Legal Update

1. Legal Update 16May 2019 IOSH North Wales Branch

2. Agenda • Fee For Intervention (FFI) • Prohibition Notices – “Chevron” • RIDDOR • NEWSFLASH: - ‘Workplace Exposure Limits’ • Sentencing Guidelines: – Sentencing Council Review • H&S Sentencing • Appeals Against Sentence

3. Fee For Intervention • Increase from £129 to £154 per hour • Effect from 6 April 2019 • £15.1m income vs. £17m cost of administering (2017/2018) • Emphasises importance of proactive approach to H&S and prioritising compliance

4. Prohibition Notices – Chevron The Facts? • 23 April 2013 - HSE took the view that stairways and gratings leading to helipad weakened by corrosion • Prohibition Notice served - Chevron ordered to stop using the stairways • Some of the metalwork was removed for testing by Chevron and those tests confirmed that the metalwork met the relevant British Standard and was not unsafe Challenge? • Chevron appealed against the Notice • Employment Tribunal cancelled the Notice • HSE appealed – but cancellation affirmed • Conflicting E&W judgment : - Rotary Yorkshire v Hague [2014] EWHC 2126 (Admin): “…only evidence available or which could reasonably have been available to the HSE Inspector could be taken into account when deciding an appeal”

5. Prohibition Notices – Chevron cont.… Decision? • Supreme Court upheld the previous decisions • Ruled that later evidence can be taken into account when determining an Enforcement Notice appeal • Lady Black said that: “When the inspector serves the Notice, section 22 makes clear that what matters is that he is of the opinion that the activities in question involve a risk of serious personal injury. If he is of that opinion, the Notice comes into existence. However … when it comes to an appeal, the focus shifts. The appeal is not against the inspector’s opinion, but against the Notice itself …. The Inspector’s opinion about the risk, and the reasons why he formed it and served the Notice, could be relevant … but I can see no good reason for confining the Tribunal’s consideration to the material that was, or should have been, available to the inspector."

6. HSE Review of RIDDOR • Currently meets its objectives, remains ‘fit for purpose’ and could not easily or desirably be replaced with another system. • Recommendations: • Narrow the scope of Reg. 5 (injuries to non-workers) to align with Reg. 4 (injuries to workers) • Expand the list of reportable occupational diseases • Simplify and clarify existing RIDDOR guidance • HSE not taking recommendations forward at this time.

7. Workplace Exposure Limits • Reintroduces biological monitoring guidance values • Implement EU changes from 21 August 2018: • New WELs / entries • New 8-hour time weighted averages • New short term exposure limits • New skin notations • Reductions to existing WELs • Transitional arrangements until 21 August 2023 • HSE is currently consulting on revisions regarding carcinogens and mutagens.

9. Sentencing – Impact Assessment • Fine amounts imposed on organisations, 10 months pre‐guideline compared with 10 months post‐guideline

10. Sentencing – Impact Assessment • Median fine imposed 16 months pre-guideline compared with 16 months post-guideline

11. Sentencing – Impact Assessment • Sentence outcomes for offenders sentenced for health and safety offences (2011-2017)

12. Sentencing – Impact Assessment • Fines imposed on individual offenders 10 months pre-guideline compared with 10 months post-guideline

13. ATE – The Facts • Leading used truck and trailer specialists • Used scrap metal dealer to dismantle trailers for many years – worked from a number of premises • Didn’t pay him for work but he was allowed to keep the metal and sell it for scrap • Scrap metal merchant hit hard times so ATE allowed him to use part of their premises to carry on his business – he paid them £50 per trailer in lieu of rent. Debate as to whether defined area. • Some debate over method used (albeit involved FLT to provide support) • Scrap metal merchant fatally injured when trailer he was dismantling fell and struck him on the head • No witnesses

14. ATE - Plea • Initially pleaded not-guilty – no responsibility for contractors work / method • Later pleaded (on invitation of HSE) guilty to Reg 3 – MHSWR (s. 3 HSWA dropped) – on basis didn’t provide written risk assessment for few occasions ATE’s own employees completed same task (albeit using different method as had crane available) • HSE criticised contractors method but no criticism of ATE’s own method • ATE / HSE agreed: • Low culpability • Level A harm (ATE said low likelihood, HSE said medium) • Offence had “more than minimal, negligible or trivial connection with the accident leading to Mr Price’s death but that it was not a major cause” – on basis that possible contractor would have changed his method if he’d seen ATE’s risk assessment • Plea basically accepted guilt in respect of contractor via breach to its own employees

15. ATE – Crown Court • Found high culpability: • failed to put in place measures that are recognised standards in the industry • allowed the breach to subsist over a long period of time • Agreed Level A harm but found high likelihood • Turnover meant ATE was just within range for “medium” • Gave full credit for plea • Fined £475,000 • Starting point £625,000 • Increased to £750,000 for actual harm and risk to others • Reduced for plea and mitigation

16. ATE – Court of Appeal • Grounds for appeal • Fine manifestly excessive • Judge made factual errors • ATE not completed task itself many times • Period of offending limited on indictment • No industry standards • ATE employees separated from contractors activities • Judge departed from agreed basis of plea without justification • Low culpability was correct • Low likelihood of harm due to many years without accident – Harm Category 3 – up to 2

17. ATE – Court of Appeal Prosecution position: • Low culpability • (1) it was not an operation habitually undertaken; • (2) ATE otherwise had good safe systems of work; • (3) ATE genuinely, though mistakenly, believed that it had no responsibility for the way Mr Price did his work; • (4) there had been no prior warning. • The seriousness of harm was at level A. • There was a medium likelihood of the risk of harm materialising; the work was inherently dangerous with a hidden lurking danger; it was undertaken without a risk assessment. • Factor 2 ii) was engaged so an uplift was to be considered (to harm category 1).

18. ATE – Court of Appeal Judgement • Confirmed that court not bound by agreed position but promoted sensible agreement and that court should only depart after careful consideration. • Some concern re artificial nature of plea • Culpability - agreed low • should only consider ATE’s own method not method of contractor • No industry standard • Went outside time period in indictment • Judge not justified in finding high culpability

19. ATE – Court of Appeal Judgement… • Medium likelihood of harm (Harm Category 2) • Accident free period didn’t mean likelihood of harm low • Paragraph 2a – risk to others – didn’t apply as no evidence • Paragraph 2b – death – did apply (moved up to Harm Category 1) • Starting point at top of Harm Category 1 - £300,000 • Full credit for plea • Fine reduced to £200,000

20. Appeals Against Sentence • Some appeals are successful but on the whole an appeal is unlikely to make a material difference to the outcome … • A fatality justifies moving not only into next category but to the top of next category range • Inconsistent approach to VLO • “Large” company table is broadly sufficient • Risks of VLO status

21. Recent Appeals Against Sentence • Squibb Limited • Demolition contractor for school refurbishment project • Asbestos survey conducted before work commenced and steps taken to remove the identified asbestos • Additional asbestos later discovered after demolition works had already begun • Found guilty of breaching s.2 but acquitted s.3 • Turnover £29.5m, High Culpability, HC2 • Fined £400,000

22. Recent Appeals Against Sentence • Squibb Limited • Unsuccessful appeal against conviction • Court of Appeal disagreed with the company that its culpability could be properly categorised as Medium • All parties agreed asbestos exposure = Level A Harm • Court of Appeal agreed with the company that the judge had been wrong to disregard expert evidence regarding the likelihood of harm from exposure • Fine reduced to £190,000 (High Culp, HC3)

23. Recent Appeals Against Sentence • Squibb Limited – Learning Outcomes • Importance of expert evidence in sentencing • Approach to managing asbestos: • Don't just rely on vague or verbal assurances • Detail of survey proportionate for the work • Check any survey caveats and assumptions • What areas the surveyor was able to access? • Does this correspond with the areas for work? • Act upon survey recommendations

24. Recent Appeals Against Sentence • NPS London Limited • Joint venture between property consultant and LA • Responsible for managing refurbishment project • Commissioned asbestos survey but failed to identify deficiencies in survey. • Asbestos later discovered by contractor Squibb • Guilty plea to breaching Section 3 • Turnover £4.9m, High Culpability, HC2 • Fined £370,000 (treated as large organisation based on turnover of parent company)

25. Recent Appeals Against Sentence • What do the Sentencing Guidelines say?

26. Recent Appeals Against Sentence • NPS London Limited • Court of Appeal concluded judge had been wrong to treat NPS as a Large organisation • Just because an offender is a subsidiary is not sufficient for the court to take into account the resources of a parent or linked organisation • Resources of linked organisation may still be relevant when assessing financial circumstances in the round (e.g. where subsidiary can rely on parent for financial support in paying a fine) • Fine reduced to £50,000

27. Recent Appeals Against Sentence • Faltec Europe Limited • Manufacturer of parts for other car manufacturers (Nissan, Renault, BMW, Honda) • Two outbreaks of legionella between October 2014 and June 2015. Four employees and one non-employee who lived near the company’s premises were diagnosed with Legionnaire's Disease • Explosion involving flocking machine on 16 October 2015 which injured an employee • Three offences: Section 2 and Section 3 (legionella) and Section 2 (flocking machine explosion)

28. Recent Appeals Against Sentence • Faltec Europe Limited • Turnover £36.4m • Fine £1.6m (£800k in connection with each incident)

29. Recent Appeals Against Sentence • What do the Sentencing Guidelines say?

30. Recent Appeals Against Sentence • Faltec Europe Limited – Appeal • Legionella fine reduced from £800,000 to £380,000 • Flocker machine fine upheld at £800,000

31. Recent Appeals Against Sentence • Faltec Europe Limited – Other Lessons • Judge was critical of “weak line management, with insufficient priority being given to even the most fundamental issues of health and safety”. • “simply subcontracting out [health and safety] obligations cannot provide an answer to failures to properly monitor and overview that contractor's work.” • Impact on sentencing of making a reserve in accounts against a future?

32. Questions? Emma Evans Senior Associate – Pinsent Masons 0161 234 8346 / 07721 118 112 Emma.Evans@pinsentmasons.com