Health & Safety Fines: Counting the cost

The financial consequences of breaching health and safety legislation are starkly illustrated by two recent cases where fines totalling £9m have been imposed by the Courts.

Network Rail pleaded guilty to a breach of Section 3 of the Health & Safety at Work Act 1974 (HSWA), in light of an investigation and prosecution brought by The Office of Rail & Road (ORR) subsequent to the death of an 82 year old woman on a level crossing in August 2011. On 21 September 2016 a fine of £4 million was imposed after a two day sentencing hearing at Ipswich Crown Court.

Section 3 imposes a duty on employers to conduct their undertaking in such a way as to ensure that those not in their employment are not exposed to risks to their health or safety.

Tragically, Olive McFarland was struck by a train travelling at 100 mph by a train travelling from London to Norwich at the Gypsy Lane crossing near Needham Market in Suffolk. The investigation undertaken by the ORR found that Network Rail had failed to act on what was described as “substantial evidence” that pedestrians were at increased risk of being struck by a train on the crossing due to concerns about the lack of visibility.

On the 27th September 2016 the owners of Alton Towers theme park, Merlin Attractions Operations Limited, were fined £5m plus costs of almost £70,000, again as a result of a breach of Section 3 of the 1974 Act.

The prosecution related to an incident which occurred in June 2015 when 16 people were injured, some seriously, following a rollercoaster collision.

An investigation undertaken by the HSE found “the root cause” of the accident to be “a lack of detailed, robust arrangements for making safety critical decisions”. Speaking after the sentencing of the company, Neil Craig, head of operations for HSE in the Midlands said “this avoidable incident happened because Merlin failed to put in place systems to allow engineers to work safely on the ride while it was running.”

The fact that both Defendants received such significant financial penalties is an inevitable consequence of the introduction of new Sentencing Guidelines which came into force on the 1st February 2016, regardless of the date of the offence.

The intention behind the Guidelines was to ensure a consistent, fair and proportionate approach to sentencing. The Guidelines require the Court to consider the degree of culpability on the part of the Defendant, the seriousness of the harm risked and the likelihood of harm arising. The Court is then required to determine the starting point for a financial penalty by reference to the turnover of the Defendant and then take into account any aggravating or mitigating features as well as ability to pay.

The Guidelines emphasise the general principle that the Court must have regard to when sentencing those who have been convicted of Health & Safety breaches:

“The penalty imposed must be sufficiently substantial to have a real economic impact, bringing home to management and shareholders alike the need to comply with Health & Safety legislation”.

If these recent decisions are anything to go by, the Courts have taken heed and, far from being an aberration, it is likely that similar or even higher penalties will be imposed in the future, particularly where the offence has been committed by a large undertaken with a high degree of culpability.

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