With fines for health and safety offences disproportionately affecting small and medium enterprises (SMEs), how can small business owners protect themselves against the often devastating implications of a large fine?

In the past, extremely large health and safety fines were usually imposed only on large organisations with high commerciality and capability, and for very high-profile cases with multiple fatalities. However, since the Sentencing Council released its definitive guidelines on health and safety offences and corporate manslaughter in 2016, there has been an increase in the number of health and safety fines of £1M and above.

A study published in 2018 shows that this increase is disproportionately affecting smaller businesses, with SMEs paying on average twice as much as large companies in relation to their turnover.

Minimising Financial Damage from Health and Safety Fines

Fines for health and safety breaches can be as little as £50 or as much as £10 million. In order for small businesses to minimise risk, it is important to understand how these penalty amounts are arrived at.

Courts decide on sentences in accordance with Sentencing Council guidelines, which are based on a mixture of Court of Appeal decisions, public consultations, and public policy considerations. The guidelines dictate that when deciding on a fine, the court must consider the following factors:

• The company’s culpability, or blameworthiness. This is deemed to be ‘very high’ where there is a deliberate breach or flagrant disregard for the law, or ‘low’ where the failings were minor and occurred as an isolated incident. Anything in between might be ‘high’ or ‘medium’.
• The harm caused. This is according to a complicated risk matrix that ranges from death to minor injury on one axis, and ‘highly likely’ to ‘most unlikely’ on the other.
• The turnover of the company. There are four categories here: large (turnover of £50m and over), medium (£10m – £50m), small (£2m – £10m), and micro (not more than £2m).

These factors are fed into another chart, which tells the court the starting point for a fine, as well as the sentencing ranges. The court must also consider other factors, such as the actual profitability of the company, the steps it has taken to address the problem since the accident occurred, and so on.

What this means is that a large company that has committed an offence involving low culpability and low harm might only be fined £10,000. On the other hand, a micro company guilty of an offence involving very high culpability and death might be fined £250,000.

In order to avoid a crippling fine, it is therefore vital that the case is properly presented at court by an experienced advocate. The mitigating factors that are put forward (and the way in which they are presented to the court) can dramatically affect the level of any fine imposed, which for a smaller company can often make the difference between a bad financial year and complete bankruptcy.

Alternatives to Court Prosecution

Of course, it is preferable to avoid a court case (and subsequent fine) altogether.

At Regan Peggs Solicitors, we have extensive experience and an excellent track record in dealing with the HSE at all stages of their investigations. Should you find your business under a health and safety investigation, we may be able to persuade the prosecutors to issue a caution rather than prosecute at court.

We can also be present at any formal interviews with directors or members of staff, and can help you to avoid the adverse publicity that an investigation often brings.

If your case does end up in court, unlike most other solicitors we won’t hand you over to a stranger to represent you: from start to finish, you’ll deal directly with us. And, if your business has an insurance policy that covers legal expenses, we may be able to work with your insurers to minimise the expense to you.

Don’t risk the future of your business by trying to go it alone during a health and safety investigation. Contact us today for a no-strings chat about your case, or request a callback and we’ll be in touch as soon as we can.

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