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Health and Safety is an issue that effects all businesses, large or small and irrespective of the type of business they carry out. A recent case involving a Sheffield based firm serves as a stark reminder as to the potentially disastrous results should a company fall foul of the relevant regulations.
The Regulatory position is derived from the original consolidating Health and Safety at Work Act 1974. The Old Factory’s Act have been replaced developed particularly by Judicial input through the European influence 6 pack of Regulations. The Regulatory climate is fraught with potential difficulties, liabilities and draconian enforcement.
Chesterfield Special Cylinders, a subsidiary of Pressure Technologies, has recently been ordered to pay a £700,000.00 fine and in addition prosecution costs of £169,498.82. After a long standing worker was killed by shrapnel that was ejected from testing equipment directly as a result of a build up of compressed air. The incident was found to be “tragic and wholly avoidable…” and was caused by corrosion inhibitor that was added to the equipment by the company.
HSE investigator, Eddy Tarn, stated that companies should “accurately identify and control all potential hazards” and that these should then be monitored through “effective supervision”.
The sentencing provisions are severe the fines are up to £50,000 in the Magistrates Court per offence and unlimited in the Crown Court.
In the case of R v F.Howe & Son (Engineers) Limited 91988) EWCA Crim 3531 Mr Justice Scott Baker surmised that “The objective of prosecutions for health and safety offences in the work place is to achieve a safe environment for those who work there and for other members of the public who may be affected. A fine needs to be large enough to bring that message home where the defendant is a
company not only to those who manage it but also to its shareholders”. Therefore, should not be surprised to see hefty fines will inevitably follow where a breach of health and safety is established.
In R v Howe, the argument was made in mitigation that a fine should not be so large as to cause bankruptcy and to imperil the earnings of the staff. However, Mr justice Scott Baker states “there may be cases where the offences are so serious that the defendant ought not to be in business”.
The fine associated with the above case related to death caused by faulty electrical sockets and machinery. These should be checked thoroughly and frequently by qualified professionals.
This solvency or continued commercial viability was of no consequence to the sentencing Courts. Especially if it were found likely that the company would continue to operate in a potentially unsafe manner.
What about your insurance policies? Do they save the day?
This is a popular misconception. Most policies of this type will only cover the legal costs to defend the action brought against your company and costs associated with mitigation. Check these policies carefully as they may not be what they initially seem.
Early contact with a professional advisor and in this respect we refer you to the Ramsdens Regulatory Team is invaluable in preventing the escalation of Regulatory input and costs at a later date.