Transcript Directors’ Duties – Impact on Directors of the Companies

Health & Safety Law
Employers duties and liabilities
Jonathan Cripwell, Partner
Overview
• Core duties / risk management / risk assessment
• Accident investigation – practical issues for
employers
• Enforcement options
• Co extensive legal duties
Criminal
Civil
Core duties on Employer
• Common law duty to take reasonable steps to avoid
foreseeable risks to employees
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Provide safe place of work
Provide safe systems of work
Provide safe plant and equipment
Provide competent staff
Core duties on Employers
Health and Safety legislation
• Statutory duties imposed upon employers through
primary legislation
Health and Safety at Work Act 1974
• Secondary legislation through Regulations
Management of Health and Safety at Work
Regulations 1999
Risk management
Why is it necessary?
• To comply with core duties
• To control health and safety risks in your business
and help prevent accidents and ill health
• Integral part of the business and its success
Risk management
What is it?
• Process of assessing risks that arise in the
workplace
• Putting in place sensible measures to control
identified risk
• Implementation, monitoring and review of those
measures
Risk Assessment
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Identify the hazards
Decide who might be harmed and how
Evaluate the risks and decide on precautions
Record your findings and implement them
Review your risk assessment
Risk Assessment
• Engage all employees in the process - from
management to shop floor
• Check that what you say you do happens in
practice
• Ensure employees have the right training
• Ensure plant and equipment is properly used and
maintained
• Is there evidence of compliance with Health &
Safety law
Accident Investigation
• Criminal liability
Sanction is punishment for breach of the criminal
law
• Civil liability - law of negligence / statutory duties.
Sanction is compensatory - damages for injury/loss
Accident Investigation
The Enforcement Authorities (criminal liability)
• Health & Safety Executive
• Local Authority
• Crown Prosecution Service
Accident Investigation
Powers of Inspectors
• Enter premises
• Direct work areas to be undisturbed during
investigation
• Examine and investigate as necessary
• Require production of documents
• Disable dangerous plant
Accident Investigation
Require persons to provide information/ answer
questions
• S9 Criminal Justice Act (voluntary witness
statement)
• S 20 H&SWA (compelled witness statement)
• Interview under PACE (suspects)
Accident Investigation
Pitfalls in practice
• Interviews under caution (suspect - senior
management)
• RIDDOR forms
• Disclosure to HSE of potentially privileged
documents
• Must be in a position to demonstrate evidence of
safety management systems/policies/risk
assessments/training records
Enforcement options
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No formal action
Simple Caution
Improvement Notice
Prohibition Notice
Prosecute
Criminal Liability – who gets charged?
• Health & safety offences can be committed by a
company, its directors and managers personally
• Prosecution of individuals – consideration is given
to the management chain and to fix criminal liability
upon those who are in the position of authority and
who have the power to decided corporate policy
and strategy.
Criminal Liability – Statutory framework
Health and Safety at Work Act 1974
• S2 - Duty of every employer to ensure ,so far as is
reasonably practicable, the health, safety and
welfare at work of all his employees
• S3 – Duty of every employer to conduct undertaking
to ensure, so far as is reasonably practicable that
persons not in his employment are not exposed to
risks to their health or safety (subcontractors/public)
Criminal liability – Statutory framework
Health and Safety at Work Act 1974
• S37 – Offences by bodies corporate
Imposes personal liability where an offence by a
company is committed with the consent and
connivance of, or to have been attributable to
neglect on the part of any director, manager,
secretary or other similar officer he as well as the
company shall be guilty of that offence
Criminal liability – Statutory framework
• Test for neglect – whether or not the Defendant
ought to have been aware that a particular practice
occurred – not whether or not he actually knew.
• Consent and connivance - imply both knowledge
and a decision made on such knowledge – (turning
a blind eye)
Criminal liability – Statutory framework
Breach of specific Health & Safety Regulations;
• Management of Health and Safety at work
Regulations 1999
• Provision and Use of Work Equipment Regulations
1998
• CDM Regulations 2007
• Work at Height Regulations 2005
Sentencing
• Fines should reflect the gravity of the offence and
the means of the Defendant
• In assessing the gravity of the breach consider how
far short of the appropriate standard the Defendant
fell
Sentencing
Aggravating factors
• Safety compromised for profit
• Failure to respond to warnings
• Whether death or serious injury has occurred
Sentencing
Mitigating factors
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Prompt admission of responsibility
Co operation with enforcement authority
Steps to remedy deficiencies
No previous convictions
Sentencing
Health and Safety (Offences) Act 2008
• Fine – £20,000 for each offence in the Magistrates
Court, unlimited fine in the Crown Court;
• Imprisonment
Up to 12 months Magistrates Court
Up to 2 years in Crown Court
• Investigation costs
• Director disqualification if convicted of an indictable
offence in connection with the promotion, formation or
management of a company (The Company Directors
Disqualification Act 1986)
Corporate Manslaughter
Pre 6 April 2008
Gross negligence manslaughter
• Difficult to successfully prosecute large companies –
only 6 convictions between 1992 -2005 mainly of small
owner managed companies.
• Conviction required ‘directing mind’ of organisation to be
identified with requisite culpability (a senior individual
who embodied the company in his actions)
• Herald of Free Enterprise in 1987 to rail disasters at
Hatfield and Potters Bar failed to lead to successful
convictions despite clear indications of safety
management shortcomings
Corporate Manslaughter
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Corporate Manslaughter and Corporate Homicide Act
2007
Act - applies to
Companies
Trades Unions and employers associations if employer
Public bodies – local authorities,NHS bodies
LLP’s
Partnership’s
Government departments
Police forces
Corporate Manslaughter
The position of individuals
• Offence concerns corporate liability of organisations
not individuals
• Prosecution is against the organisation itself not
directors, senior managers or other individuals
Corporate Manslaughter
New offence
• Does not impose any new duties – all existing
duties under the civil law to ensure safe systems of
work, safe plant and machinery, safe workplaces,
and that processes for managing health & safety
are adequate, remain unaltered
• Removes the obstacle of the ‘directing mind’
principle
Corporate Manslaughter
Company guilty of corporate manslaughter if:(1) The way in which its activities are managed or
organised
a) Amounts to a gross breach of a relevant duty of care
owed to deceased and
b) Causes a person’s death; and
(2) The way in which its activities are managed or
organised by its senior management is a substantial
element in the breach
Corporate Manslaughter
Two stage approach
1) Must owe a duty of care to deceased
a) As employer
b) Occupier of premises
c) Supplier of goods /services; carrying out of construction or
maintenance; carrying out of any other activity on a
commercial basis; use or keeping of plant / vehicles
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Breach of duty must be gross – conduct far below what can
reasonably be expected of the organisation in the
circumstances
Jury must consider failure to comply with H&S legislation;
seriousness of failure and risk of death that failure posed
Corporate Manslaughter
2) Senior managers
• A substantial part of the failure must have been at a
senior level
• Senior level means the people who make significant
decisions about the organisation
• Links into the importance the Act places upon a
‘safety culture’ within the organisation
• Act focuses on systems of work and away from
individual fault
Corporate Manslaughter
Sentencing
• Unlimited fine
• Publicity Order – organisation must publicise the
fact of conviction
• Remedial Order – requiring organisation to address
the cause of the fatal injury
• Prosecution costs
Civil liability
• Core duties
Common law duty of care in negligence
Statutory duties under Regulations
Breach of which gives rise to a claim in damages.
Civil claims for damages
• Letter before action under the Personal Injury
Protocol
• Matter referred to employers liability insurer
• Investigation into liability
• Settlement?
Civil claims for damages – Litigation
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Statements of Claim and Defence
Disclosure
Witness Statements
Expert Evidence
Trial
Assessment of damages
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rebecca