection against health and safety prosecutions.

We also saw in 2017 the Sentencing Council complete a consultation on sentencing guidelines for manslaughter offences, approval of which is expected this year. This is likely to lead to tougher sentences for these offences, particularly for gross negligence manslaughter. Until now, the average sentence for the latter offence was three years and eight months, but the draft guidelines suggest a new guideline of eight years for high culpability and four years for medium culpability defendants.

Stephanie McGarry, partner and specialist in health and safety at legal firm Browne Jacobson, expresses surprise that a very clear increase in the size and frequency of fines does not appear to have made an impression in some boardrooms. “There are some boards...that still aren’t aware of the impact of this – there’s still some publicising of these changes needed,” she believes.

The other primary areas of focus for the HSE is occupational health, encompassing work-related stress, occupational diseases and musculoskeletal disorders, addressed in the HSE’s Go Home Healthy campaign. It has released new guidance on manual handling and the assessment of repetitive tasks, with the aim of encouraging organisations to reduce the need for manual handling whenever possible, through design, use of equipment or other means. Where manual handling is necessary, there is a drive to encourage organisations to use specific, rather than generic assessment and training methods.

The Go Home Healthy campaign also focuses on reducing work-related stress, with further momentum being provided by an increase in media attention of the issue in
recent months.

It is unclear how many resources HSE will dedicate to enforcement of measures designed to help protect employees’ mental health. There have been no prosecutions related to it to date, although there have been a small number of improvement notices issued in relation to work-related stress.

“It will be interesting to see if mental health becomes an area of enforcement for the HSE,” says Gavin Reese, partner and health and safety specialist at law firm RPC. Meanwhile, head of health and safety at the firm, Nick McMahon, notes that the HSE appears to be focusing on encouraging organisations to approach occupational health issues using proactive, preventative strategies – but also that proving culpability in these cases can present difficulties. “There does not appear to be any plan for the HSE to change its current approach of minimal enforcement, although in the longer term it is possible that will change,” he suggests.

Changing with the times

Roff believes one other set of risks that the HSE might want to focus attention on are those related to the use or misuse of new technologies. This might include risks related to the management of hazardous chemicals in industry, for example. Roff opines that increased use of automation and artificial intelligence technologies could make this a more pressing issue for a wider range of organisations in future. She cites a recent example of a DAC Beachcroft client case: a manufacturer that experienced problems when some of its equipment was made dangerous as a result of a software incompatibility problem.

The primary messages around health and safety risks are unchanged: be prepared; do more than pay lip service to these risks. “Employers can spend a lot of time drafting complex health and safety policies and manuals that give the illusion of control,” says Chris Ivey, consultant director, health and safety at consultancy THSP Risk Management. “Instead, employers should be looking at the risks in their workplaces and engaging with employees to implement sensible measures to eliminate or reduce the likelihood of harm occurring.”

At RPC, both Reese and McMahon see reasons for optimism in the health and safety arena. “Since the introduction of the new sentencing guidelines, I think health and safety has gone further up the corporate agenda and companies would be well-advised to look at what their insurance coverage provides,” says Reese. McMahon notes a healthy increase in the use of risk management technology to help prevent problems arising in the first place, with a greater emphasis on better communication between the board and the workforce.

It is important for managers working in all organisations to take an active, constant improvement approach to health and safety, including ensuring that even very experienced employees are given all necessary supervision and training.

Organisations should also keep up to date with the extensive libraries of guidance and other resources available on the HSE website, including sector-specific guides.
In the boardroom, the increased risk of significant financial damage and the possibility of custodial sentences should be concentrating minds, says Roff. “There should be an increased focus on getting things right,” she says. “Noone wants to be in court defending health and safety negligence or corporate manslaughter charges. In the past, health and safety professionals may have had a hard time getting investment from the board. I think it’s probably a little bit easier at the moment.”


This article was published in the May 2018 issue of CIR Magazine.

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