Special Ridout Report April 2017 – Health and Safety Sentencing Guidelines – a turbulent first year for defendant companies

Lessons and learnings for providers

In 2015/2016 the 660 highest fined defendants clocked up approximately £39m in fines. After the courts began applying the health and safety sentencing guidelines in 2016/2017, it took only the 20 highest fined defendants to accumulate the same level of fines. It took over 30 times as many defendants before the guidelines, than after, to rack up this level of fines.

It is hard to overstate the impact of the sentencing guidelines that judges have applied since 1 February 2016 to defendant companies, guilty of health and safety breaches. The guidelines were intended to bring consistency to sentencing while ensuring that the level of fines cause enough financial pain to company directors and shareholders. The message being that it is preferable for companies to do everything they can to comply than to face paying a fine.

Approach of sentencing judges

Rather than consistency in sentencing, lawyers practising in the field have observed different sentencing judges applying the guidelines in different ways; some emphasising culpability and harm, others focusing on the size of the defendant company and yet others going outside of the fine ranges in the guidelines and focusing on the ‘fairness’ of the fine.

For large companies (turnover of £50m and over) and medium companies (turnover of £10 to £50 million) it is becoming the norm for the more serious breaches to attract fines in the millions of pounds. Companies in the health and social care sectors have not escaped being hit by such large fines. For companies of all sizes, the fines may put them out of business. The guidelines state “in some cases this might be an acceptable consequence”.

£20 million fine

The similarly structured sentencing guidelines for environmental offences began to apply 18 months before the health and safety guidelines. In March 2017, we saw Thames Water fined a huge £20 million for polluting a river and there is nothing preventing a sentencing judge from imposing similarly high fines for health and safety breaches by very larger companies.

Responsible companies with a good health and safety record facing an unexpected prosecution

It is fair to say that the directors and owners of most companies in the sector do their very best to meet the dizzying array of health and safety obligations. And rightly so. Responsible providers have board level leads for health and safety, internal health and safety specialists and teams, and most also engage the services of external health and safety consultants, at significant expense.

A responsible and committed approach to compliance can never guarantee safety. The law requires a company to have done all that was “reasonably practicable” but sadly, accidents sometimes occur even in environments managed by highly responsibly companies. Such companies are well placed to put forward a defence and/or good mitigation but especially where somebody has died, the guidelines still point judges towards a much higher fine than previously.

The responsible company may therefore be punished financially even though it is committed to compliance with its health and safety obligations.

 

As a care home provider or a healthcare provider, where do you stand in respect of health and safety investigations and prosecutions? The table below provides a breakdown as to which investigating and prosecuting body will take the lead in particular circumstances
Type of provider Subject matter Individual involved Lead Inspecting and Prosecuting body
Adult care homes, registered with CQC Safety and quality of treatment and care Patient / Service user CQC
Healthcare services, registered with CQC Safety and quality of treatment and care Patient / Service user CQC

 

Healthcare services not registered with CQC Health and safety Patient / Service user HSE
Adult care homes with nursing not registered with CQC Health and safety Patient / Service user HSE
Public social care services not registered with CQC Health and safety Patient / Service user HSE
Adult care homes without nursing not registered with CQC Health and safety Patient / Service user Local Authorities
All health and social care providers Health and safety Worker, visitor or contractor HSE / Local Authorities (depending on the activity undertaken)

 

In 2015/2016, HSE brought 586 prosecutions and local authorities 70. A handful of CQC prosecutions have also reached sentencing since mid-2016.

Some key considerations for providers

  1. Although the HSE has a conviction rate of approximately 95% this is largely because, before the guidelines, most defendants pleaded guilty as distinct from being found guilty after a trial before a jury.
  • Defendant companies should properly consider the alleged breaches and be prepared to defend themselves on the evidence. In view of the impact of the sentencing guidelines and of the effect of a conviction, there is little to be gained for companies by rolling over unnecessarily in the face of a prosecution.
  • In appropriate cases on the evidence, defendant companies continue to challenge allegations of health and safety breaches and continue to be found not guilty, following a trial before a jury;
  1. Consider very carefully their communications strategy: attempts to blame staff or the victim for alleged health and safety failings are likely to backfire with both the public and the judge. Very careful messaging is needed;
  1. If the evidence points to a guilty plea, ensure that an indication of the guilty plea is given to the court at the first hearing in the Magistrates Court. The new Reduction In Sentence for Guilty Plea definitive guideline will apply to all cases with a first hearing after 1 June 2017. The guidelines provide for a reduction in the fine by 1/3 if a guilty plea is indicated at the first hearing (subject to an exception which would still need to be raised at the first hearing), reducing to 1/10 if entered on the first day of trial and zero if during the trial.
  1. Be proactive in relation to mitigation: consider agreeing a Basis of Plea document with the prosecution and providing this and written Mitigation Submissions to the court as early as possible before sentencing.

 

 

 

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