Transcript Document
Management of Health and Safety Legal Perspective Mark Tyler CMS Cameron McKenna Today’s Topics Compensation Culture Legislation as driver HSE’s enforcement role Directors’ responsibilities H&S in Corporate Governance Corporate Manslaughter ??***?? - p2 ??***?? - p3 Compensation Culture “The growing compensation culture in the UK is now costing about £10bn a year – or 1% of GDP” Institute of Actuaries, Dec 2002 “25% of employees find the essential Employers Liability Compulsory Insurance difficult or impossible to secure despite vigorous attempts to find cover.’ Federation of Small Business, May 2004 ??***?? - p4 Growing compensation culture poses major threat to profitability and jobs. Aon, July 2004 Compensation Culture The culture is a myth The perception causes fear of litigation and imposes burdens on organisations Redress for genuine claimant is hampered www.brtf.gov.uk Recommendations Regulate claims Co’s Raise small claims limit Improve ombudsmen arrangements More mediation ??***?? - p5 More rehabilitation Investigate contingency fees Promote occupational health Lower insurance premiums Compensation Culture ??***?? - p6 Conditional fee rules introduced, 1995 Legal aid restricted for personal injury, 2000 Solicitors’ advertising rules relaxed, 2001 Increasingly strict interpretation of regulations and common law duties of care. Number of Solicitors – England & Wales 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 ??***?? - p7 Legislation as a Driver HSWA 100+ health and safety regulations Management of Health and Safety at Work Regulations 1999 Corporate Manslaughter “The Government is concerned both that there should not be scope for avoidance measures by unscrupulous companies or directors, and that enforcement action should act as a real deterrent, even in large companies and within groups of companies.” ??***?? - p8 Major Injuries - Construction Employees 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 3 02/0 2 01/0 1 00/0 0 99/0 9 98/9 8 97/9 7 96/9 6 95/9 5 94/9 4 93/9 3 92/9 2 91/9 ??***?? - p9 Major Injuries – Construction Employees 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 91/9 92/9 93/9 94/9 95/9 96/9 97/9 98/9 99/0 00/0 01/0 02/0 2 3 4 5 6 7 8 9 0 1 2 3 ??***?? - p10 CDM Legislation as a Driver ??***?? - p11 } Southall rail crash Ladbroke Grove rail crash Hatfield Transco/Larkhall Safety Case holders Legislation as a Driver Among the specific proposals which the Health and Safety Commission will consider are: Fines linked to the turnover or profit of a company; Prohibition of Director bonuses for a fixed period; Suspension of managers without pay; Suspended sentences pending remedial action Compulsory health and safety training Fixed penalty notices for specific offences Deferred prohibition notices on welfare issues ??***?? - p12 HSE Enforcement Role "The evidence supports the view that it is inspection, backed by enforcement, that is most effective in motivating duty holders to comply with their responsibilities under health and safety law. We therefore recommend that the HSE should not proceed with the proposal to shift resources from inspection and enforcement to fund an increase in education, information and advice". House of Commons Work and Pensions Committee, July 2004 ??***?? - p13 Average Fines for Health and Safety Offences 1990/91-2002/03 £12,000.00 £10,000.00 £8,000.00 £6,000.00 £4,000.00 £2,000.00 19 90 /1 19 991 91 /1 19 992 92 /1 19 99 93 3 /1 19 994 94 /1 19 995 95 /1 19 996 96 /1 19 997 97 /1 19 998 98 /1 19 999 99 /2 20 00 00 0 /2 20 001 01 /2 20 002 02 /2 00 3 £0.00 ??***?? - p14 Prosecutions 1990-2003 3000 2000 1000 0 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 Convictions ??***?? - p15 Prosecutions Enforcing authorities should identify and prosecute or recommend prosecution of individuals if they consider that a prosecution is warranted. In particular, they should consider the management chain and the role played by individual directors and managers, and should take action against them where the inspection or investigation reveals that the offence was committed with their consent or connivance or to have been attributable to neglect on their part. ??***?? - p16 ??***?? - p17 19 98 /9 19 99 /20 00 20 00 /01 20 01 /02 20 02 /03 19 97 /8 19 96 /7 19 95 /6 19 94 /5 19 93 /4 19 92 /3 D & O HSE Prosecutions 40 35 30 25 20 15 10 5 0 H&S in Corporate Governance 2003 survey of directors “Rewards are not at the top of directors’ agendas. The area directors are most concerned about is the risk from health and safety and product liability laws.” ??***?? - p18 Action Point 5 "The board needs to ensure that it is kept informed of, and alert to, relevant health and safety risk management issues. The Health and Safety Commission recommends that boards appoint one of their number to be the 'health and safety director'". Percentage of organisations that have allocated health and safety responsibility to a board level director [Source: HSE Research Report 135] H&S in Corporate Governance Combined Code – internal control guidance HSC/DETR’s ‘Revitalising Health and Safety’ strategy HSC’s ‘Health and Safety in Annual Reports’ guidance DTI’s draft OFR and Directors Reports Regulations ??***?? - p20 Top UK Companies’ H&S Information in Annual Reports 49% 1995 (FTSE100) ??***?? - p21 47% 2001 (FTSE350) 80% 2003 (FTSE350) H&S in Corporate Governance Combined Code – internal control guidance HSC/DETR’s ‘Revitalising Health and Safety’ strategy HSC’s ‘Health and Safety in Annual Reports’ guidance DTI’s draft OFR and Directors Reports Regulations ??***?? - p22 Corporate Manslaughter Developments Proposals in October? Great Western Trains Acquitted OLL Ltd Convicted P&O Acquitted Case dismissed Law Commission Proposals Reform Proposals 1990 ??***?? - p23 91 92 93 94 95 96 97 98 99 2000 01 02 03 04 Experience with prosecutions in England ‘Work-Related Deaths’ Protocol 253 cases referred to CPS since 1992 69 prosecutions 18 convictions Only 6 Corporate prosecutions have succeeded ??***?? - p24 Manslaughter Indictment “A, on the...day of...1996, unlawfully killed B” ??***?? - p25 Corporate Manslaughter – doctrine of identification “…where a corporation through the controlling mind of its agents, does an act which fulfils the pre-requisites of the crime of manslaughter…it, as well as its controlling mind or minds, is properly indictable for the crime of manslaughter” ??***?? - p26 Current law of gross negligence manslaughter “...The jury must go on to consider whether that breach of duty should be characterised as gross negligence and therefore as a crime. This will depend on the seriousness of the breach of duty committed by the defendant in all the circumstances in which the defendant was placed when it occurred. The jury will have to consider whether the extent to which the defendant’s conduct departed from the proper standard of care incumbent upon him... such that it be judged criminal.” ??***?? - p27 Unsuccessful attempts to prosecute ??***?? - p28 Zeebrugge Southall rail crash Ladbroke Grove rail crash Simon Jones Hatfield (Railtrack) The need for reform Accountability The doctrine of ‘identification’ is discredited The common law of manslaughter is unsatisfactory ??***?? - p29 Home Office Proposals, May 2000 Introduction of a specific “Corporate Killing” offence for ‘undertaking’ with three key elements 1.A ‘management failure’. 2.It is ‘the cause or a cause of death 3.The failure constitutes ‘conduct falling far below what can reasonably be expected...’ “There is a management failure if the way in which activities are managed or organised fails to ensure the health and safety of persons employed or affected by those activities” ??***?? - p30 Final Thoughts ??***?? - p31 Revitalising targets not being met Problems with an enforcement approach Prosecutorial selection of cases No sentencing tariffs Little evidence for deterrent effect of the current models Economically inefficient No alignment with business objectives Conflicts with other policy objectives Separate the enforcement and advisory functions?