The latest statistics from the HSE and, in Scotland, the Crown Office and Procurator Fiscal Service show that the average level of fine in a health and safety prosecution has increased significantly since the Sentencing Guidelines for health and safety offences came into effect in February 2016.
In 2014/15, the last full year pre Guidelines, the average level of fine was £29,000 per conviction. By contrast in 2016/17, the first full year post Guidelines the average had increased to £126,000 per conviction.
This trend, as well as that of an increase in the total number of fines exceeding £500,000, looks set to continue, following the recent Court of Appeal decision in Whirlpool UK Appliances Limited .
Whirlpool UK Appliances Limited ("Whirlpool") successfully appealed a £700,000 fine, having earlier pleaded guilty to an offence contrary to Section 3 of the Health and Safety at Work Act 1974 following an accident at Whirlpool's premises resulting in the death of a worker.
Section 3 of the HSWA 1974 imposes a duty on an employer to conduct its undertaking in a way to ensure that, so far as reasonably practicable, those persons not in their employment are not thereby exposed to risks to their health and safety.
Whirlpool had an exemplary health and safety record, with a strong culture of commitment to robust safe systems and procedures, with no previous convictions for safety failings. It had employed Mr Dalley, a self-employed alarm and telecommunications contractor with 30 years’ experience, to do some work on the fire and heat detector systems at its Indesit factory near Bristol.
On 21 March 2015, Mr Dalley had been working from a mobile elevated working platform. A separate maintenance team was working close by. As part of the permit to work system Mr Dalley had agreed to tell the other maintenance workers when he wanted to do his work to enable them to turn off the conveyor system.
At one point Mr Dalley told the maintenance workers he was going for a break before he restarted work. He forgot to tell them he had returned and they started the conveyor, which knocked Mr Dalley’s working platform, causing it to topple and for him to fall. He suffered multiple fractures and sadly died ten days later.
The prosecution argued that a breach of s3 of the HSWA arose. Whirlpool had not required Mr. Dalley to prepare a job-specific risk assessment for his work and could and should have prepared a more detailed Permit to Work which specifically identified the potential risk posed by a working platform being used in the vicinity of the overhead conveyor.
At trial in March 2017, Whirlpool pleaded guilty to breaching Section 3 of HSWA. Whirlpool was ordered to pay a fine of £700,000 and costs of £11,466.
Whirlpool appealed this fine on the grounds that the judge erred in his application of the Guidelines and as a result that the sentence imposed was manifestly excessive.
- At Step One of the Guideline, the Court is required to assess the offence category by reference to culpability and harm
- At Step Two, the Court is required to review the starting point and category range of sentence by reference to Company turnover with aggravating and mitigating features influencing where in the range the starting point lies
- Step Three requires the court to check whether the proposed fine based on turnover is proportionate to the overall means of the offender
The Court of Appeal agreed with the first instance judge, in that Whirlpool's breach was one of low culpability, as Whirlpool's policies did not fall far short of the appropriate standard. The Court of Appeal also agreed that the risk of harm category should be placed at Harm Category 3 as a starting point, but should be adjusted upward to Harm Category 1 due to the actual harm being loss of life. This placed the fine range between £180,000 - £700,000, being that of a very large company which Whirlpool was being categorised as having a turnover of £50 million and over.
The Court of Appeal held that the judge at first instance did not consider Step Three of the Guidelines. This requires the judge to consider the financial circumstances of the offender. The Court noted that there is a significant difference between an organisation with a sustained history of losses, compared with that of consistent profitability. Whirlpool suffered significant losses in 2015.
Applying the Guideline, the Court came to the conclusion that the appropriate fine should be one of £300,000 and that the original sentence of £700,000 was manifestly excessive.
It remains to be seen whether more organisations will appeal against their sentences for health and safety violations. Given that the Guidelines are relatively recent, there have been limited cases where the Court of Appeal has scrutinised how first instance judges apply these.
Several have been successfully appealed and as such there will inevitably be more.