Ian Hollingworth, Head of Claims for ECIC
In 2016 the UK Sentencing Council announced major modifications to the penalties for health and safety at work offences following concerns that existing sanctions were too low to act as a significant deterrent. To ensure fines would have an ‘economic impact’ on the offending employer, fines would be set relative to the size of the business and the potential harm that could have been caused.
Since that time, the number of fines that are reaching six and seven figures for Health and Safety at Work offences have risen starkly in England and Wales.
It is therefore important that NFRC members prepare themselves and guard against the risk of facing much higher penalties for Health and Safety breaches.
The modifications to the guidelines for England and Wales mean that some large roofing contractors businesses with turnovers exceeding £50million convicted of corporate manslaughter can now face fines of up to £20million. Furthermore, individuals such as company managers or directors who are found guilty of a breach in duty of care to their employees could face a custodial sentence of up to two years.
Just to underline the scale of this change, in the year since the new guidelines were introduced there have been 19 fines of over £1million compared to 3 in 2015 and none in 2014 .
From a roofing contractor perspective, what really concerns ECIC, as a specialist insurer in this market, is the fact that we have seen a significant uplift in the frequency of HSE notifications in the past year, with around 4 times the number of that in previous years.
In addition to this, due to the wide bracket of fines under the new guidelines, (ranging from £1000 to £4million), mid-sized roofing businesses could face a fine similar to that of a much larger company with much deeper pockets. As many of our policyholders are classed as mid-sized roofing firms (with turnovers between £10million and £50million) some could argue they are disproportionately impacted by the new guidelines.
Previously a £250,000 - £500,000 fine was the range for the most serious offences under the old guidelines whereas now, dependant on the company’s annual turnover (as opposed to profitability), the fine could be as much as £10million for exactly the same incident.
It has also been interesting to see just how much information the sentencing process in England and Wales takes into account. Firstly, the Courts are required to consider the level of ‘culpability’ ranging from low i.e. the company did not fall far short of the appropriate standard, to high i.e. a deliberate breach of, or flagrant disregard for the law. Aggravating factors e.g. cost-cutting at the expense of safety as well as any mitigating factors such as a good health and safety record are then also considered at this point. The level of harm in this process is then categorised on a level of 1-4 and refers to the potential harm that could have been caused rather than the actual injury sustained. Cases involving corporate manslaughter are classed as either Category A where incidents are indicated to have had a high level of harm or Category B, where a lower level of culpability has been established. The fine imposed is then determined based on the annual business turnover.
Without stating the obvious, the increase in the number of HSE prosecutions and the level of fines being imposed under the new guidelines in England and Wales should provide a warning to roofing contractors. It starts with having an effective and robust approach to complying with health and safety laws. They must also have evidence of this approach with each and every worker signing site specific health and safety assessment forms at the outset of each job to ensure they are aware of any risks, the control measures in place and personal protective equipment needed. In a recent survey we conducted amongst contractors, 1 in 4 firms failed to take this approach.
A roofing contractor with a neat folder detailing its health and safety practices and risk assessments may feel they have fulfilled their obligations but, if those documents were not provided to the employee that will not stand up in a court of law as evidence the claimant ought to have known about the risks and known what preventative action to take. This exposes the contractor to claims for civil damages and if serious enough a prosecution by the HSE which may ultimately lead to a significant fine or even imprisonment.
The roofing contractor must provide evidence that the worker read the risk assessment, understood the risks and signed and dated the Health and Safety policy document prior to them commencing the work. A signed, dated document is the crucial piece of evidence a contractor needs to demonstrate compliance with the relevant statutory duties of care and Health and Safety Regulations.
Without a proper risk assessment detailing the risks and control measures shown to and signed by the workers involved, the contractor leaves themselves open for criticism by the courts in the event a claim is made for not taking all reasonable measures to protect their employees.
The outcome of a Court prosecution could be immensely damaging not only on a financial level, but on personal level for the company directors and the reputation of the business.
EC Insurance Company Ltd (ECIC) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. FRN: 202123.
 Health and Safety Sentencing Guidelines One Year On Report by IOSH in partnership with Osborne Clark LLP, Jan 2017.
 357 Contractors surveyed March 2017