The average fine for a health and safety breach in 2019 was £150,000 (according to CHAS), the highest they have ever been. This is a massive sum of money for any business and when you add on additional costs such as civil claims, increased insurance premiums and loss of credibility, the financial costs of an accident can force organisations into administration.
But £150,000, is just a drop in the bucket compared to some of the fines handed to some companies and these days it is not uncommon for organisations to receive 7-figure fines for health and safety offences!
But what is the biggest fine ever given for a health and safety offence?
Well, that infamous award goes to Transco, who is now part of National Grid PLC.
In December 1999, Gas from a damaged gas main leaked into a void under a Lanarkshire house and was subsequently ignited. This resulted in a huge explosion which destroyed the family home and killed the family of 4 who lived there!
Issues around the use of ductile iron gas mains had been raised as early as the 1980s and were known to be susceptible to corrosion and ultimately gas leaks. As such, Transco had made efforts to replace the pipes on the majority of its network with a polyethene alternative, which was less liable to corrosion. However, the organisation’s record inaccurately indicated that the gas mains in the area had been replaced and as such the organisation had failed to replace or adequately maintain the pipes in that area.
Since Transco failed to ensure the gas main was maintained in a safe condition, the organisation was found to be in breach of Section 3 of the health and safety at work act, which outlines the duties to protect members of the public from risks to health and safety risks arising from an organisation’s operations. Transco was handed a whopping £15 million, which adjusted for inflation, is equivalent to £24.5 million in 2023.
Although that is a massive sum of money, it is nothing compared to the £390 million operating profit Transco announced in 2005, the same year as the prosecution. These disproportionately low fines were very common prior to 2016, as an organisation’s financial performance did not influence the level of fines to the same extent as they do today.
The prosecution guidelines were changed in 2016 and now the starting points for fines are calculated based on 3 key criteria: Culpability, Risk of Harm, and the turnover of the organisation. Fines can either be increased or reduced from this starting point based on a range of aggravating or mitigating factors, respectively.
Since Transco’s turnover in the year of prosecution was circa £3bn in 2005, culpability and risk of harm were both at the higher end of the scale and there were a number of aggravating factors in the case, it is likely that had the organisation been prosecuted for the same offence today, the fine would have been significantly higher and there could even be custodial sentences for directors.
Can iSAFE help prevent fines?
iSAFE has a range of services which can help any organisation, meet its legal duties in relation to health and safety and thus prevent a breach and subsequent prosecutions and fines. So if you want to make sure you are on the right side of the law get in touch with iSAFE today!
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