Health & Safety Compliance Update 8 April 2015. 2 squirepattonboggs.com 2 Agenda Enforcement Trends...

Health & Safety Compliance Update

8 April 2015

2squirepattonboggs.com 2squirepattonboggs.com

Agenda

Enforcement Trends Corporate manslaughter – where are we now? What is material risk? (HSE v Polyflor) A New era for CDM The importance of monitoring and review in health and safety management

systems The importance of vehicle/pedestrian segregation – what are the cases

tellling us?


Enforcement trends - Are fines on the up?

R v Sellafield Ltd - £700,000 fine (after guilty plea)

"The fine must be fixed to meet the statutory purposes with the objective of ensuring that the message is brought home to the directors and members of the company"

"No ceiling on the amount of a fine that can be imposed“

R v Network Rail - £500,000 fine (after guilty plea)

Fine "incentivise the executive directors…to pay the highest attention to protecting the lives of those who are at real risk from its activities“

R v Southern Water – £200,000 fine

"There would have been no basis for interfering with the fine even if it had been substantially greater“


Enforcement trends - Are fines on the up?

United Utilities - £750,000 fine (after guilty plea) - 3 March 2015 Pump breakdown allowed seven million litres of raw sewage to flow into Duddon

Estuary Appeal on level of fine being considered

Tata Steel - £200,000 fine (after guilty plea) - 16 February 2015 Three workers sustained serious burns when a ladle holding 300 tonnes of molten

metal slipped from a crane, spilling its load, which then ignited on the factory floor

Thames Water - £300,000 fine (after guilty plea) – 8 December 2014 Worker was killed by a reversing excavator at a treatment works


H&S prosecution statistics

In the latest year (2013/14) HSE: prosecuted 582 cases (574 in 2012/13), with a conviction secured in 547 cases, a

conviction rate of 94%; prosecuted 988 offences, resulting in 881 convictions, a conviction rate of 89%; prosecutions led to fines totalling £16.7 million (£15 million in 2013/14), an average

penalty of £18 944 per offence.

In the latest year local authorities: prosecuted 92 cases (105 in 2012/13), with a conviction secured in 89 cases, a

conviction rate of 97%; prosecuted 199 offences, resulting in 192 convictions, a conviction rate of 96%; prosecutions led to fines totalling £1.6 million, an average penalty of £8 225 per

offence.

[Source: HSE]


What impact are Sentencing Guidelines expected to have?

Sentencing H&S offences – current position Breach of section HSWA

£20K maximum in Magistrates’ Court Unlimited in Crown Court Imprisonment

Breach of Regulation £20K maximum in Magistrates’ Court Unlimited in Crown Court Imprisonment

Very general sentencing principles based upon: - Seriousness of offence Culpability of defendant Means of defendant



Sentencing H&S offences - current position

Sentencing Guidelines Council - Corporate Manslaughter and Health & Safety Offences causing Death

Corporate Manslaughter – “The appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds.”

Health and Safety offences Causing Death – “The appropriate fine will seldom be less than £100,000 and may be measured in hundreds of thousands of pounds or more.”

A more prescriptive approach - applicable to sentencing of organisations on or after 15 February 2010



Sentencing H&S offences - the new regime - Health and safety offences, corporate manslaughter and food safety and hygiene offences guidelines

Very similar to environmental guidelines (offences sentenced after 1 July 2014)

Prescriptive tariff based approach based upon

1. Culpability

2. Harm or RISK of harm

3. Size of organisation BASED ON TURNOVER

To get to STARTING POINT and RANGE OF FINE RANGE OF FINE is meant to provide FLEXIBILITY and DISCRETION


H&S Sentencing Guidelines

Very large organisations - may need to move outside these boundaries


H&S Sentencing Guidelines - Individuals


Case Study

Employee at waste management company using mobile plant to load paper/card onto conveyor belt

Raised safety bar and lent out of front of machine Boom on front of machine crushed his head. He died at the scene. HSE found:

he had not been formally trained, assessed or supervised Risk assessments did not cover the use of the machine mobile plant had not been properly maintained (missed its last 2 services) self-employed maintenance engineer had also used it over several months with no

training

Issue – Safety bar failed to operate as expected (lifting it should have isolated moving parts) – fault of manufacturer


Case Study cont…

What was company charged with? Breaching s 2(1) and 3(1) of the Health and Safety at Work etc. Act 1972

Guilty / not-guilty? Guilty plea entered

What was the fine / costs? Fined £200,000, plus £77,402 costs and £4,450 towards funeral expenses

What could fine have been if Sentencing Guidelines in force? annual turnover in excess of £750 million Likely to be classed as “very large”


Case Study cont…

Culpability?


Case Study cont…

Harm?


Enforcement Trends - Conclusion

If the sentencing guidelines were in force, case study fine would have been millions (if classed as a “large organisation”, high culpability and harm Category 1, range would be £1.5 - £6 million)

Fines already increasing but expected to increase further

Fine limits in Magistrates’ Court may be removed under LASPO

Sentencing Guidelines expected to apply to cases sentences after June / July 2015

Avoiding prosecution has never been more important

If prosecuted, key is demonstrating low culpability / harm – helpful to seek prosecution agreement in advance


Corporate Manslaughter – where are we now?

Date Company Individuals? Fine Costs

2011 Cotswold Geotechnical Ltd Yes - dropped £385,000 (inc costs) -

2012 JMW Farms No £187,500 £13,000

2012 Lion Steel Ltd Yes - dropped £485,000 £84,000

2013 J Murray & Son Ltd Yes - dropped £100,000 £10,000

2013 Princes Sporting Club Yes - dropped £34,579.69 + Publicity Order

£100,000

March 2014 Mobile Sweepers (Reading) Ltd Sole Director £8,000 (company), £183,000 (Director) + 5 year disqualification, Publicity Order

£4,000 (company), £8,000 (Director)

March - June 2014

MNS Mining Ltd Manager – Gross Negligence Manslaughter

NOT GUILTY NOT GUILTY

March 2014 PS & JE Ward Ltd No NOT GUILTY NOT GUILTY


Date Company Individuals? Fine Costs

May 2014 Cavendish Masonry Limited

No £150,000 £87,000

October 2014 Sterecycle 4 employees – s.7 £500,000 Unknown

Jan 2015 Pyranha Mouldings Limited

3 employees - HSWA GUILTY – Awaiting sentence

-

Charges – Sept 2014Trial late 2015

Baldwins Crane Hire Ltd No Ongoing -

Charges – Oct 2014 Huntley Mount Engineering Ltd / Lime People Training Solutions Ltd

Yes – director and supervisor

Ongoing -

Jan 2015 Diamond & Son (Timber) Ltd

No £75,000 £15,852

Feb 2015 Peter Mawson Ltd Yes – 8 months suspended and unpaid work

£200,000 £31,504.77

Corporate Manslaughter – where are we now? (2)


Corporate manslaughter – acquittals

PS & JE Ward Ltd

Employee electrocuted when he tipped an hydraulic lift trailer in a field striking overhead 11,000 volt cables

Joint investigation by police and HSE revealed that the day before the accident, one of the company’s directors, Peter Ward, had performed the same task

No evidence that Ward had given instructions to the employee to repeat the task

Accepted that the employee had acted on his own initiative

The employee had attended a FLT training course which covered the risk of working under live cables

Jury acquitted PS & JE Ward of Corporate Manslaughter



PS & JE Ward Ltd

Convicted of breach of s.2 HSWA Fine - £50,000 Costs - £48,000 Company given three years to pay

Factors relevant to s.2 HSWA conviction Only a general risk assessment for working in the field Nothing specific about tipping the trailer in that field No plan provided to workers identifying the location of power lines in the field Inadequate instruction and training in relation to safe working near to overhead

power lines

The above factors were clearly insufficient to convince the jury that any breach was GROSS but sufficient to convince them that the company had not taken reasonably practicable steps to eliminate and/or reduce the risk to ALARP



MNS Mining Ltd

Four miners were killed at Gleision Colliery in Wales in September 2011

A controlled explosion was carried out to connect two parts of the pit to improve ventilation but moments later 650,000 gallons of water flooded the tunnels where seven miners were working

Company charged with Corporate Manslaughter

Mine Manager charged with four counts of Gross Negligence Manslaughter [NB Mine Manager working in same area at the time but managed to crawl free]

Prosecution case was that when the Mine Manager ordered the coal face to be blasted, he had not adequately checked if there was a body of water in the old mine workings behind it



MNS Mining Ltd

Mine Manager said he had inspected the area three times prior to the accident, including the day before, to ensure there was no danger, including accumulation of water

Expert geological evidence said it was "possible" and "probable" that the water collected after the last inspection

Jury returned not guilty verdicts on all counts after only two hours deliberation

Note: Oddly, no other H&S charges brought against the company or the Mine Manager


Corporate manslaughter

Lion Steel

Employee fell 30 feet through a skylight which resulted in him suffering fatal injuries

Employee had not received adequate training to work on the roof, there was no risk assessment or safe system of work for undertaking roof work at the site and there was inadequate supervision

Directors charged with gross negligence manslaughter and breaching s.37 HSWA (manslaughter charges against 2 directors collapsed)

Company charged with breaching s.2 HSWA Company pleaded guilty to corporate manslaughter even though not on trial

for that offence at the time (due to be heard at later date) – fined £480,000 plus £84,000 costs

Remaining charges against directors dropped Directors prosecuted to put pressure on the company to plead guilty???


Changes to sentencing practice and procedure

The new regime - Corporate Manslaughter

By definition culpability and harm must be very serious.

TWO STARTING POINTS ADVOCATED

A - More serious offences – HIGH LEVEL of harm or culpability B - all other offences


Consultation on draft guidelines for corporate manslaughter


Corporate manslaughter - Conclusion

Corporate manslaughter prosecutions on the increase

Once the guidelines come into force, fines likely to increase dramatically

Fine’s imposed to date would have been much higher if the guidelines were in force e.g. Lion Steel (turnover in the region of £10million)

Query whether Prosecution may bring charges against directors to encourage company to plead guilty.


What is material risk? (HSE v Polyflor)

Court of Appeal - 18 July 2014

How far do employers have to go to guard against the risks to safety of an employee doing something they know is obviously unsafe?

In other words, what is a “material risk”, such that a reasonable person would appreciate it and take steps to guard against it?


HSE v Polyflor Ltd

Mr Printy, Technical Support Engineer employed by Polyflor, undertook maintenance work on a granulator infeed conveyor aka the “hugging conveyor” in May 2011

Mr Printy was tasked to complete removal of a blockage. Mr Printy was to check the positioning and running of the belt before putting the machine back in operation

The blockage had been cleared by others with the guards removed but with the machine isolated

A PTW was issued as the machine needed to be run but with the guards removed

Mr Printy heard the belt rubbing and in an attempt to establish where it was rubbing put a spanner into the machine and as a consequence his arm was dragged into the machine


HSE v Polyflor Ltd

Mr Printy frankly accepted that he had been blasé and foolish in putting the spanner into the operational machine

Argument – was the risk of Mr Printy putting a spanner into a moving machine a material risk to health and safety such that a reasonable person would appreciate it and take steps to guard against it?

Defence contended no – in essence arguing it was unforeseeable that Mr Printy would put a spanner into an unguarded and operational machine, in which case prosecution lose case and reverse burden of proof is not triggered

Prosecution contended yes – in which case the reverse burden of proof is triggered and it is then for the defendant to prove that it did all that was reasonably practicable to avert the risk


HSE v Polyflor Ltd

Note – Prosecution only have to adduce some evidence of risk, not necessarily the risk that actually manifested

Or put another way Some evidence that an employee was, or employees were, exposed to the

possibility of danger


HSE v Polyflor Ltd

Court of Appeal – fact that guards were removed whilst the machine was operational (converse of normal operation) meant that employees were exposed to clear, obvious and material risk to their health and safety and “we might add, to the consequences of their own carelessness or indeed foolishness”

Therefore reverse burden of proof triggered Defendant did not put forward a positive case in terms of reasonable

practicability Note: Plastic screen inserted post-accident allowing operator in area of

bottom roller to look straight down onto the belts


HSE v Polyflor Ltd - Conclusion

When considering “material risk”, employers need to consider the potential for human error and the extent to which this needs to be eliminated / controlled


A new era for CDM - the Construction (Design and Management) Regulations 2015

Expected to come into force on 6 April 2015

Transitional period until 6 October 2015 (for on-going projects, Principal Designer to be appointed by this date unless project completed)

Simplification – less duplication and 25% shorter

Replacement of ACOP with clear, targeted guidance – available now


A new era for CDM – What is changing?

Principal Contractors and Principal Designers to be appointed wherever more than one contractor will be appointed (under CDM 2007, only notifiable projects require a CDM co-ordinator). Appointment must be done in writing to avoid client assuming these roles.

The CDM Co-ordinator role is to be removed - the role of the CDM Co-ordinator will be split between the principal designer, the client and the principal contractor.

Principal Designer to be responsible for health and safety in design phase: Principal Designer must be a “designer” The responsibility for coordination of the pre-construction phase, crucial to the

management of any successful construction project , will now rest with an existing member of the design team

Purpose of Principal Designer to help eliminate and / or reduce the health and safety risks to those involved in the subsequent construction work and the maintenance and use of the building, facility or structure once it is completed.



Introduces strict liability for the Client (i.e. an organisation or individual for whom a construction project is carried out), who will be accountable for the impact of their decisions on and approach to health, safety and welfare on the project.

Client must ensure (strict liability) that the principal contractor prepares a Construction Phase Plan before work commences

Client must ensure that the Principal Designer complies with their duties.

On completion, the client will be provided with a Health and Safety Plan, giving safety information on managing the work.



Replace competency based requirements with adequate information, instruction, training and supervision – no minimum standards set

New responsibilities for domestic clients Responsibilities differ from the duties on commercial clients. Domestic clients will be able to delegate their duties to a contractor or the principal

designer.

Notification trigger – either 30 working days and on which more than 20 workers are working simultaneously or exceeding 500 person days. This should mean fewer projects will require notification. It has now become the client’s duty to notify. Notification will no longer give rise to additional duties.


A new era for CDM - Conclusion

Those involved with construction projects should start familiarising themselves with the new requirements now

Key: Preparation Knowing what your duties are and ensuring you comply with them


The importance of monitoring and review in health and safety management systems

Successful Health & Safety Management- HSG65


HSG65

Key points:

Check Monitoring

Active (audits) Reactive (analysis of accidents/near misses to establish trends)

Act Review

Revisit policy, arrangements, procedures etc. based on results of monitoring Changes in legislation


IoD Guidance

Changed to align it with changes to HSG65

Documents meant to be considered together


IoD Guidance – The Key Components

Is the health and safety management system fit for purpose?

Is the health and safety management system being implemented and followed in practice?

Checklist


HSG65 & IoD Guidance

Director’s focus: -

1. MONITORING (Check)

2. REVIEW (Act)

3. Ensuring the H&S function is COMPETENT AND PROPERLY RESOURCED


Management Information – “A double edged sword”

Demonstrates monitoring and review

Knowledge marker if not acted upon

NOTE – Not just what you knew but what you ought to have known


Monitoring and review in Sellafield

“Indicate basic management failures and a deeply concerning lack of procedures formally established and rigorously enforced to ensure that equipment was properly set up at the outset and regularly and routinely checked”

“The Management failures are not confined to specific individuals or failures at certain levels to follow established procedures. They demonstrate …a custom within the company which was too lax and… to a degree complacent, and senior management must bear its share of responsibility”


Monitoring and review in Network Rail

“However those failures must be judged in part in the context of Network Rail’s poor previous offending in respect of level crossings (which reflect on the senior management)”

“Nonetheless the record of Network Rail reflects the fact that accidents at level crossings were prevalent. That makes clear the necessity for all the directors to pay much greater attention to their duties in this respect”

“There was evidence before us (but not the judge) that the bonuses of the directors had been adjusted downwards to a minor (though inadequate) extent in part because of the poor level crossing safety record to which we have referred. Plainly the bonuses should have been very significantly reduced”

“Significant reduction of a bonus will incentivise the executive directors on the board of companies such as Network Rail to pay the highest attention to protecting the lives of those who are at real risk from its activities”


Monitoring and review in Southern Water

Against the backdrop of 160 previous offences, the court said:

“In the absence of any explanation as to what the main board of the company has done to reform itself, to eliminate its offending behaviour and to give a detailed explanation of what happened in the incident which was before the learned judge, there is very little mitigation that can be put forward. It is very important – and we wish to make this clear – that in offences of the seriousness of the kind represented by this case it is incumbent on the Chief Executive and main board of the company – particularly one with a serious record of minor criminality which this company has – to explain to the court the cause of its offending behaviour, the current offence and its proposals for protecting the public from such further offending”.


Workplace Transport – Pedestrian and Vehicle Segregation

There has been guidance available on workplace transport since the 1990s Despite this, according to the HSE:

every year there are over 5000 accidents involving workplace transport - about 50 people are killed

the most common causes are people falling from or being struck by a vehicle, objects falling from a vehicle, or vehicles overturning.

around a quarter of all deaths involving vehicles at work occur as a result of reversing

According to the European Agency for Health and Safety at Work: Every year about 5500 people are killed in workplace accidents in the EU, of which

about a third are related to transport. The incidence of accidents is higher in SMEs with fewer than 50 employees.



Booker Cash & Carry

Branch Assistant suffered fatal injuries on 12 December 2011 As she walked through the “Goods in” area she was struck by a reversing

FLT which was loading goods onto a lorry What the company did wrong: -

“Goods in” area did not have separate designated pedestrian routes Access on foot was not restricted whilst FLTs operated Risk assessments were generic High viz clothing was not listed as a control measure in the risk assessment;

consequently most employees did not wear it in the area Internal audits looked at FLT use – but they did not identify that control measures

were insufficient and nor did they comment on site layout or vehicle–pedestrian segregation



Booker Cash & Carry

Admitted breach s.2 HSWA Judge found that breach was significant cause of death triggering Sentencing

Guidelines starting point of £100,000 Fine £175,000 (after discounting 1/3 for early guilty plea), Costs £18,500 Changes made:

The company prevented pedestrian access to the goods in area and yard while fork lift trucks were being operated



Tangerine Confectionary Ltd

Employee sustained serious injuries to his foot when a FLT was driven through plastic strip curtains at the warehouse entrance and collided with his ride-on pallet truck

Plastic strip curtains were designed to keep out insects and birds – they obscured the view of the warehouse entrance

A large number of pallets had been put into space from two other warehouses whilst maintenance work was carried out – this restricted the space drivers had to operate vehicles and increased flow of traffic

HSE investigation revealed that the incident was one of three collisions in the same area over a three month period



Tangerine Confectionary Ltd

What the company did wrong: - the Company introduced physical hazards onto walkways without assessing their

effects workers had raised concerns about restricted vision and overcrowding but they were

ignored

Post-accident changes included: - changing the layout of the warehouse Installing proximity alarms marking “in” and “out” lanes

Pleaded guilty to breach of Regulation 17(1) of the Workplace (Health, Safety and Welfare) Regulations 1992 - every workplace shall be organised in such a way that pedestrians and vehicles can circulate in a safe manner

Fine £120,000 Costs £9,500



Lincolnshire Field Products Ltd Farm manager was walking from his car across yard to a potato grating shed

when he was struck by FLT What the company did wrong: -

Custom and practice not to wear high viz clothing Common practice for FLTs and pedestrians to share entrance to grating shed Warnings and advice went unheeded: -

• Previous enforcement • Previous accident • Ignored advice from H&S Consultant

Not implemented control measures identified in risk assessments

Fine – Section 2 HSWA - £100,000

Section 3 HSWA - £65,000 Costs - £39,000 Fine represents 17.5% of pre-tax annual profit



“A guide to workplace transport safety”

Updated September 2014 Shorter and more streamlined Specific advice on:

Safe site Safe vehicle Safe driver

New sections on: Multi-deck vehicles Multi-site deliveries


Workplace Transport - Conclusion

Workplace transport continues to be a high risk area Employers should ensure that they comply with the “Guide to workplace

transport safety” Need to ensure all types of workplace transport are covered - ‘Workplace

transport’ means any vehicle or piece of mobile equipment used in any work setting. It covers a very wide range of vehicles, from cars, vans, lorries and lift trucks, to less common vehicles and plant such as straddle carriers and rubber-tyred gantries. It does not include vehicles moving on public roads.


Conclusion

It has NEVER been cheaper to offend than comply

New prescriptive approach to sentencing will result in increased fines


Conclusion

Do the math!

1. Cost of compliance

V

2. Offend - fine - prosecution costs

- management down time

- adverse reputational impact

- cost of compliance (steps to prevent re-occurrence/mitigation)

1 is cheaper than 2 by miles!


Contact Information

Rob Elvin

Partner

0161 830 5257

[email protected]

Health & Safety Compliance Update 8 April 2015. 2 squirepattonboggs.com 2 Agenda Enforcement Trends...

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Transcript of Health & Safety Compliance Update 8 April 2015. 2 squirepattonboggs.com 2 Agenda Enforcement Trends...