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Health and Safety – January/February 2018

Print publication

01/03/2018

Launch of New Office for Product Safety and Standards, Supreme Court authority, sentencing news and more.

Government announces new Office for Product Safety and Standards

The government has now responded to the July 2017 report of the Working Group on Product Recalls and Safety, which was tasked with developing options to improve the system of product recalls and safety. The government supports the eight recommendations put forward by the Working Group and has decided to create a new Office for Product Safety and Standards (OPSS).

Among other things, the OPSS will: provide advice and support to ensure manufacturers, importers and retailers meet their responsibilities to place only safe products on the market; provide consumer-facing product safety information and advice; and co-ordinate rapid and effective action when national safety issues arise. It will cover non-food consumer product safety such as white goods, electrical goods, toys, clothes and cosmetics. Market surveillance of construction products is being looked at separately as part of Dame Judith Hackitt’s review of building regulations and fire safety.

The OPSS was launched on 21 January 2018 and sits within the Department for Business, Energy and Industrial Strategy (BEIS). Longer term, the government will consider options for making the OPSS an independent, arm’s length body. Initial OPSS priorities will be to set up an incident management capability to respond to national product safety issues and make further improvements to the information on the government’s product recall webpages to make them more accessible. Among other things, it will move on to building an extensive data hub of all corrective action and recall programmes affecting consumer products. Full public access is anticipated in 2019.

Separately, and prior to the launch of the new OPSS, the House of Commons published a report from the BEIS Committee on the safety of electrical goods in the UK. The Committee was particularly concerned by Whirlpool’s response to a defect in its tumble dryers. The Committee’s conclusions and recommendations are set out on page 26 onwards.

Concerns raised over independent review of building regulations and fire safety

The Chair of the Communities and Local Government Committee has written to Dame Judith Hackitt, expressing concerns over the scope of her review of building regulations and fire safety, undertaken following the Grenfell Tower disaster. The interim report was published in December 2017 and a final report is expected in spring 2018. See the exchange of correspondence here.

Whirlpool fine reduced on appeal

Whirlpool UK Appliances Limited has had a £700,000 fine reduced to £300,000 on appeal [1]. The electrical appliance company received the fine in March 2017 after a self-employed contractor fell from a height of nearly five metres and later died from his injuries. It submitted that the sentencing judge had made a mistake in his application of the sentencing guideline so that the sentence imposed was “manifestly excessive”.

This was a low culpability, “harm category 3” offence. For “large” organisations, with a turnover or equivalent of £50 million or over, the starting point under the guideline for such an offence is £35,000 with a category range of between £10,000 and £140,000. In respect of “very large” organisations, the guideline provides that “where an offending organisation’s turnover or equivalent very greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence”.

The sentencing judge had identified that the company had a turnover of £500 million (it was actually slightly higher than this at around £700 million) and considered that the appropriate starting point was £1.2 million. This was reduced by £150,000 for good character and remorse and a one third reduction applied to reflect the guilty plea.

The Court of Appeal began by considering the approach to sentence for a “large” organisation, noting that the culpability and harm category can both have a marked impact on starting points. It said that a consistent feature of sentencing policy in recent years has been to treat the fact of death as something that substantially increases a sentence, as required by the second stage of the assessment of harm at step one of the sentencing guideline. The fact of death, without taking account of turnover, in this case justified a move not only into the next category of harm, but to the top of the next category range, which might suggest a starting point of £250,000. The court went on to say that that figure must be increased to reflect the company’s large turnover and its status as a “very large” organisation. The next range up in the guideline extends from £180,000 to £700,000.

The court’s view was that the company’s turnover should result in the starting point moving to £500,000, before taking aggravating and mitigating factors into account. This figure was reduced to £450,000 to reflect the strong mitigating factors in the case, with a one third reduction to reflect the guilty plea. At step three of the sentencing guideline, which requires the court to “check whether the proposed fine based on turnover is proportionate to the overall means of the offender” (a step which the sentencing judge had not taken) the court did not consider that its figure of £450,000 required adjustment. The company had underlying profitability – a recent loss was due to two exceptional items and the fluctuations in profitability did not affect the directors’ remuneration.

The court made the following comment in relation to step three of the sentencing guideline: “There is a significant difference between an organisation trading on wafer-thin margins and another, perhaps a professional services company where the profits shared between partners or shareholders is a substantial percentage of turnover. An organisation with a consistent recent history of losses is likely to be treated differently from one with consistent profitability. So too, an organisation where the directors and senior management are very handsomely paid when compared to turnover is likely to attract a higher penalty than one where the converse is the case”.

It is also interesting to note the court’s concluding remarks in this case:

Nothing in this judgment is intended to alter the policy in this Court in recent times (consolidated by the Sentencing Guidelines Council) of ensuring that organisations are made to pay fines that are properly proportionate to their means. That of course does not relieve the Court of a duty to enquire carefully into the facts of each case so as fairly to reflect different levels of harm and culpability. The circumstances of this case are unusual in flowing from an offence of low culpability and low likelihood of harm. Had they involved any increased culpability or likelihood of harm the appropriate fine would have been very much larger. No two health and safety cases are the same. The Guideline provides for very substantial financial penalties in appropriate cases, particularly when the offender is a large or very large organisation. Yet it is subtle enough to recognise that culpability, likelihood of harm and harm itself should be properly reflected in any fine, as well as turnover. The same degree of actual harm following a breach of section 2 or 3 of the 1974 Act can deliver very different fines depending on the circumstances…

Large commercial entities in many areas of business are vulnerable to very substantial financial penalties for regulatory failings. The same is true for breaches of health and safety or environmental law in appropriate cases. A fine of the order imposed by the judge in this case would only have been appropriate if the factors weighing in the balance for the purposes of the Guideline had been different.”

Sentencing update

Tata Steel is the latest company to be issued with a £1 million-plus fine for breaching health and safety legislation. The steel producer was fined £1.4 million  after a maintenance electrician died when an overhead crane trapped and crushed him while he was carrying out inspection duties. An  by the Health and Safety Executive (HSE) investigation found that the company had failed to enforce its own safety procedures (despite two previous incidents) and failed to put in place essential control measures.

Discount retailer Poundstretcher was fined £1 million for 24 health and safety offences, in prosecutions brought by three different councils. See the Lewes District Council press release here.

In other sentencing news:

  • A contractor and sub-contractor were fined a total of £800,000 after a scaffolder died when he was hit by a reversing dumper truck at a construction site. An HSE investigation found that the contractor had made no provision to maintain separation of vehicles and pedestrians where the incident took place and traffic management across the entire site was poorly managed, which was an underlying cause of the accident. The subcontractor failed to provide a person trained to direct vehicle movement, there were no such employees on site, and the vehicle was not fit for use on the site.
  • A retail company and a contractor were fined a total of £640,000 after two elderly members of the public were injured on consecutive days during the construction of a concrete disabled ramp outside a convenience store. Customers were required to walk through the construction site to enter and exit the store. The HSE inspector said: “These incidents could so easily have been avoided by simply carrying out correct control measures and safe working practices. Commercial clients and companies should be aware that HSE will not hesitate to take appropriate enforcement action against those that fall below the required standards”.
  • A principal contractor was fined £500,000 after a worker on a housing development site suffered life-changing injuries from being struck and run over by a tipper truck. An HSE investigation found that there were insufficient protected walkways across the site, there was no control over access to it, there was an accepted practice of walking on haul roads, and no up to date traffic management plan.
  • The Ministry of Defence received a Crown Censure (the maximum sanction a government body can receive) after a Royal Navy engineering technician died when he was crushed between a moving lift and a lift shaft while carrying out maintenance work.

Supreme Court clarifies approach to challenge of improvement/prohibition notices

The Supreme Court has provided definitive authority in relation to the challenge of improvement/prohibition notices, following conflicting interpretations of section 24 of the Health and Safety at Work etc Act 1974 (the Act) in the English and Scottish courts [2]. The key question for the Supreme Court to determine was whether, in reaching its decision whether to affirm, modify or cancel the notice, a tribunal is confined to the material which was, or could reasonably have been, known to the inspector at the time the notice was served, or whether it can take into account additional evidence which has since become available.

Chevron North Sea Limited had been served with a prohibition notice under section 22 of the Act after inspectors formed the view that corrosion had rendered unsafe the stairways and stagings providing access to a helideck on an offshore installation, so that there was a risk of serious personal injury from falling through them. Chevron appealed against the notice to an employment tribunal under section 24 of the Act. It later obtained an expert report setting out the results of testing of the metalwork, which showed that it passed the British Standard strength test, and there was no risk of personnel being injured by falling through it. Chevron sought to rely upon the report as part of its appeal.

The tribunal decided that it was entitled to look at the later material and cancelled the notice. The Scottish Court of Session Inner House held that the tribunal had been correct to have regard to the subsequent testing and analysis, and entitled to accept that evidence. The English Court of Appeal had taken a different view on the proper approach to an appeal under section 24 in an earlier case, and so the inspector appealed to the Supreme Court.

The Supreme Court held that the tribunal is not limited to considering the matter on the basis of the material which was or should have been available to the inspector. It is entitled to take into account all the available evidence relevant to the state of affairs at the time of the service of the prohibition notice, including information coming to light after it was served. The inspector’s appeal was dismissed.

This decisions brings welcome clarification for duty-holders.

New occupational health and safety standard

The International Organisation for Standardisation (ISO) is developing a new standard – ISO 45001, ‘Occupational health and safety management systems – Requirements’ – to help organisations across the world reduce the significant burden of occupational injuries and diseases. The new standard is due for publication on 12 March 2018. See the ISO’s webpage here.

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[1] Whirlpool UK Appliances Limited v R (Upon the prosecution of Her Majesty’s Inspectors of Health and Safety), [2017] EWCA Crim 2186
[2] HM Inspector of Health and Safety v Chevron North Sea Limited, [2018] UKSC 7

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