Businesses are being urged to make board level supervision of health and safety regimes a priority, as a High Court appeal and an expected consultation by the Scottish Sentencing Council could soon usher in a more stringent regime in Scotland, with potential fines rocketing by a factor of up to ten.
Malcolm Gunnyeon, a partner in the health & safety team at commercial law firm Maclay Murray & Spens LLP (MMS), warned that following the introduction of tough new sentencing guidelines in England and Wales, Scotland looks certain to follow suit one way or another, and the effect will be immediate.
Mr Gunnyeon said: “Although Scottish courts are not bound by the English sentencing guidelines, the legislation on health and safety at work is the same, and it seems inconceivable that it should effectively become far cheaper to injure an employee in Scotland than in England or Wales. Judges are already taking note of the English guidelines, and the Scottish Sentencing Council is expected to start a consultation on guidelines for Scotland soon. A decision in the High Court, expected later this month, could further accelerate the application of these far more severe fines in Scotland.
“If, or perhaps more likely when, Scotland follows the route taken in England, the new rules will apply immediately to cases being sentenced, irrespective of the date of the incident or offence, and that means that many pending prosecutions could have far greater consequences for the offending firms. Fines for breaches involving death have always rightly been high, but now even those resulting even only in the risk of injury could rocket from tens of thousands of pounds to hundreds of thousands for larger businesses.
“Finance directors and chief executives need to be aware of the potentially catastrophic financial and reputational consequences and ensure that health and safety is an immediate priority within their organisations. Avoiding incidents in the first place is, of course, the best way to avoid becoming subject to any new regime. Should the worst happen and a company finds itself at fault, an early plea of guilty will often be recognised with a significant discount to the sentence – and this is something that will become of greater significance as fines increase dramatically.”
South of the Border, sentencing judges now assess the seriousness of a health and safety breach, the level of harm done to employees, and the size of the offending business to decide the level of a fine. Because size is measured by revenue, it can have an especially detrimental impact on relatively low margin industries, such as manufacturing and construction, where serious health and safety matters are also most likely to arise.
Mr Gunnyeon noted that although firms have long faced heavy compensation claims where workers have been injured – and that is likely to continue to be the case – these are usually covered by insurance. However, criminal sanctions cannot be insured against, so the fines will come off a company's bottom line.