Welcome to the Safeti Podcast
‘Impact of the Health and Safety Sentencing Guidelines’ with Kizzy Augustin
In this episode, prominent Health and Safety solicitor Kizzy Augustin, takes us through her thoughts on the latest major changes to the health and safety sentencing guidelines (England & Wales, 2016).
The renewed guidance for both environmental and health and safety sentencing in the past few years have begun to have a huge impact on levels on punishment for businesses and individuals.
Kizzy appears regularly as an advocate in court proceedings, employment tribunals (for appealing Improvement and Prohibition notices) and Coroners’ inquests.
She has significant experience in defending companies, senior directors and employees in corporate manslaughter and serious fire / health and safety prosecutions.
ResourcesHealth and Safety Sentencing Guidelines Summary
You can read the full podcast here, but here’s a taster…
Kizzy thank you so much for coming on to the Safeti podcast today to discuss with us the impact of the Health and Safety Sentencing Guidelines updates that have occurred in the UK in the last few years and obviously you’re a bit of an expert on this topic. So welcome to the show and thanks for coming on.
Thank you for having me.
As I said before you might have seen it that I put a little bit of a blog post on my own website on this issue and we see lots of examples of businesses being prosecuted and individuals as well and the increasing severity of those.
Obviously not everybody will be aware of the changes that have actually happened.
So hopefully with your expertise, you can give them a bit of a run down as to what these changes are and how it may impact any businesses or people they will be involved with.
Coming back to the start then can you give us a bit of an overview as to what the changes have been and how you see them?
We talk about them being recent and they still feel a bit recent to us. But these guidelines actually came into play in 2016.
So we’re two years in and feeling the impacts and hopefully a bit later I can give you a demonstration or an illustration of how that has impacted companies and individuals.
But where we’ve been at is in recent years in Health and Safety, in terms of the penalties that were dished out to companies and even individuals, we were looking in tens of thousands.
I mean we were looking at one time or another a 20,000 pound maximum fine for many organizations who were prosecuted health and safety matters.
Now I think post these guidelines coming in and the reason why these guidelines were introduced.
It came from the environmental sphere where some time ago a couple of years ago there were some issues relating to a large organization that were committing environmental breaches.
It was said in those cases that as a large organization with a lot of resource, you should really be sentenced accordingly.
It shouldn’t be the twenty thousand pound fine each time.
So for the first time a large organization was actually sentenced in accordance with a matrix that was again looked at by the Sentencing Guidelines Council.
They set up these specific environmental guidelines that each judge should look at when they’re looking to sentence for breaches of environmental law.
Now a very similar matrix was then adopted by the Sentencing Guidelines Council and put out the consultation for health and safety offenses. This was then accepted and brought into force in February 2016 and these are the guidelines that we have now.
Essentially it a carried a retrospective effect and it was a guideline for all judges to look at in relation to all Health and Safety offenses both fatal and non-fatal.
Corporate and individual offenders, corporate manslaughter and food safety and hygiene.
So we do now have definitive guidelines for all of those offenses.
I think the reason for that was there was a bit of disparity between the way in which health and safety matters were being sentenced and it was felt that if these guidelines were enforced, then judges had something to look at to.
At least give a bit more consistency and certainly more transparency in relation to the Sentencing of these type of offences.
I do remember that actually myself when I was working in construction and the environmental sentencing came through and as an environmental professional myself and with my background in environmental engineering.
I was quite happy actually to be honest as a lot of the offenses that were being committed were being punished at very very low levels and they weren’t having any impact on behavior.
That’s what I was saying.
You know we have other regimes in the regulatory field like fraud.
That you know fraud, big fraud cases being sentenced for millions of pounds. You know bribery and corruption same sort of thing.
Why are we not seeing the same in other parts of the regulatory regime like health and safety, like Environmental Law?
So it was done to I suppose bring us up to speed with the way in which these type of offences should be sentenced.
With that said and you’ve touched on the fact that a lot of the focus was on large organizations.
Can you tell us from what you’ve seen why this may or may not impact in the same way the smaller businesses and the small to medium sized businesses?
Well the guidelines apply to all levels of organisation. So from the large and very large all the way down to medium to small or micro.
So when we’re talking about large organizations we mean organizations that have a turnover of 50 million or above with 50 million pounds or above and very large organizations are those organizations that have a turnover that greatly exceeds 50 million.
But we don’t have any guidance as to what that looks like. So that could be 500 million. It could be 20 million, we don’t know.
We have had cases where companies who have a turnover that certainly us in the legal profession would say greatly exceeds 50 million, they don’t get sentenced as very large organizations. They’ve been sentenced as large.
The significance of having a very large organization category is that if you’re in that bracket, the judges don’t have to stick to the matrix. That the guideline set out in fact, they could go off the scale.
So that the fines could be well in excess of the ten million cap that the matrix gives. Nobody wants to be in those categories.
Now when you’re talking about the smaller organization’s so medium organizations and belo. We think they are feeling the impact of these guidelines more as they’ve got less money to put towards a fine.
But the fines are still particularly high. So what we’re seeing with the medium organizations which are, they have a turnover of 10 to 50 million.
For example their fines are anything from I would say 240,000 all the way up to let’s say 4 million.
That’s still a huge fine or a medium-sized company who although their turnover might be between 10 and 50 million. Their pre-tax profit may be a lot lower than that.
So certainly the impact is felt I think by the smaller companies.
I could just think of an example there of a company that I know who have a large turnover and a very small profit margin relatively and how that would impact them.
It would be severe and just on that point I mentioned in my own blog post and I’m sure you mentioned about it in some of the stuff that you have written on this subject.
The perception that insurance will cover this, can you give us any insight into that?
So I mean you can be insured for a variety of things as an organization. Certainly for civil claims if there is a claim against the company for negligence for example, that is likely to be covered as long as you’ve got the right insurance.
If you’ve got legal expenses insurance and you’ve got the right type of cover – the one you want is to cover an organization in relation to investigations or prosecutions for health and safety corporate manslaughter. etc.
Then that will cover you for instructing lawyers to assist you during an investigation/ prosecution. You would also want something corresponding to that that would cover your directors and officers. So the employees of the organization, the senior management of the organization just in case they are pursued in their personal capacity.
All of that will be covered as long as you have the right insurance. What insurance will not cover is fines. So that the financial aspects of a penalty will have to be covered by the organization itself.
When you’re talking about a million pounds plus for one offense, that can very easily toss up to quite a few if there are a number of offenses.
But even at 1 million, it’s a lot of money. It’s a lot of money to come out of an organization’s pocket.