Increasing Risks to Companies

Few firms underestimate the importance of Health and Safety at work – both for the continued safety of their employees and clients and for the continued growth and success of the company. However, in recent years there have been increasing numbers of prosecutions for Health and Safety breaches and small firms are bearing the brunt. New legislation is part responsible for increased risk for both firms and directors and the recession is also a contributing factor.

Changing Legislation

The biggest change in recent years has been the introduction in 2008 of the Corporate Manslaughter and Homicide Act. This provides a legal framework in which corporations can be held responsible for manslaughter or homicide. In conjunction with existing laws, this legislation can see both the company and directors or executives facing prosecution and, in the case of individuals, possible custodial sentences.

Individuals at any level of a company can be prosecuted for negligence but directors (and particularly owner-managers in small firms) are at significant risk as they hold overall responsibility for practice, implementation and review of safety measures. Although successful prosecutions under the act have only amounted to three to date the number of cases being brought by the Criminal Prosecution Service (CPS) is rising dramatically, demonstrating that prosecutors are increasingly willing to use the legislation.

Fines Continue to Rise

Fines for companies breaching Health and Safety have, in the past, been considered relatively low. The trend in recent years has been an upward one. Recent cases have demonstrated that fines are in the hundreds of thousands for a single death. In 2010 new guidelines were introduced for sentencing in cases relating to fatality which suggest this trend will continue. In cases where multiple fatalities have resulted from negligent Health and Safety practices the fines now regularly reach well into many millions of pounds.

Recessionary Cuts

In addition to new legislation and increasing fines, the recession seems to be creating a significant risk to firms of all sizes, but particularly smaller companies. Reductions in staff levels have been seen across the country and reduced staff numbers can lead to increased risk levels. Management and executives need to be fully aware of all the implications of reducing staff numbers and to review existing safety measures and procedures.

Cuts in managerial staff can, in particular, result in a significant risk especially where they result in specialised Health and Safety experience being reduced. Investment in training during recession can fall, again, small companies are most likely to cut training budgets, but comprehensive training in safety (IOSH or NEBOSH courses in particular) should not be considered for cuts – especially where expertise has been lost and/or risks potentially increased.

With rising fines and an increasing willingness to prosecute under new legislation, it is increasingly imperative that firms remain focussed on creating safe working environments and ensuring that expertise in Health and Safety is not impacted by any cuts, however necessary those cuts may be. IOSH courses offer a safety net to small firms, facing complex legislation and rising liabilities.

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