When an HSE Inspector Calls – Part 2

As part of our ‘Health and Safety at Work Act – 50 years on’ feature, Jo Lewis, Michael Salau and Daniela Miklova consider the HSE’s approach to enforcement action with a review of recent prosecutions. They explore the enforcement trends within the construction industry to minimise the risk of fatalities and non-fatal injuries within the workplace.

The HSE Enforcement Policy Statement

Whilst one of the main objectives of the HSE is to prevent work related death, injury and ill-health, in instances where legislation has been breached inspectors can and will take enforcement action. The HSE’s Enforcement Policy Statement provides that any enforcement action taken must be proportionate, targeted, consistent, transparent and accountable. This is particularly relevant within the construction industry which remains one of the most hazardous industries in the UK.

Prosecution is viewed by the HSE as an essential part of enforcement to ensure that that those in breach of the law are held to account when a serious breach of the law has occurred. In England and Wales, the HSE use their discretion to decide whether to proceed with health and safety prosecutions, however, no prosecution will be pursued without sufficient evidence to provide a realistic prospect of conviction and only if that prosecution is in the public interest. In the event of breaches committed by individuals, the potential outcome includes disqualification, fines and custodial sentences, where deemed appropriate.

The Health and Safety at Work etc. Act 1974

Sections 2 to 6 of the Health and Safety at Work etc. Act (“HSWA”) 1974 outline general duties that are owed by employers or persons in control of premises. Where the HSE finds that an employer or person has contravened a general duty under HSWA 1974, it can prosecute the relevant entity or individual. Section 7 of the HSWA 1974 requires employees to take reasonable care for the health and safety of themselves and others who will be affected by their acts or omissions whilst at work. This section of the HSWA 1974 is relevant where the HSE find that the employer has taken all the necessary steps to control and minimise risks within the workplace but find that an employee has committed a breach that warrants enforcement action.

Under section 33 of the HSWA 1974, it is an offence to intentionally obstruct a HSE investigation and/or an inspector in the exercise or performance of their powers or duties. Obstruction pursuant to section 33 of the Act includes preventing or attempting to prevent any person from appearing before an inspector or from answering questions posed under section 20(2) of the HSWA 1974, providing an inspector with a known false or a reckless statement or intentionally falsifying documents or records with intent to deceive inspectors. Where the HSE find that a section 33 offence has occurred, the Courts have powers to impose fines and/or periods of imprisonment on the relevant person. The maximum penalties that can be imposed on a defendant for a breach of section 33 of the Act in a particular case are determined by the application of the sentencing guidelines.

Sentencing Guidelines for Health and Safety and Corporate Manslaughter

On 1 February 2016, the new sentencing guidelines for health and safety offences were implemented following a consensus that sentences imposed on organisations and individuals were insufficient compared to the severity of the breaches. The sentencing guidelines seek to implement a fair, proportionate and consistent approach to sentencing, which the sentencing judge achieves following consideration of culpability, the seriousness of harm risked and the likelihood of harm. Within the construction industry, the likelihood of harm arising from a breach of health and safety regulations often outweighs the level of culpability due to the nature of risks within the industry’s workplace. Therefore, since the introduction of the sentencing guidelines, health and safety sentencing has become more severe as companies are increasingly falling within the higher categories of offences.

For offences that were committed on and after 12 March 2015, the maximum penalty in the Magistrates’ court is an unlimited fine or imprisonment for a term not exceeding six months, or both. In the Crown Court, the maximum penalty is an unlimited fine or imprisonment not exceeding two years or both.  Alongside the likelihood of harm, the sentencing guidelines consider the size of an organisation by reference to its annual turnover to determine the starting point for a fine. A ‘Micro’ organisation with turnover less than £2 million convicted of a very high culpability health and safety breach would face a fine starting from £250,000 compared to a ‘Large’ organisation with turnover above £50 million that would face a fine starting from £4 million for the same offence. Consequently, the level of fines imposed by the Courts has risen significantly since implementation of the new sentencing guidelines. These state that where an offending organisation’s turnover very greatly exceeds the threshold for ‘Large’ organisations, known as ‘Very Large’ organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence. The Sentencing Council’s fourth annual consultation is currently open and includes proposals to clarify guidance on sentencing ‘Very Large’ organisations. This which will facilitate the distinction between ‘Large’ and ‘Very Large’ organisations for sentencing purposes. The Sentencing Council’s consultation is open until 27 November 2024.

In any event, the sentencing guidelines afford sentencing judges considerable discretion to impose penalties that they deem fair and proportionate in the circumstances. As the facts vary case by case, it is increasingly challenging for companies and individuals to navigate prosecutions and anticipate the level of the penalty imposed. Further, as the court is advised to take account of any potential reduction for a guilty plea in accordance with section 144 of the Criminal Justice Act 2003, we anticipate that companies and individuals are likely to be encouraged to enter early guilty pleas for health and safety offences to reduce the financial penalties imposed by the court, where possible.

Severe financial penalties

2019

Valero Energy UK Ltd were investigated by the HSE following an explosion of an oil refinery in Pembrokeshire in 2011 which caused the death of four workers. The investigation concluded that the refinery’s safety management systems possessed longstanding failures which resulted in a flammable atmosphere that was not controlled. As Valero Energy UK Ltd were the operator of the refinery, the HSE found the company to have breached sections 2 and 3 of the HSWA 1974. Consequently, in 2019 Valero Energy UK Ltd were fined £5 million and ordered to pay costs of £1 million. This remains the largest financial penalty secured by the HSE to date, however, its growing appetite for prosecutions suggests that higher financial penalties may follow in due course.

2021

The largest fine in 2021 was handed to National Grid Gas plc when it was discovered that the records for 769 buildings were not transferred when the company sold part of its operations to Cadent Gas Limited in 2016. Consequently, routine safety inspections, condition surveys and maintenance could not take place, thereby exposing residents and the public to severe risks. National Grid Gas plc pleaded guilty to a breach of section 3(1) of the HSWA 1974 and were fined £4 million and costs of £91,805.

This prosecution demonstrates the severity of the fines that can be imposed in instances when no actual harm has occurred following a breach of health and safety regulations. On this occasion, the HSE considered that the residents and members of the public were exposed to a significant level of harm because of the unavailable records, which was sufficient to warrant the substantial penalty imposed.   Moreover, this was not the first occasion that National Grid Gas plc had breached section 3 of the HSWA 1974 – it was fined in December 2015 and January 2016 for £2 million and £1 million respectively and £20,000 in 2013. While these previous penalties would be relevant to the level of the fine imposed on National Gas Grid plc in 2021, the fines also illustrate the growing scale of financial penalties enforced on the same company for similar breaches across a decade.

2022

On 11 February 2019, a woman died in an explosion at her home in West Yorkshire following a gas leak in a six-inch main that had not been maintained by Northern Gas Networks. The HSE found that the gas main had not been maintained by Northern Gas Networks as it had not been shown on the supplier’s drawings. Northern Gas Networks Limited were fined £5 million and ordered to pay £91,487 in costs. The HSE’s investigation highlighted ‘a failure by Northern Gas Networks Limited to follow their own safety procedures, in this case requiring the prompt and efficient investigation and correction of anomalies in their records’.

2023

On 9 November 2016, seven passengers were killed and 21 more suffered serious injuries when a tram derailed. The tram driver was cleared of failing to take reasonable care at work and argued that external factors including poor lighting and signage on approach through the tunnel had disorientated him. The Office of Rail and Road investigated the incident to assess whether breaches of health and safety legislation for railways had occurred.

Transport for London and Tram Operations Limited were fined £10 million and £4 million respectively for breach of section 3(1) of the HSWA 1974. Both organisations were ordered to pay £234,404 in costs and a victim surcharge of £170. Pursuant to the sentencing guidelines, Transport for London were sentenced as a very large organisation with high culpability of a category 1 offence, whereas Tram Operations Limited were sentenced as a medium company with high culpability of a category 1 offence. During sentencing, Mr Justice Fraser stated that ‘this was undoubtedly an accident waiting to happen’ noting the ‘disturbing’ level of ‘complacency’ around the inadequate lighting and lack of visual cues in the tunnel.

2024

On 17 October 2019, a man died and another man sustained lifechanging injuries while decommissioning a North Sea gas rig. The HSE investigation found that Veolia ES (UK) Limited, a recycling company, failed in respect of planning and risk assessment which did not adequately cover the planned work during the decommission. In July 2024, Veolia ES (UK) Limited pleaded guilty to breaching section 2(1) of the HSWA 1974 and was fined £3 million and ordered to pay £60,000 in costs. The HSE inspector in charge of the investigation commented that ‘this incident, in an emerging industry, highlights the level of controls required to safely demolish what are large, dangerous structures. Veolia did not meet these standards and tragically one life was lost, and another forever changed.’

The fine imposed against Veolia represents the largest fine imposed by the HSE in 2024 to date, and is one of the largest HSE fines of all time demonstrating the severity of the health and safety breaches that have occurred in recent years.

Penalties for obstructing investigations

In August 2023, the HSE found that Amro Construction Ltd (“Amro Construction”) had failed to assess the on and off-site fire risks despite previous advice and enforcement from the HSE in relation to the matter. The HSE identified several health and safety regulation breaches including the presence of an open flame gas stove and a lack of fire precautions on a timber-frame housing development.

During the HSE’s investigation, David Taylor, Amro Construction’s Managing Director, deliberately obstructed the inspector by refusing to provide information requested as part of the HSE investigation which caused a delay of several months. David Taylor pleaded guilty to breaching Section 33(1)(h) of the HSWA 1974 and was fined £3,000 and ordered to pay costs of £1,935. The sentencing judge commented that ‘this type of proactive prosecution should highlight to the construction industry that… directors will also be prosecuted where they intentionally obstruct our inspectors.’

Whilst there have been limited instances where the HSE have prosecuted individuals for obstruction, this prosecution evidences that the HSE are willing to prosecute individuals who seek to intentionally obstruct investigations, as it delays the outcome of HSE investigations and any necessary enforcement action. Therefore, companies and individuals must take care during HSE investigations that they do not inadvertently or intentionally obstruct inspectors during HSE investigations to avoid breaching section 33 of the HSWA 1974.

Proportionate enforcement action

In December 2023, Profascias Ltd and its director were prosecuted after an employee suffered serious injuries having fallen from height during the supply of fascia boards and soffits. The HSE’s investigation found there had been insufficient planning by Profascias Ltd to provide a safe platform from which the employee could work at height, such as a properly erected scaffold, as opposed to a ladder. The HSE’s guidance concerning work at height states that ladders should only be used for access or where it is not reasonably practicable to provide safer working platforms.

Profascias Ltd pleaded guilty to breaching Section 4(1) of the Work at Height Regulations 2005. Consequently, the company was fined £6,000 and ordered to pay £2,000 in costs. Imposing the sentence, the sentencing judge remarked that ‘because of the financial penalty, the company may end up being wound up completely; but that is a consequence of the conviction.’

Notwithstanding the risk to the company’s operations, the sentencing judge considered that the financial penalty was proportionate considering the severity of the breach, as falls from height remain one of the most common causes of work-related fatalities. This is the case despite the well-known risks associated with working at height. Therefore, while all HSE enforcement action must be proportionate, the purpose of the penalties imposed are to ensure those who breach the law are held to account and this outweighs the possible impact that the enforcement action might have on an organisation.

Conclusion

Over the last few years, there has been an increased focus on health and safety in the construction industry, and there is a clear appetite for prosecution of individuals and companies following the introduction of the Sentencing Guidelines for Health and Safety and Corporate Manslaughter offences. This has resulted in a significant increase in severe enforcement action against individuals and businesses with seven figure penalties being imposed since the new sentencing guidelines were implemented.

The HSE’s principles of enforcement require the regulator to remain consistent with its approach, which suggests that the appetite for enforcement and level of enforcement action will remain within construction whilst the risks of fatalities and workplace injuries remain high.

Beale & Co regularly advise and support commercial practices, and their insurers, with HSE investigations and have specialist expertise in regulatory matters.

Please do not hesitate to contact Joanna Lewis (j.lewis@beale-law.com) or Michael Salau (m.salau@beale-law.com) for advice concerning a construction or environmental incident or for further information on HSE investigations