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Introduction

Many UK businesses are breaking the law by not complying with current Health and Safety legislation. As a result Directors are personally exposed to fines and penalties through criminal prosecution, which could even result in a custodial sentence.

Apart from the criminal law position, companies also have civil law responsibilities.

The following detail outlines the legal position with regard to both civil and criminal law, together with potential redress via damages fines and other penalties.

A final section also looks at future considerations including potential new legislation in respect of Corporate Manslaughter and Duties of Directors.

Civil law

Within civil law and under the law of tort (' a civil wrongdoing'), there are three main areas:

Negligence – A breach of a duty of care
Defamation – Written or verbal
Trespass – The person or property

In the main, Health and Safety issues happen as a result of negligence, where employers owe employees a duty of care under Common Law.

This duty is to:

ensure employee knows of the hazards
ensure employee knows of the precautions
ensure precautions are available
ensure employee knows precautions are available

To prove negligence an employee must show that:

a duty of care was owed
there has been a breach of this duty
injury or damage has resulted

Damage normally relates to injury or ill health and can now include aspects such as stress, psychiatric illness and racial abuse.

It is the law, if you employ anyone, to have arranged Employers' Liability Insurance (under the Employers' Liability Compulsory Insurance Act 1969). Employers' Liability Insurance should cover specific aspects including any award, together with Health and Safety at Work Act legal defence costs (check your insurance policy for the wording and any specific limits applicable).

It is worth bearing in mind that Employers' Liability Insurance will not cover all costs arising out of workplace injuries or ill-health and some of these are listed below:

lost time;
sick pay;
damage or loss of product and raw materials;
repairs to plant and equipment;
extra wages, overtime working and temporary labour;
production delays;
investigation time;
fines;
loss of contracts;
legal costs; and
loss of business reputation.

Criminal law

The law governing Health and Safety at work falls in into two areas:

The Health and Safety at Work Act 1974 which governs the employer’s duties to safeguard the health, safety and welfare of employees and others affected by business activities
Regulations made under The Health and Safety at Work Act, which deal with specific Health and Safety issues.

The Health and Safety at Work Act 1974 requires that employers prepare and publicise a written Health and Safety policy statement if they employ five or more persons (including part-time staff). The policy statement should be a broad outline of the Health and Safety strategy in place, including organisational responsibilities and arrangements.

The Health and Safety policy should be brought to the attention of all employees and should be reviewed on a regular basis, particularly if new work practices or equipment are introduced. Health and Safety legislation requires that all employers carry out suitable and sufficient assessments of the risks present in the workplace.

Regulations place a legal obligation on employers to carry out an assessment of the risks arising from specific work activities, for example manual handling. If five or more persons are employed, the significant findings of the risk assessments must be recorded, and systems and procedures for ensuring Health and Safety at work should be planned and monitored on an ongoing basis.

Assessments must be regularly reviewed and may require revision if new working practices are introduced. There is a general duty on employers to provide information, instruction, training and supervision to ensure the Health and Safety of their employees and records should be kept of all training and instruction provided.

What are the sanctions for failures under the Health and Safety at Work Act or relevant Regulations?

Summary Conviction – Maximum fine of £20,000 per offence or up to 6 months imprisonment, or both
Indictment Conviction – Unlimited fine or up to 2 years imprisonment, or both
Costs normally awarded
Formal Cautions may also be issued
Prohibition or Improvement notices

The future

1. Health and Safety (Directors' Duties) Bill

A company shall appoint one of its Directors as Health and Safety Information Director. This applies to every Company which does not qualify as a small or medium sized company.

The Companies Act 1985 will be amended as follows:

A duty of the directors of a company is to take all reasonable steps to ensure the company meets its obligations imposed by:

Relevant statutory provisions
Any Regulations, orders or other instruments of a legislative character that relates to Health and Safety
An order in council or regulations made under Section 2 of The European Communities Act 1972

The intention of the proposed legislation is to regulate previous guidance notes produced by the Health and Safety Commission concerning Directors' responsibilities for Health and Safety.

2. Corporate Manslaughter Bill

The Corporate Manslaughter Bill is designed to overcome the problem of proving a ‘directing mind’.

The new test will be based on failure in the way an organisations’ activities were managed or organised on the part of its senior managers. Under the proposed act Directors and Senior Managers could be given unlimited fines and/or custodial sentences for failure to manage the company’s Health and Safety activities correctly, where this has resulted in a work-related death.

3. NHS Recoveries

At the end of the 1990’s the Law Commission published a report, which considered the issue of broadening the right of the NHS to recover the costs of medical treatment, provided to victims of an accident caused by the negligence of another person.

The existing model for motor insurance could be adapted to apply elsewhere in particular for EL and PL/Products claims involving bodily injury. When and if implemented, this will add a further amount to the cost of claims.

4. Reform of Employers' Liability Insurance

There has been much debate as to how reform might take place and many stakeholders including the Department of Work and Pensions together with the Association of British Insurers have been involved in the process.

With industrial disease claims accounting for over 50% of the cost of all Employers' Liability claims, some of which can take many years to emerge through exposure to dust, fumes or the working environment, an insurer's ability to price cover accurately is difficult.

What is clear is that any reform must improve the position for all stakeholders, be robust, sustainable and affordable. At the same time it must not lose sight of the fact that cover was effected to protect the employee