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A new 'squeezed middle' emerges in H&S fines

“Fines…have in the past been criticised as too low.”

At the consultation stage, the key aim of the new Health and Safety Executive’s prosecution guideline was obvious. Financial penalties must increase. Nine months in, the Sentencing Council’s main objective is being achieved.

Fines in construction were up 89 per cent between February and August compared with the same period last year. The largest guideline fine in the industry was £2.6m for Balfour Beatty Utility Solutions.

But while seven-figure fines are rapidly becoming a matter of routine, to date the headline-grabbing penalties have largely been imposed on other sectors. It is only a matter of time before the courts impose further significant fines on larger construction businesses.

Disproportionate impact

In the meantime, the guideline is having a painful effect on SME entities. While bigger organisations are yet to be fined anything approaching 0.1 per cent of turnover, case after case sees construction SMEs deprived of far larger proportions of revenue (typically between 1.5 per cent and 3.75 per cent).

The sums fined are lower but their effects on the respective businesses are far more significant.

“It is only a matter of time before the courts impose further significant fines on larger construction businesses”

There are a small number of large, well-resourced contractors sophisticated in their approach to safety management and rightly so; their complex and sizeable output gives rise to the potential for catastrophic events.

Heed the warning

However, with sites where less than 15 people work estimated to produce two-thirds of construction fatalities, there is a proliferation of smaller organisations where safety is less well understood, people are less engaged and competence is often lacking.

The guideline states that fines should be “sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation”.

With compliance at the core of the guideline’s message, those in the new ’squeezed middle’ must heed the warning effect of fines already imposed.

Rhian Greaves is safety, health and environmental regulatory head of compliance & strategic support at Clyde & Co

  • Rhian Greaves safety health and environment head of compliance Clyde and Co

    A new 'squeezed middle' emerges in H&S fines

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