Health and safety

In this chapter of our Annual Insurance Review 2018, we look at the main developments in 2017 and expected issues in 2018 in the health and safety sector.

Key developments in 2017

As anticipated, 2017 has seen an increase in the severity of sentences for health and safety offences. This is the first full year that the Health and Safety Sentencing Guidelines, effective from February 2016, have been in place.

Fines of £1m or more have become commonplace, with a number of record-breaking fines being imposed.The highest fine of the year was £2.5m for Iceland Foods in September, after the supermarket retailer was found guilty of two offences under the Health and Safety at Work etc Act (HSWA) following the death of an external contractor.

Other notable fines include two against the bread makers Warburtons, of £1.9m and £2m, for two offences arising out of separate health and safety-related accidents. Wilko Retail Ltd. received a fine of £2.2m after pleading guilty to four offences under the HSWA.

The number of directors being sentenced to immediate or suspended custodial terms has risen this year.Immediate custodial sentences now represent 6% of all prosecutions, compared with 4% in previous years,and the number of suspended sentences has doubled from 6% to 12%. Over half of the sentences imposed for breach of the Gas Safety (Installation and Use) Regulations 1998 resulted in immediate or suspended custodial sentences.

The Health and Safety Executive (HSE) completed its public consultation into the Fee for Intervention scheme on 2 June 2017, in accordance with a settlement agreement made with the OSC Group in March2017. As of 1 September 2017, disputed invoices will now be considered by an independent panel to ensure that the fees imposed by the HSE are fair and transparent.

What to look out for in 2018

The number of successful prosecutions in 2017 under the Corporate Manslaughter & Corporate Homicide Act 2007 increased very slightly from the previous year. The highest fine under the Act to date, £1.2m, was imposed on Martinisation London Limited in July.

The Sentencing Council concluded its consultation on 10 October into sentencing guidelines for manslaughter offences. Approval and implementation are expected during 2018, leading to even harsher sentences – particularly for gross negligence manslaughter (GNM). The guidelines will cover four offences:manslaughter by reason of loss of control, manslaughter by reason of diminished responsibility, unlawful act manslaughter, and GNM.

Prior to these guidelines, the average sentence for GNM was three years and eight months. The starting points in the draft guidelines are eight years’ imprisonment for high culpability and four years’ imprisonment for medium culpability defendants. Far longer prison sentences should therefore be anticipated for those convicted of GNM once the sentencing guidelines are effective.

The Grenfell Tower fire in June 2017 has led to a public inquiry to investigate the cause of the fire and lessons that can be learned. Sir Martin Moore-Bick, a retired Court of Appeal judge, is chairing the inquiry. Evidential hearings are due to begin in 2018 and an interim report is expected later in the year.

The fire has also prompted an independent Review of Building Regulations and Fire Safety, led by the formerHSE Chair, Dame Judith Hackitt. A final report for the Review is due to be published in spring 2018. It is anticipated that the report will recommend fundamental changes to legislation on fire safety. The Review states a key priority is “to develop a more robust regulatory system for the future.”

Download our full Annual Insurance Review 2018 for more insights.