Many companies take the unfortunate view that breaching health & safety is rather like getting a corporate parking ticket – an irritation; mildly expensive; but something which can just be put down to experience.
They couldn’t be more wrong.
A conviction for a health & safety breach is not only a criminal matter (and individuals as well as companies can be prosecuted) but it can also cripple the company’s ability to generate profits for year, after year, after year. It can be the legal equivalent of a curse – condemning one proposal after another to end up in the bin rather than generating profits for the company.
To see how this can come about let’s consider a hypothetical “Company X”. But please remember that although the company is fictitious the legal penalties and side-effects are not.
Let’s assume that an employee is injured through being hit by a forklift truck. What are the potential (i.e. common) offences which may be involved?
- Failure to provide a suitable and sufficient risk assessment – penalty is a fine of up to £20,000 at the Magistrates’ Court, or an unlimited fine at the Crown Court
- Failure to provide a safe system of work for forklift truck operations – and the available penalties are a repeat of the above.
So far the potential bill appears to be a fine totaling £40,000 or even more (so this is getting to be some parking ticket, because Company X’s insurance company certainly won’t pay the fines!) but this is only the start. What about the prosecution costs (another potential 5-figure penalty which the insurance probably won’t cover), and defence legal costs, and the amount of management time spent by Company X in investigating and defending the court case rather than building the business?
And then there’s the adverse publicity. And, of course, there is a very real danger that the injured party will also sue Company X for negligence and claim damages under civil law. Will the insurance company help with that claim as well?
Maybe they will; maybe they won’t. But even if they do the renewal premium demanded will be interesting to say the least – and that’s assuming the insurers are even willing to offer a renewal of the risk.
So far so bad; but in reality the nightmare for Company X is only just beginning.
Every time they respond to a tender request from a local authority, or a government department, or a major company they will be asked to complete a “Pre Qualification Questionnaire”.
The PQQ is a document designed to weed out unsuitable applicants at an early stage in the tender process, and for Company X it is likely to prove lethal.
Within the PQQ will be an innocuous question such as “Have you been convicted of a health & safety breach within the last 5 years?” Company X will have no alternative but to own up because their conviction will be shown on the public HSE database, accessible to all with just a few clicks of the mouse.
At this point they may as well save themselves the postage and just drop the PQQ into the bin, because that’s where the potential client will probably file it. The client will have no interest in employing a potentially dangerous contractor/ supplier because a second accident – no matter how unlikely – could rebound onto them. Why? Because they have a legal obligation to use safe contractors so logically they’re not going to take any chances.
And this unhappy episode will repeat for year after year until the conviction falls outside the time limits specified in the PQQ. In practice it’ll probably take about 5 years before the curse finally peters out.
Still think a health & safety breach is just a corporate parking ticket?
This months guest Article has been provided by Andy Farrall the owner of Management & Safety Training Limited. Andrew has many years experience in this sector and can provide services to help counter any potential claims by ensuring that you have the right policies and procedures in place.