With a recent case making the headlines in Manchester seeing the imprisonment of two construction company directors and large corporate fines being handed down by the Courts, Vikki Woodfine, a partner at DWF LLP, looks at the circumstances of this case and what can be learned from it for those working in the construction sector, including the importance of taking action on near misses.
On 8 April 2016 at Manchester Crown Court, two directors were sentenced to a combined total of 6 years and 8 months imprisonment and their companies issued with fines totalling just under £490,000 plus costs for health and safety related offences. The custodial sentences and high level of fines from a growing number of recent cases show a dramatic shift in the penalties, both financial and custodial, that Courts are now imposing following workplace safety incidents.
This case involved two companies: C Smith and Sons (Rochdale) Limited (“C Smith”) and Building and Dismantling Contractors Limited (“BDC”).
C Smith had been contracted to dismantle a building in Stockport, Greater Manchester and it was principal contractor for the demolition works. Days before the demolition works were to begin, BDC was subcontracted to dismantle the building and sell the parts on, through a “zero cost bid” arrangement.
Documents were found that showed that C Smith had originally planned to use machinery to demolish the building, including the roof, which would have kept its employees out of harm’s way and not have them working on the roof at all.
However, given that BDC needed the building materials to sell on to enable the contract to make money for it, it decided to dismantle rather than demolish the building. Therefore, the roof would be removed piece by piece, which would involve employees climbing onto the roof to dismantle it. The roof itself was corrugated steel sheets with plastic skylights that had been covered at some stage with steel sheets where they had deteriorated.
Work commenced on the dismantling of the roof on 15 January 2014 and on 20 January 2014 an employee of BDC, Scott Harrower, had a lucky escape when he had a near miss where he almost fell through one of the fragile roof lights after stepping on it, but he managed to stop himself falling. It does not appear that anything was done about this near miss and work continued.
Just one day later, on 21 January 2014 at approximately 9am, another employee of BDC fell through the roof from a height of around 25ft, sustaining serious and life changing injuries. The injuries included a fractured spine, pelvis, right leg, heel and wrist. The emergency services attended and advised BDC that the accident was a Health and Safety Executive (HSE) reportable incident before taking the injured man away.
Immediately following this serious incident, rather than suspend works and reflect upon the incident and its causes to establish whether work processes may need to be changed, BDC ordered its remaining employees back to work. Therefore, no consideration was given to updating any safe systems of work, risk assessments or necessary personal protective equipment to complete this work.
Later that same day at 4pm, Scott Harrower, who had experienced the “near miss” on the previous day, fell through a covered skylight and sustained what were described as fatal catastrophic injuries to his head.
Following a trial, High Court Judge Turner sentenced the director of BDC to six years in prison after he was found guilty of gross negligence manslaughter and ordered that the company pay a fine of £400,000 and costs of £55,000 for health and safety breaches. The director of C. Smith and Sons was sentenced to eight months imprisonment for a breach of the Health and Safety at Work, etc Act 1974 (HSWA) and the company ordered to pay a £90,000 fine and costs of £45,000 for its role as the principal contractor.
BDC and C Smith and Sons were prosecuted under ss.2 and 3 of the HSWA respectively. These sections place a duty on employers to ensure the health, safety and welfare of their employees (s.2) and non-employees (s.3) in so far as is reasonably practicable.
Additionally, prosecutions were brought against both companies for breaches of paragraphs 4 and 7 of the Work at Height Regulations 2005, in relation to the failure to plan, supervise and safely undertake the removal of the roof. C Smith and Sons were also convicted under the Construction Design and Management (CDM) Regulations 2007 for failing to ensure work was planned, regulated and monitored in a way which ensures it is carried out without risks to safety.
On sentencing each company, the Court will have applied the Sentencing Council’s Definitive Guideline that collectively covers the “Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences 2016”. These new guidelines give the Courts the power to impose significant fines based on a company’s turnover rather than profit. The guidelines also see a shift in the threshold where custodial sentences ought to be considered in health and safety offences, even where there has not been a fatality. It is strongly encouraged that any employer who has not read these guidelines ought to. They present the biggest shift in health and safety law for many years.
Key legislative changes
Companies operating in the construction sector have faced a double hit of significant legal changes in the last year. The first came in the form of the new CDM Regulations coming into force in 2015 extending the scope of the previous regulations, placing more responsibility on designers and changing the threshold for HSE notifications (among other things). The second change came on 1 February 2016 with the new sentencing guidelines. Guidelines have been in place for a number of years for Corporate Manslaughter and fatal health and safety offences, but for the first time now, we have a tariff type approach to health and safety offences for Courts to use.
It is a challenging time for corporate bodies to find themselves in Court for health and safety offences. Fines are demonstrably higher and prosecutors are presenting cases in such a way so as to seek a much higher “starting point” for fine levels.
In light of the heavy sentences now being handed down by the Courts, what steps can companies and directors take to ensure they avoid a similar fate?
There is no doubt that this case represents the very worst example of health and safety management on a construction site. There are very few companies that would embark on such blatant profit before safety practices, let alone ignore near misses and a serious incident in the way that happened here.
However, while this case represents an extreme example of bad practice, there are still some very useful learning points within the case that construction businesses should take heed of. It is a fair assumption that most companies facing a serious incident such as that which occurred on the morning of 22 January 2014 would have stopped work and sought to carefully examine the method of work being adopted before allowing workers to continue on site. Subject to the principal contractor being on site or being made immediately aware of such an incident, it is also fair to assume that they would step in and suspend works until they could be sure that the work was being conducted safely.
The importance of avoiding near misses
A message that is abundantly clear from this case is the importance to swiftly reflect on near misses. Had the near miss been treated seriously from 21 January 2014, the contractors should have reviewed the systems of work and risk assessments, and realised that clearly these were ineffective. This reasonably practicable step could have saved Mr Harrower’s life. The need to have near miss reporting systems and a positive health and safety culture where employees feel able to report any such incidents without fear of criticism is imperative in any high-risk environment. Near miss reporting systems do not only prevent accidents but also generate a higher awareness of safety among workforces. Involvement of all workers in such a scheme is key and consequently, workers should be trained on how to identify potential hazards and know how to properly report them.
Working at height is such a known and obvious risk, particularly in the presence of fragile roof lights, that naivety will never be a defence for anybody working within this sector. Clearly, the ideal solution is to avoid the need to work at height at all. In many cases, this is not possible and therefore fall protection or fall prevention systems ought to be engaged after a robust risk assessment has been undertaken to determine the best way to minimise the risk. In the case under discussion, the avoidance of any need to work at height was entirely possible as that was the initial plan. However, the decision to dismantle rather than demolish the building at the last minute (to make further profit) put those men working for BDC on the roof in January 2014, apparently with access only to harnesses that were over 40 years old for their safety control measure, thereby leaving a number of innocent men vulnerable to a risk of serious injury or death.
While the conviction of BDC’s director for gross negligence manslaughter reflects the sheer scale of his failings, it is the conviction of C Smith’s director for a health and safety offence that offers more of a chance to reflect for senior managers within the construction sector. Principal contractors and their directors cannot simply turn a blind eye to bad practices of their contractors on site. The consequences of doing so can be seen in this case. The importance to properly check contractors prior to engaging them, reviewing their safety plans and continuing to monitor them while on site has never been more important.
A good starting point for directors working within construction to consider is the joint HSE/Institute of Directors (IOD) Guidance document, “Leading Health and Safety at Work”. The IOD Guidance sets out a four-point agenda for health and safety matters and ensuring these are dealt with effectively at board level.
The direction for health and safety management must be set by the board and the company’s health and safety policies should emanate from the top and run throughout the company.
Delivery of your health and safety policy will depend on the effectiveness of the management in your company. Directors must satisfy themselves that adequate risks assessments have been completed for the company’s undertaking and that safe practices and processes are in place.
All companies regardless of size should facilitate reporting at board level. Collecting workplace health and safety data is a useful tool in directing the company’s strategy on health and safety.
As emphasised by the BDC case, reviews should not just be an annual exercise, but should be undertaken as soon as the company is aware of a near miss or an accident that affects its health and safety policy.
Should the worst happen…
…If an incident occurs, do not ignore it whatever the severity level. Hopefully this case highlights the importance of investigating even those near misses that do not result in an injury. The initial response to an accident must be quick, co-operative, and above all compassionate. Consideration for your employees and early co-operation with the police and HSE will help you to build a good rapport and demonstrate that your company is taking the matter seriously. This in turn will mean you are more likely to learn from any mistakes that led to the accident.
It is important, however, at this stage to achieve the right balance between co-operation and mitigation. It is therefore a good idea to seek legal advice as soon as possible so that good co-operation does not turn into self-incrimination.
Last reviewed 28 April 2016