R v F Howe & Son (Engineers) Ltd [1999] IRLR 434
Two recently reported decisions of the Court of Appeal make it clear that the Courts should be tougher when dealing with breaches of health and safety legislation.
Following an accident where an employee was fatally electrocuted, the company pleaded guilty to four out of five breaches of health and safety legislation and was then fined £48,000 plus £7,500 costs at Bristol Crown Court. The company appealed against the severity of the fine. The company consisted of two directors, neither of whom had an annual income in excess of £20,000 and 12 employees. Annual turnover was around £350,000 and net profit was £30,000 per annum.
The Court noted a tariff system for fines would not be appropriate. Each case had to be decided on its facts. It accepted that the level of fines for these offences was generally too low and that "there may be cases where the offences are so serious that the defendant ought not to be in business".
The Court laid down the factors to be taken into account by Magistrates' and Crown Courts in criminal cases for breaches of health and safety legislation.
1 Size does not matter - a company's size and financial strength or weakness does not affect the degree of care required in health and safety law: the standard of care is the same. It may affect the size of the fine however.
2 Fines should usually be higher where the breach of the health and safety law causes death.
3 Deliberate breaches of health and safety law to enhance company profits aggravate the offence and should be reflected in the fine.
4 The extent of the breaches Ð how little care was taken to protect workers' safety; the degree of risk and extent of the danger created will always be relevant.
5 Failure to heed warnings and breaches continuing over a long period will increase the fine.
But the Court said fines should be reduced where companies admit responsibility quickly or tighten up straightaway on breaches that are pointed out, and a previous good safety record will help.
And the company's resources and the effect of the fine on its business is crucial. Any fine should reflect the means of the offender, whether corporate or individual.
In spite of the court's concern about low fines in general the appeal was allowed and the
fine reduced to £15,000.
R v Rollco Screw & Rivet Co. Ltd [1999] IRLR 439
Following dangerous removal and dumping of asbestos, the company and its two directors pleaded guilty to breaches of health and safety legislation. The company was fined £40,000 plus £30,000 payable over six years, five months. In addition, one director was fined £6,000 with £2,000 costs payable over three months and the other director was fined £4,000 with £2,000 costs. Both the company and the directors appealed against the level of the fine. The company also appealed against the repayment period.
The Court of Appeal endorsed the decision in R v F Howe & Son (Engineers) Ltd [1999] IRLR 434 but went on to say that the first question was what was the appropriate level of fine for this offence and the second question was what can the defendant reasonably be ordered to pay?
The Court held that the fines against the directors were appropriate as were those against the company. However, it accepted that the repayment period for the company was excessive and, as the level of fines was appropriate, the award of costs would be reduced from £30,000 to £20,000 thus reducing the repayment period to five years, seven months.
During its decision, the Court said "it seems to us important in many cases that fines should be imposed which make quite clear that there is a personal responsibility on directors and that they cannot simply shuffle off their responsibilities to the corporation of which they are directors."