The number of company directors prosecuted for safety and health offences was three times higher in the 12 months to April 2016 than in the previous 12, according to data from the Health and Safety Executive (HSE).
Figures obtained by lawyers firm Clyde & Co under the Freedom of Information Act show that the HSE prosecuted 46 company directors and senior managers in the 12 months to 31 March 2016 compared with 15 in the previous year.
In contrast, the number of employees prosecuted by the HSE dropped from ten to one. Around three-quarters (34) of the 46 people prosecuted were found guilty and this resulted in 12 prison sentence, the longest of which was two years. Chris Morrison, partner and UK head of safety, health and environment at Clyde & Co, said:
“The data confirms what we’ve been seeing in practice with the HSE displaying an increased zeal to prosecute the most senior individuals within a business yet virtually ignoring employees who are frequently more culpable. By making senior management responsible for the health and safety failings of their business and their staff, the increased enforcement is a serious boardroom issue.”
“While the majority of director prosecutions relate to SME [small and medium-sized enterprises] businesses due to their typically being some form of proximity or nexus with the director, the new game-changing sentencing guideline for health and safety breaches with turnover-related fines has created a new set of worries for director of all-sized businesses.”
Clyde & Co found that, in the first six months since the new sentencing guidelines for safety and health offences were introduced on 1 February, the total value of fines imposed after HSE prosecutions rose by 43%. Fines totalling £20.6m were handed out between February and August 2016, compared with £14.4m in February to August 2015. Prosecutions by local authorities are excluded from these figures.
“After decades of relatively stable and predictable fines, the tide is now rising rapidly as the new guideline is applied by the criminal courts,” said Morrison. “The worrying thing for company directors is that fines are now hitting the £1m mark for nonfatal offences and even those where nobody had been injured, meaning that any breach of the Health and Safety at Work Act is now potentially a serious threat to a company’s bottom line.”
Clyde & Co said medium-sized organisations, with a turnover between £10m and £50m, have been hit hardest; fines took a higher proportion of their turnover than any other size category. “Whilst health and safety has for many years featured prominently on many board agendas, time spent on the point has not necessarily been significant,” Morrison added. But the increase meant “they are now material from an accounting and governance perspective which demands that all directors – executive and non-executive alike – sit up and take note”.