Update of recent health and safety decisions in Construction cases

Alison Brown provides an update on recent cases: R v Howe & Son and R v Balfour Beatty and Geoconsult.

One of the most significant health and safety developments in recent months has been the Court of Appeal's decision in R v F Howe & Son (Engineers) Limited which laid down general guidelines for the sentencing of health and safety cases. In its judgment in November 1998 the Court of Appeal expressed concern over the level of fines imposed on conviction for health and safety offences and said that these were generally too low. The decision already seems to have resulted in a general increase in the level of fines imposed and has practical implications for all construction companies. It seems likely that all companies, and in particular large companies with the profits and income to meet substantial fines, will be faced with increased penalties on conviction for health and safety offences in future.

" target="_blank">New Sentencing Guidelines

In the Howe case the Court of Appeal laid down general guidelines to assist magistrates and judges in sentencing health and safety matters to ensure consistency in the sentences imposed by different courts. Although the Court refused to rule that the fine imposed should bear a specific relationship to the turnover or net profit of the defendant company and declined to set a 'tariff' applicable to particular offences, it made clear that:

• generally the fines imposed are too low;
• the fine imposed should reflect the means of the offender - generally, it should not be so large as to create a risk of bankruptcy. However, there may be cases where the offence committed is so serious that the defendant should not be in business at all;
• the fine must be large enough so that both the management and shareholders of the company appreciate the importance of complying with the legal requirements on health and safety.

The general factors which the court must take into account in deciding upon the appropriate level of fine are set out below:

One of the most significant changes is in the Court's attitude to the profitability and resources of the offending company. Where a company wishes to make a submission about its ability to pay a fine it must now supply to the court and prosecution copies of its latest accounts and any other financial information upon which it intends to rely in good time before the hearing. In the absence of such information the court will infer that the company is in a position to pay any financial penalty which it is minded to impose. In practice, where charges are brought against a substantial organisation the prosecution may well show the sentencing judge copies of the company's published accounts in support of their submissions regarding the appropriate level of fine. Many judges and magistrates already ask for details of the defendant company's turnover and operating profit before sentencing. This practice is likely to become more widespread and may well be supplemented by a detailed review of the company's most recent audited accounts.

The Heathrow Express Rail Link tunnel collapse

This case provides some illustration of the new robust attitude that the Courts have to health and safety offences. Balfour Beatty and Geoconsult were both convicted of offences under Sections 2 and 3 of the Health and Safety at Work Act 1973 in failing to ensure, so far as reasonably practicable, the safety of their employees and others in connection with the collapse in October 1994 of railway tunnels being constructed as part of the Heathrow Express Rail Link. The tunnel was constructed using a novel tunnelling system, the New Austrian Tunnelling Method (NATM). The judge found that the collapse was caused by the poor quality of the tunnel lining and because that lining was not adequately repaired when it started to fail.

Balfour Beatty did not contest liability and pleaded guilty to the charges brought. Geoconsult were found guilty after a full trial because they had not adequately monitored the tunnel linings as they were required to do under their contract with Balfour Beatty and had failed to provide warnings of the lining failure.

In sentencing the judge took account of Balfour Beatty's guilty plea and that it had taken exemplary remedial action after the collapse, but felt that the circumstances of the accident were such that there was a need to bring home both to the management and shareholders of the company the seriousness of the offence. The Judge considered the guidelines in Howe and took into account financial information in the public domain relating to Balfour Beatty's resources and profitability. A fine of £1.2 million was imposed. The penalty of £500,000 imposed on Geoconsult was lower than the judge would otherwise have awarded, but was reduced to take account of the company's resources and the effect of the fine on its business.

The Balfour Beatty case illustrates the seriousness which the courts attach to health and safety offences and the more robust attitude which they now appear to be adopting in sentencing such matters. Construction companies, particularly substantial organisations, can now expect increased fines on conviction, and this in turn is likely to result in more cases being referred to the Crown Court for sentencing where unlimited fines may be imposed: in the Magistrates Court there are limits on the level of fines up to a maximum of £20,000 for certain offences.