New sentencing guidelines introduced on August 4 2008 reinforce the seriousness of breaching health and safety legislation and regulations. Manufacturers need to remain on top of their obligations, or else face hefty fines.
The revised guidelines require magistrates to take certain factors into account when passing sentences. The main issue when assessing a breach of health and safety regulations is how far below the required standard the company falls. Other features which increase the seriousness of the offence (and consequently the level of fine imposed) include: deliberate breaches, profit-saving motives for the breach, and failing to respond to warnings from the regulatory authority or employees.
Moreover, corporate food manufacturers will have turnover, profitability and liquidity taken into account when assessing the appropriate level of fine. Larger companies will obviously be able to afford small fines. The courts therefore have the power to impose substantial penalties to make a real economic impact.
The attitude of the courts in considering the economic cost to companies was made particularly clear in one case where the fine received was based on an estimate of future profits for the year. Edeco was fined almost £250,000 after an accident resulted in the death of a sub-contractor. The company had admitted that no proper risk assessment had been carried out and that it had not taken health and safety as seriously as it should have done. The gravity of the offence was such that the fine had to make an example of the company, to hurt the management and its reputation.
While breaches are difficult to eradicate due to their often accidental nature, taking swift action could reduce potential liability. The guidelines allow for leniency if companies report offences promptly, co-operate with the regulators, put right the problem as quickly as they could, and have a good past history.
The importance of these guidelines can be seen from their wide application: although there are specific offences covered, they apply to all breaches of health and safety legislation and regulations. This not only covers more obvious areas such as work place accidents, spillages and environmental damage, but also food hygiene, packaging and labelling regulations.
The best way for manufacturers to avoid punishing fines is to take health and safety seriously, making breaches far less likely. FM
Andrew Litchfield is a director in Wragge & Co LLP's regulatory litigation team