i-law

Construction Insurance and UK Construction Contracts

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CHAPTER 28

Health and safety on construction sites

Introduction

 28.1 Health and safety considerations continue to play an ever-increasing role in all activities in society. Accidents with serious consequences occur frequently in the construction sector and health and safety considerations are paramount. 28.2 The construction industry employs roughly two million people in Great Britain. Despite considerable improvements in culture, process and risk controls in some parts of the industry leading to reductions in the rate of fatal and other incidents, it remains one of the most dangerous industries to work in. However, the trend is downwards, and for the 12 months from 1 April 2014 to 31 March 2015 there were 35 fatal injuries to workers in construction, 22% lower than the five-year average of 45.1 The resulting deaths (60-70% of which occur on smaller projects), major accidents and cases of ill health attributable to work are largely preventable.2 28.3 The high risk of injury and death in the construction sector has led to specific legislation being effected to ensure that health and safety considerations are central in any construction project. It is believed that by making health and safety considerations integral to all stages (from commissioning by the client and design onwards) of a construction project then both the construction and the completed building will be safer. It is a noble aim, but difficult to achieve. The legislation initially intended to achieve that aim was the Construction (Design and Management) Regulations 1994 (“the 1994 Regulations”) and the Construction (Health, Safety and Welfare) Regulations 1996 (“the 1996 Regulations”). The 1994 and 1996 Regulations were not totally successful in achieving their aims. As a result both were consolidated in the Construction (Design and Management) Regulations 2007 (“the CDM 2007 Regulations”). To support the CDM 2007 Regulations and their implementation an approved code of practice (“ACoP”) was issued by the HSE titled “Managing Health and Safety in Construction”.3 The ACoP had a special legal status, whereby if the provisions of the ACoP were not followed then the burden of proof shifted onto the defendant. 28.4 The CDM 2007 Regulations imposed duties on all parties to a construction project. The overarching aim was to make health and safety integral to any construction project from the very outset of the project, even before the design

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stage. The CDM 2007 Regulations were evaluated in one of the largest post-implementation evaluations undertaken by the Health and Safety Executive (“HSE”) from 2009 and completed in 2011. It was concluded that the CDM 2007 Regulations had gone some way to meet their objectives to simplify and to make them easier to apply to the diverse range of contractual arrangements as well as increasing the focus on competence assessment; however there was still scope to improve their effectiveness. Concerns remained within the construction industry that the Regulations were not applied in a uniform manner across the industry and that bureaucracy had not been reduced. There were concerns about the need to reduce paperwork especially when assessing competence and appropriate guidance for small projects. In particular, the detailed requirements for competence assessment contained within the Regulations has led to a system of competence assurance that is costly and delivered through a multitude of commercial pre-qualification schemes. This disproportionately affects smaller contractors who see it as a barrier to business. A major shortcoming identified was that smaller construction sites and businesses, that are currently responsible for an increasingly large proportion of serious and fatal accidents, were being disproportionately affected by the Regulations and that they needed to be made substantially simpler. This has led to the implementation of the new Construction (Design and Management) Regulations 2015 “CDM 2015 Regulations”. 28.5 In addition to the new CDM 2015 Regulations, which are dealt with in detail in this chapter, there are numerous other statutes and regulations that may apply to construction projects. These are also outlined below. 28.6 A breach of the duties imposed by the CDM 2015 Regulations or the other statutes and regulations applicable to construction sites may result in the HSE and/or the police bringing a prosecution of the relevant company in breach and possibly also the director(s) of that company. A comprehensive treatment of health and safety prosecutions is outside the scope of this work but prosecutions are increasingly common and are briefly discussed in this chapter. Various insurance issues tend to be raised in the course of such prosecutions. Those issues are also discussed in this chapter. 28.7 Given the central importance of health and safety in construction matters, many insurers are adopting a more active approach to their insureds’ health and safety regimes. Besides any laudable wish to reduce accidents in themselves, insurers are adopting that approach on the pragmatic basis that prevention tends to be less costly than the cure. Reducing the numbers of claims allows the insurer to increase profitability, without increasing the premiums paid by the insured and while reducing fatalities and injuries.

Construction (Design and Management) Regulations 2015

Introduction

 28.8 The CDM 2015 Regulations came into force on 6 April 2015, replacing the CDM 2007 Regulations. From the 6 April 2015 the ACoP was withdrawn and the CDM 2015 Regulations are accompanied by the HSE publication “Managing

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Health and Safety in Construction: Guidance on Regulations” (“the guidance”).4 This publication only provides guidance and does not have the special legal status afforded to ACoP, although it is likely that it will form an important part of any prosecution or defence of a breach under the CDM 2015 Regulations. It is shorter and uses simpler terminology. It includes useful templates for use in typical high risk, small value projects. It is specifically aimed at SME5 business. The HSE will seek views later in 2015 on whether to replace this guidance with an ACoP, which many in the industry have already indicated they would prefer. 28.9 The CDM 2015 Regulations recognises that construction projects will have started before the Regulations came into force on 6 April and will continue beyond that date. For these projects certain transitional arrangements and revocations apply.6 28.10 The policy objectives behind the CDM 2015 are to:
  • (1) maintain or improve worker protection;
  • (3) simplify the regulatory package;
  • (3) improve health and safety standards on small construction sites;
  • (4) implement the Temporary or Mobile Construction Sites Directive (TMCSD) in a proportionate way;
  • (5) discourage bureaucracy; and
  • (6) meet better regulation principles.7
28.11 The overarching principle of the CDM 2015 Regulations is the integration of health and safety into the fabric of the project. Safety starts by, for example, ensuring that the client allows enough time for the project to be undertaken safely: a rushed project is likely to be ill-planned and less safe. By considering safety in all aspects of the design the building can be designed to make its construction safer and the final building safer for the users. Finally, the construction should be planned and phased appropriately to maximise safety. 28.12 The CDM 2015 Regulations aim to improve standards in the SME sector and reduce bureaucracy across the industry. The government’s industrial strategy for construction (published July 2013) titled “Construction 2025”8 has been taken into consideration and it is claimed the CDM 2015 Regulations will support the strategic objectives of improved co-ordination, better value for money, improved

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efficiency and procurement as well as use of technological changes, for example building information and modelling (BIM).9 It remains to be seen whether the new Regulations are able to achieve such aspirations. 28.13 The CDM 2015 Regulations are divided into five parts:
  • Part 1 deals with the application of CDM 2015 and definitions.
  • Part 2 covers the duties of clients for all construction projects. These duties apply in full for commercial clients. However, the duties for domestic clients normally pass to other dutyholders
  • Part 3 covers the health and safety duties and roles of other dutyholders, including:
  • designers
  • principal designers
  • principal contractors
  • contractors
  • Part 4 contains general requirements for all construction sites
  • Part 5 contains transitional arrangements and revocations.
28.14 The main changes from the CDM 2007 Regulations are:
  • 1 CDM 2015 apply to all clients of construction projects, whether or not a person is acting in the course or furtherance of a business (regulation 2(1)).
  • 2 Pre-construction archaeological investigations are not included within the scope of the definition of construction work (regulation 2(1)).
  • 3 The role of CDM co-ordinator has been removed and various duties have been recast including client duties (regulation 4) and general duties (regulation 8).
  • 4 A client is required to appoint a principal designer as well as a principal contractor in any project where there is, or it is reasonably foreseeable that there will be, more than one contractor working on the project (regulation 5). Under the 2007 Regulations appointments for similar roles were required for notifiable projects.
  • 5 The duty to notify now lies with a client and the threshold for notification is raised (regulation 6).
  • 6 If a client is a domestic client, most of their duties will be carried out by the contractor, principal contractor, or principal designer (regulation 7).
  • 7 The duties of the principal designer are set out in regulations 11 and 12.
  • 8 Modified duties of the principal contractor are set out in regulation 12 to 14.
  • 9 Modified duties of contractors are set out in regulation 15.
  • 10 Transitional provisions are set out in Schedule 4.
  • 11 The Secretary of State will carry out a review of the Regulations under the provisions of regulation 39.

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Transitional arrangements

28.15 The CDM 2015 Regulations recognises that there will be construction projects that start before the Regulations came into force and continue beyond that date. For these projects the following transitional arrangements apply. Where there is, or is expected to be, more than one contractor on a project: Where the construction phase has not yet started and the client has not yet appointed a CDM co-ordinator, the client must appoint a principal designer as soon as practicable. If the CDM co-ordinator has already been appointed the client must appoint a principal designer to replace the CDM co-ordinator by 6 October 2015, unless the project comes to an end before then. In the period it takes to appoint the principal designer, the appointed CDM co-ordinator should comply with the duties contained in Schedule 4 of the CDM 2015. These reflect the duties placed on CDM co-ordinators under the CDM 2007 Regulations rather than requiring CDM co-ordinators to act as principal designers, a role for which they may not be equipped. Other transitional arrangements are as follows. Pre-construction information, construction phase plans or health and safety files provided under the CDM 2007 Regulations are recognised as meeting the equivalent requirements in the CDM 2015 Regulations. Any project notified under the CDM 2007 Regulations is recognised as a notification under the CDM 2015 Regulations. A principal contractor appointed under the CDM 2007 Regulations will be considered to be a principal contractor under the CDM 2015 Regulations. In all other circumstances, the requirements of the CDM 2015 Regulations apply in full from 6 April 2015.10

Application of the CDM 2015 Regulations

Construction work

 28.16 The CDM 2015 Regulations apply only to construction work. Construction work is widely defined as “the carrying out of any building, civil engineering or engineering construction work”11 and includes:
  • 1 the construction, alteration, conversion, fitting out, commissioning, renovation, repair, upkeep, redecoration or other maintenance, decommissioning, demolition or dismantling of a structure;
  • 2 the preparation of an intended structure, including site clearance, exploration, investigation, excavation and the clearance or preparation of the site or structure for the use or occupation at its conclusion;
  • 3 the assembly of prefabricated elements to form a structure, or the dismantling of such a structure;
  • 4

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    the removal of a structure or part of a structure or of any product or waste resulting from the demolition or dismantling of a structure or from disassembly of prefabricated elements that had formed a structure;
  • 5 the installation, commissioning, maintenance, repair or removal of mechanical, electrical, gas, compressed air, hydraulic, telecommunications, computer or similar devices that are normally fixed within or to a structure.
28.17 The definition of “structure”12 is also very wide, and includes any buildings, structures comprised of metal and/or concrete, timber or metal, tunnels, shafts, gas holders, roads, sewers, masts, towers and pylons, as well as formwork, falsework, scaffolding and certain types of fixed plant. The wide definition of “construction work” means that care should be taken before deciding whether a particular item of work falls outside the ambit of the CDM Regulations.13 28.18 Construction work as defined does not include the exploration for or extraction of mineral resources or activities preparatory thereto carried out at a place where such exploration or extraction is carried out. Nor does construction work include the construction of offshore installations, work to or on ships or, in certain circumstances, the general maintenance of fixed plant.

Application in and outside Britain

 28.19 The CDM 2015 Regulations apply to all construction projects in Great Britain. Through the Health and Safety at Work etc. Act 1974 (Application outside Great Britain) Order 2013,14 it also applies to construction work carried out in:
  • 1 the territorial sea;15 and
  • 2 connection with, or preparatory to, construction of any renewable energy structure in the renewable energy zone.16
28.20 Other than Part 4, the CDM 2015 Regulations apply to construction projects as a whole - that is the whole construction process from concept to completion. Part 4 sets out a number of provisions that only relate to work carried out on constructions sites.

Notifiable projects

 28.21 Notifiable projects are no longer governed by their own section of the regulations. There is now a stand-alone duty to notify.17 Regulation 6 stipulates that

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a project is notifiable if the construction work on a construction site is scheduled to last more than 30 working days and have more than 20 workers working simultaneously at any point in the project;18 or exceeds 500 person days.19 This no longer acts as a threshold triggering additional duties as was the case in CDM 2007 Regulations, avoiding the complexity of the previous structure. Where a construction project must be notified, the client must submit a notice in writing to the relevant enforcing authority.20 The client must submit the notice as soon as practicable before the construction phase begins. The client or the principal contractor must ensure that an up-to-date copy of the notice is displayed in the construction site office.

Clients

 28.22 A client means any person for whom a project is carried out.21 A client may be an organisation or an individual and can include local authorities, school governors, charities and project originators on private finance initiative (PFI) projects. This definition includes both commercial clients and domestic clients. Domestic clients are those for whom a construction project is carried out, which is not done in connection with a business. A typical example would be homeowners having work done on their own house. Local authorities, housing associations, landlords, charities and other businesses may own domestic properties, but they are not a domestic client for the purposes of the CDM 2015 Regulations.

Domestic clients

 28.23 Domestic clients were largely exempt from the responsibilities under the CDM Regulations 2007. It has been considered that this exemption does not comply with the underlying EU Directive22 and so the exemption has been removed; however the effect of regulation 7 is to move the burden of the client duties onto other dutyholders. Regulation 7 stipulates that where the client is a domestic client the duties in regulation 4(1)-(7) and regulation 6 must be carried out by the contractor for the project or the principal designer, and in the case of the latter where there is a written agreement that the principal designer will fulfil those duties.23 28.24 If a domestic client fails to make the appointments required by regulation 5 it is assumed that the designer in control of the pre-construction phase of the project is the principal designer and that the contractor in control of the construction phase is the principal contractor.24 Previously, where work was carried out pursuant to an insurance policy, a difficulty may have arisen as to who the client was for the purposes of the CDM 2007 Regulations.

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 28.25 Whilst under the CDM 2007 Regulations, a situation could arise where in consequence of an insurance company arranging (whether by itself or through an agent) for the construction work to be carried out, or specifying designers or contractors for certain aspects of the work, that it may have been deemed the client, under the CDM 2015 Regulations the position is somewhat clarified as the principal contractor or the principal designer will be deemed as the identifiable dutyholder.

Client duties

 28.26 The duties imposed on clients by the CDM 2015 Regulations are more extensive than those under previous iterations of the CDM Regulations. The client’s duties are set out in regulations 4-7. Regulations 4 and 5 set out the client’s duty to make suitable arrangements for managing a project and maintaining and reviewing these arrangements throughout. “Suitable” is defined as meaning “the construction work can be carried out, so far as is reasonably practicable, without risks to the health and safety of any person affected by the project”.25 28.27 In some circumstances it may not be clear who the client or the clients are. Any uncertainty should be resolved as early as possible by determining who ultimately decides what is to be constructed and who commissions the design and construction work (the employer in contract terminology).26 If there is still doubt about who the client or clients are, all possible clients should agree that one or more of them is treated as the client for the purposes of the Regulations. According to the guidance, those clients who have not been identified as clients for the purposes of the Regulations will still have a duty to provide information relevant to the project and cooperate with anyone involved in the project.27 For projects involving more than one contractor, the Regulations now require the client to appoint a principal designer and a principal contractor and to make sure they carry out their duties.28

Designer

 28.28 A designer means any person (including a client, contractor or other person referred to in these Regulations) who in the course or furtherance of a business: (a) prepares or modifies a design, or (b) arranges for or instructs any person under his control to do so, relating to a structure or part of a structure, and a person is deemed to prepare a design where a design is prepared by a person under their control.29 The terms “design” includes (inter alia) drawings, design detail, specifications and calculations prepared for the purpose of a design. 28.29 Regulation 8 states that a designer or principal designer must have the skills, knowledge and experience, and if they are an organisation, the organisational capability to fulfil the role they are employed to undertake.30 Anyone appointing a designer (or a contractor) must take reasonable steps to satisfy themselves that those

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who will carry out the work have the relevant skills. Reasonable steps will depend on the complexity of the project.31 28.30 Regulations 9 and 10 set out the duties placed on designers. These include the duty to eliminate, reduce or control foreseeable health and safety risks through the design process, such as those that may arise during construction work or in maintaining and using the building once it is built. Regulation 9 stipulates that a designer must not undertake a project unless he is satisfied that the client is aware of the duties owed by the client. When preparing or modifying designs, a designer must take account of the general principles of prevention, and the pre-construction information provided to them, with the aim, as far as reasonably practicable, of eliminating foreseeable risks. Where this is not possible the guidance states that they must take reasonably practicable steps to reduce the risks or control them through the design process and provide information about the remaining risks to other dutyholders.32

Principal designer

 28.31 One of the biggest changes implemented by the CDM 2015 Regulations is to abolish the role of the CDM co-ordinator and replace it with the principal designer. A principal designer is that designer with control over the pre-construction phase of the project.33 The underlying purpose of appointing a principal designer (whether it is the lead designer of a pre-existing part of the project team; or the project management company acting on behalf of the client; or the client themselves), is that the principal designer will have control over and influence the design, facilitating an integrated approach to risk management. One of the main pitfalls of the CDM co-ordinator was that it was claimed they added significant cost and no value and were often seen as an “add-on” only appointed to satisfy the legal requirements. Frequently they were appointed so late in a project that their role was obsolete. It is intended that co-ordination will become accepted as a core business function of the pre-existing project team rather than an externalised role and having one party delivering both functions is expected to generate significant savings. Time will tell whether this delivers the considerable economies of scale promised. 28.32 Regulation 11 sets out the principal designer’s duties during the pre-construction phase. They include requirements to plan, manage and monitor and coordinate health and safety during this phase and to liaise with the principal contractor in providing information relevant for the planning, management and monitoring of the construction phase. During the pre-construction phase, and before setting up a construction site, the principal contractor must draw up a construction

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phase plan, or make arrangements for a construction phase plan to be drawn up.34 The required content of the construction plan is set out in regulation 12(2) and Schedule 3. 28.33 In projects involving more than one contractor the principal designer must prepare a health and safety file during the pre-construction phase.35 It must be appropriate to the characteristics of the project, which must contain information relating to the project that is likely to be needed during any subsequent project to ensure the health and safety of any person.36 The principal designer must ensure that the health and safety file is appropriately updated, reviewed and revised from time to time to take account of the work and any changes that have occurred.37 He is responsible for the file for the life of the project or until his appointment ends in which case the file passes to the principal contractor and at the end of the project the client.38

Principal contractor

 28.34 The principal contractor is the organisation or person that coordinates the work of the construction phase of a project involving more than one contractor. There is the duty to plan, manage and monitor the construction phase and to coordinate matters relating to health and safety to ensure, so far as is reasonably practicable, construction work is carried out without risks to health or safety.39 Paragraphs 119 to 142 of the Guidance provide detailed information as to how to perform these duties. The principal contractor is appointed by the client and they must possess the skills, knowledge, and experience and (if an organisation) the organisational capability to carry out their role effectively given the scale and complexity of the project and the nature of the health and safety risks involved. In fulfilling their duties they must organise cooperation between contractors and coordinate implementation by the contractors of applicable legal requirements for health and safety. He must ensure a suitable site induction is provided and prevent access by unauthorised persons to the construction site. He must ensure facilities that comply with the requirements of Schedule 2 are provided throughout the construction phase.40 28.35 The principal contractor must liaise with the principal designer for the duration of the principal designer’s appointment and share with the principal designer information relevant to the planning, management and monitoring of the pre-construction phase and the coordination of health and safety matters during the pre-construction phase.41

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 28.36 Regulation 14 imposes a specific duty upon the principal contractor to consult and engage with workers or their representatives. These duties are in addition to those requirements in the Safety Representatives and Safety Committees Regulations 1977 and the Health and Safety (Consultation with Employees) Regulations 1996 that require employers to consult their workforce about health and safety. In work places where a trade union is recognised, consultation should be through union health and safety representatives. In non-unionised workplaces, consultation should be either direct with workers or through elected representatives.42

Duties of contractor

 28.37 A contractor means any person (including a non-domestic client) who, in the course or furtherance of a business, carries out or manages construction work.43 This includes subcontractors, any individual, self-employed worker or business that carries out, manages or controls construction work as part of their business.44 As those actually doing the work and thereby most at risk of injury, contractors have a key role to play in planning and managing the work so as to ensure that risks to health and safety are properly controlled. Contractors and the workers under their control are those most at risk of injury and ill health. They can influence the way work is carried out to secure their own health and safety and that of others affected. 28.38 Regulation 15 imposes duties on contractors in relation to all construction projects. The main duty is to plan, manage and monitor the work under their control to ensure that it is carried out without risk to health and safety, so far as is reasonably practicable. Other duties include: complying with directions given to them by either the principal designer or the principal contractor on sites where there is more than one contractor; and preparing a construction phase plan on sites where they are the only contractor. A contractor must not carry out construction work in relation to a project unless he is satisfied the client is aware of the duties he owes under the Regulations. A contractor must ensure all those he employs or appoints have the necessary skills, knowledge, training and experience to carry out the tasks allocated to that person. He must also provide each worker under their control with appropriate supervision, instructions and information so that construction work can be carried out, so far is reasonably practicable, without risk to health and safety.45

Duties relating to health and safety on construction sites

 28.39 Part 4 of the CDM 2015 Regulations (regulations 28-35) applies only to construction sites and provides the general requirements for all construction sites. It remains largely unchanged from the CDM 2007 Regulations. It sets out 20 discrete

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duties applicable to all contractors or to others under the control of the contractor or relating to matters within the contractor’s control46 in respect of measures to be taken to ensure specified aspects of health and safety and to prevent danger from a number of specified hazards. 28.40 Regulation 28 stipulates that a contractor carrying out construction work must comply with the requirements of Part 4 so far as they affect the contractor or any worker under his control; or which relate to matters within his control. A domestic client who controls the way in which construction work is carried out by a person at work must comply with the requirements of this Part so far as they relate to matters within the client’s control.47

Civil liability for breach of the CDM

 28.41 There is no civil liability for breaches of the CDM 2015 Regulations. Civil liability for breaches of the CDM Regulations 2007 has been abolished. Although there was not previously a general right of civil action in respect of breaches of the CDM Regulations there were a limited number of circumstances giving rise to civil liability.48 Breaches of certain CDM 2007 Regulations, such as the client’s and contractor’s duty to meet site welfare requirements, also permitted a right of civil action. These exceptions to the general rule of no civil liability were previously permitted by regulation 45 of the CDM Regulations 2007. Regulation 45 was repealed with effect from 1 October 2013, bringing an end to the limited right to civil action for breaches of the CDM Regulations.

Other statutes and regulations

Regulations of general application

 28.42 In addition to the construction-specific duties imposed by the CDM 2015 Regulations, contractors and others who control the way in which construction work is carried out will be subject to a number of other regulations of more general application, notably:
  • 1 Provision and Use of Work Equipment Regulations 1998;
  • 2 Personal Protective Equipment at Work Regulations 1992;
  • 3 Work at Height Regulations 2005;
  • 4 Manual Handling Operations Regulations 1992;
  • 5 Workplace (Health, Safety and Welfare) Regulations 1992;
  • 6 Management of Health and Safety at Work Regulations 1999;
  • 7 Regulatory Reform (Fire Safety) Order 2005;
  • 8 REACH Enforcement Regulations 2008; and
  • 9 Reporting of Injuries, Diseases and Dangerous Occurrences Regulations

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Occupiers’ Liability Act 1957

28.43 All those involved in the project (including the client, contractors, utilities companies, and designers) may owe to lawful visitors to the construction site a common duty of care under section 2 of the Occupiers’ Liability Act 1957 if they retain a sufficient degree of possession or control over all or part of the site.49 Occupiers of the site will also, in certain circumstances, owe a duty of care to trespassers by virtue of the Occupiers Liability Act 1984. However, it is submitted that compliance by the contractor and (where applicable) the principal contractor with the duties imposed by the CDM 2015 Regulations in respect of securing the site,50 will be sufficient to discharge the duty of care owed to trespassers for the purposes of section 1(4) of the Occupiers Liability Act 1984.

Building Act 1984 and the Building Regulations 2010

 28.44 Regard must also be had to the provisions of the Building Act 1984 and the Building Regulations 2010. The Building Regulations themselves impose a wide range of requirements, ranging from regulations pertaining to the building structure and fire safety, to ventilation and conservation of fuel and power. 28.45 A person contravening the building regulations, not subject to the exceptions listed in regulation 47 of the Building Regulations 2010 is liable on summary conviction to a fine.51 Contravention occurs when the builder purports to complete the work in question and is proved to have no intention to complete the works in accordance with the regulations. The local authority may, by notice, require the removal or alteration of offending work.52

Defective Premises Act 1972

 28.46 The Defective Premises Act 1972 imposes duties on persons taking on work for or in connection with the provision of a dwelling.53 The term “dwelling” is not defined by statute, although recently defined in case law as a place where a household lived to the exclusion of members of another household.54 The essence of the duty is to ensure that the dwelling is fit for habitation when it is completed.55 Fitness for habitation has historically been a relatively high threshold for claimants to overcome56 although it has been recently concluded that defects giving rise to, for example, structural instability, dampness that is prejudicial to health, and

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inadequate lighting, power supply, drainage, sanitation and water supply57 are likely to be sufficient to render the dwelling unfit for habitation for the purposes of the Act. 28.47 The duties under the Defective Premises Act 1972 are additional to the duties otherwise owed58 and cannot be excluded or restricted.59 The measure of damages for breach of duty under the Act will arguably include all reasonably foreseeable losses that are the natural consequence of the breach.60

Health and safety prosecutions

Outline

 28.48 The following section provides an outline of the stages of a health and safety prosecution.

Pre-trial: The investigations

 28.49 The enforcement authority’s investigation provides much of the evidence for any subsequent prosecution and the basis for determining whether there should be any such prosecution. The various enforcement authorities have different statutory powers of investigation. In simple terms, responsibility for enforcement of regulations in respect of construction sites lies with the HSE, whereas local authorities are responsible for enforcing health and safety legislation in non-industrial (e.g. retail) premises. The following are the most commonly relevant investigatory powers.
  • (1) Most enforcement authorities have powers61 to interview employees. However, such interviews should be conducted under caution as the right to a fair trial includes the right not to be compelled to incriminate oneself.62 The right not to incriminate oneself does not prevent an enforcement agency obtaining one employee’s evidence to use against the company, its directors or another employee. There are few grounds to intervene in such

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    questioning. Worse, if such intervention prevents investigation such that the intervention amounts to an obstruction, that in itself is an offence.63
  • (2) The inspector appointed by the enforcement authority may have the right to enter and inspect premises and documentation (as well as take copies of any documentation) at any reasonable time for the purposes of carrying into effect any of the statutory provisions within the responsibility of the enforcement authority that appointed him.64
  • (3) The enforcement authority may have the right to conduct testing, sampling or other examination of equipment or substances, but this should be carried out within the presence of the person responsible for that equipment or substance.65
28.50 Each enforcement authority has a policy that provides guidance for the exercise of their discretion in bringing a prosecution. Local authorities do not usually have a code but tend to adopt the Code for Crown Prosecutors66 (“the Code”). The police are responsible for deciding whether to pursue a manslaughter or corporate manslaughter investigation and whether to refer a case to the CPS to consider possible manslaughter charges. The enforcing authorities are responsible for investigating possible health and safety offences. Most enforcement authority policies are similar to the Code. For a prosecution brought by the HSE the responsibility of laying an information rests with the individual inspector. The function of deciding whether to commence a prosecution on behalf of the HSE is undertaken by the approval officer. Approval officers are responsible for ensuring that the prosecution papers meet the standards expected of HM inspectors. However before they can approve a prosecution they must apply the Code and the HSE Enforcement Policy Statement.67 The ultimate purpose of the enforcing authorities is to ensure that dutyholders manage and control risks effectively, thus preventing harm. The term “enforcement” has a wide meaning and applies to all dealings between enforcing authorities and those on whom the law places duties (employers, the self-employed, employees and others). 28.51 Prosecutors must only start or continue a prosecution when the case has passed both stages of the full code test, which comprises the evidential test and the public interest test. The exception is when the threshold test may be applied where it is proposed to apply to the court to keep the suspect in custody after charge, and the evidence required to apply the full code test is not yet available. 28.52 The evidential test requires the prosecutor to determine whether there is sufficient evidence to provide a realistic prospect of conviction against each suspect on each charge. Prosecutors must consider what the defence case may be, and how it is likely to affect the prospects of conviction. The code expressly provides that a

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case that does not pass the evidential stage must not proceed, no matter how serious or sensitive it may be.68 28.53 The public interest test requires the prosecutor to consider whether it is in the public interest for the prosecuting authority to bring the case to court. The Code identifies nine specific questions that prosecutors must consider before determining whether a prosecution is in the public interest: see paragraph of the Code. 28.54 The enforcing authorities have a range of tools at their disposal in seeking to secure compliance with the law and to ensure a proportionate response to criminal offences, which may mean that the prosecution is not in the public interest. For example, inspectors may offer dutyholders information, and advice, both face to face and in writing. This may include warning a dutyholder that, in the opinion of the inspector, they are failing to comply with the law. Where appropriate, as an alternative to prosecution inspectors may also serve improvement and prohibition notices, withdraw approvals, vary licence conditions or exemptions, or issue simple cautions. It should be noted that “simple cautions” are entirely distinct from a caution given under the Police and Criminal Evidence Act 1984 by an inspector before questioning a suspect about an alleged offence.69 A simple caution is a statement by an inspector, that is accepted in writing by the dutyholder, that the dutyholder has committed an offence for which there is a realistic prospect of conviction and may only be used where a prosecution could be properly brought. 28.55 Giving information and advice, issuing improvement or prohibition notices, and withdrawal or variation of licences or other authorisations are the main means which inspectors use to achieve the broad aim of dealing with serious risks, securing compliance with health and safety law and preventing harm. A prohibition notice stops work in order to prevent serious personal injury. Information on improvement and prohibition notices should be made publicly available. Every improvement notice contains a statement that in the opinion of an inspector an offence has been committed. Improvement and prohibition notices, and written advice, may be used in court proceedings. 28.56 As with any matter, it is sensible for the defendant to conduct an adequate investigation early in order to have the best prospect of defending matters. However, there is a particular incentive to identify any failing early and take appropriate remedial action. This may actually help to avoid any prosecution or, if a prosecution is brought, it allows an early informed decision in respect of any guilty plea. That allows for maximum mitigating effect both for the early plea (if made) and having taken appropriate action swiftly.

Pre-trial: Abuse of process

 28.57 An application may be made before the trial itself for the prosecution to be stayed as an abuse of process. This is an exceptional course for the court to

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take.70 The basic principle is that it is for the prosecution, not the court, to decide whether a prosecution should be commenced and, if commenced, whether it should continue.71 To constitute an abuse of process something must be “so unfair and wrong that the court should not allow a prosecutor to proceed with what is, in all other respects a regular proceeding”.72 That requires either that the defendant cannot receive a fair trial or that there is some unfairness inherent in putting that defendant on trial for that offence. Such unfairness may result if the offence was committed partly as the result of poor inspection or advice from that regulatory body itself or where multiple agencies seek to prosecute for the same offence.73 It is also open to the defendant to consider an application to dismiss the case, made at a preliminary hearing in the Crown court when a matter is tried on indictment in the Crown court. The final opportunity to have the case dismissed before the verdict is left to the jury is for the defence to make an application of no case to answer. This is usually made at the close of the prosecution case where the Crown’s case, taken at its highest, is so weak that no jury could properly convict.74

Trial

 28.58 Most health and safety offences are triable either way, which means that they can be dealt with either in the Crown court or the magistrates’ court. The upper limit of a £20,000 fine previously available, and on occasion their local knowledge, has seen the magistrates court historically being a popular choice for defendants to argue that their case is suitable for summary disposal. There have always been unlimited fines available in the Crown court. In favour of being tried in the Crown court is also the perceived impartiality of juries. Section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) came into force on 12 March 2015 and gives the magistrates’ courts the power of unlimited fines for offences committed on or after this date. The purpose of section 85 of LASPO is to further empower magistrates so that they can dispose of more cases and help clear some of the Crown courts’ case loads. It is likely that the uncertainty around the level of fine that might be imposed will be of serious concern to many corporate defendants. Tactically it may result in some defendants giving no indication as to their plea at the first hearing, electing to be dealt with in the Crown court in any event and so they can be sentenced by a Crown court judge rather than a bench of lay magistrates. However there are new sentencing guidelines coming into force later this year in the Crown court that are going to significantly raise the level of fines for all health and safety offences.75 28.59 It is likely in many construction-related health and safety prosecutions that expert evidence will be required. The nature and extent of the expert evidence will depend on the duties that are alleged to have been breached. Defendants are likely

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to have to adduce expert evidence commenting on the suitability and sufficiency of the risk assessments in order to convey to a lay bench or a judge the realities of construction industry practice, the often reasonably limited nature of risk assessments and method statements and the actual risk and foreseeability of risk that could be attributed to the circumstances of the incident being prosecuted.

Sentencing

 28.60 The available sentence for a company is a fine. Company directors can be prosecuted as individuals alongside a company where a company is alleged to have committed an offence under the HSWA 1974. In order to be found guilty the offence must have been committed with either a director or member of a body corporate whose affairs are managed by its members with consent, connivance, or have been attributable to neglect on his part.76 The maximum sentence for an individual is two years’ imprisonment in the Crown court and/or an unlimited fine. Section 2(1) of the Company Directors Disqualification Act 1986 empowers a court to make a disqualification order against a person convicted of an indictable offence in connection with the promotion, formation or management of a company. The maximum period of disqualification is five years in the magistrates’ court and 15 years in the Crown court. 28.61 As with any sentence of an individual, the court will first consider what nature of sentence best accords with the gravity of the offence and then go on to address the personal mitigation of the defendant. Pursuant to the recommendations of the Court of Appeal in the case of R v Friskies Petcare UK Ltd 77 the prosecuting authority provide a “Friskies schedule” setting out the outline of the facts of the case, together with the aggravating features and other relevant factors relevant to sentence. 28.62 The aggravating features that will result in a fine towards the higher end of the scale include: the danger created by the offence; whether the offence resulted in the unnecessary loss of life; foreseeability of the risk and the length of time that the risk was present; failure to heed warnings; where the defendant deliberately profited financially from a failure to take the necessary health and safety steps or specifically ran the risk in order to save money.78 28.63 In determining the level of fine the court has historically had very little guidance and fines have not always been material financially relative to the means of the company. Recently more emphasis has been placed on the relationship between the structure, turnover and profit of corporate defendants and the appropriate level of fine79 than ever before. In 2015 the Sentencing Council issued sentencing guidelines for health and safety offences and corporate manslaughter. The guidelines make clear that the courts are to be particularly encouraged to ensure that fines are sufficiently

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substantial to have a “real economic impact”, which will bring home to shareholders and management the need to achieve a safe environment. It follows that fines, especially for large companies, are bound to rise significantly and scrutiny of accounts, including where a group structure is adopted, is certain to increase. Given the importance that the draft guidelines place on the categorisation of culpability and harm and the wide range of fines possible within each bracket, it is likely that this will result in a greater number of Newton (fact-finding) hearings and detailed submissions as to which bracket a defendant fits into for sentence.

Corporate manslaughter

 28.64 The Corporate Manslaughter and Corporate Homicide Act 2007, which came into force on 6 April 2008, abolished the common law offence of manslaughter by gross negligence (as it applied to corporations) and created a statutory offence in respect of corporations who manage their activities in such a way as to cause a person’s death where such activities amount to a gross breach of the relevant duty of care owed by the corporation to the deceased.80 The relevant duty of care includes statutory and common law duties owed by a corporation in carrying out construction or maintenance operations.81 28.65 It is for the jury to determine whether or not there has been a gross breach of the relevant duty of care. In doing so, the jury must consider the seriousness of the failure and how much of a risk of death it posed, but may also consider any health and safety guidance that relates to the failure. This will include CDM 2015 and its guidance.82 It is important to remember that a corporation will be guilty of the offence only if the way in which its activities are managed by its senior management83 is a substantial element in the breach of the relevant duty of care.84 28.66 An organisation that is found guilty of corporate manslaughter or corporate homicide is liable on conviction on indictment to a fine.85 The offence of corporate homicide is indictable only in the High Court.86

Insurance implications of health and safety prosecutions

Funding defence costs

 28.67 Insurers may pay the legal costs of defending a health and safety prosecution. Insurers pay such costs for one of two reasons. First, it may be in the insurer’s interest to defend any criminal proceedings in order to defend anticipated or parallel civil proceedings. It is more difficult to resist findings of negligence where criminal

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liability for fault has previously been found. Second, the insured may be entitled to an indemnity against such costs either under a specific legal expenses insurance policy or where such an indemnity is provided as an extension to another policy. Such an extension is common in contractors’ all risks or public liability or professional indemnity policies. 28.68 Care should be taken to check whether the policy contains such an extension so as to avoid the potential problem of double insurance; for example, by reason of the existence of a separate legal expenses policy covering the same interest and against the same risk. In such circumstances the policy may prohibit claims on the indemnity or restrict the liability of the insurer to paying the assured their rateable proportion of the loss. It is therefore important to check carefully the express terms of the policy before taking out a separate legal expenses insurance policy. 28.69 Where insurance cover is provided there is usually an express term in the policy that such cover is provided only where the insured’s defence is reasonable. Alternatively, it may be that such a term is implied. It is submitted that the requirement that the defence is reasonable is more easily satisfied in criminal proceedings. Because the implications of a finding of guilt may include moral opprobrium as well as a potential financial penalty, prospects of success at a level where a settlement would be anticipated in civil litigation may entitle an insured to an indemnity to fund its defence.

Insurance Companies (Legal Expenses Insurance) Regulations 1990

 28.70 Where cover in respect of defence costs is provided either under a specific legal expenses insurance policy or under an extension to another policy, the Insurance Companies (Legal Expenses Insurance) Regulations 1990 (“the IC(LEI)R 1990”) apply.87 The important provision that often arises in the context of health and safety prosecutions is that the insured must have the right under the policy to select its own lawyers88 (even if some of the fees may then have to be borne by the insured). That right should be expressly recognised in the policy.89 28.71 The IC(LEI)R 1990 do not apply where legal representation is provided to the insured by the insurer where such representation is provided in the insurer’s own interest.90

Fines

 28.72 Insurance cannot be taken out for an indemnity against a court-ordered fine.91 A fine for a breach of health and safety legislation is a criminal sentence. It is contrary to public policy for insurance to be provided against such a fine.92 This

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rule is not rested on an implied exception in the policy of insurance. It is based on the broad rule of public policy that no person can claim indemnity or reparation for his own wilful and culpable crime.93

Prosecution costs

 28.73 An order to pay prosecution costs forms part of the sentencing exercise for a breach of health and safety legislation.94 Prosecution costs and the fine are considered collectively by the court in determining the sentence. HSE now operates a fee for intervention (FFI) cost recovery scheme, which came into effect on 1 October 2012. Under the Health and Safety (Fees) Regulations 2012, those who break health and safety laws are liable for recovery of HSE’s related costs, including inspection, investigation and taking enforcement action. Contributions made during the investigation stage by companies as part of the scheme should be included in any overall consideration of a costs order at the sentencing hearing. The same considerations as apply to any purported indemnity in respect of a fine also therefore apply to any purported indemnity against an order to pay prosecution costs. Such an indemnity would be illegal and unenforceable.

Disclosure of previous convictions

 28.74 Most insurers will require disclosure of a company’s health and safety record before providing insurance. Such disclosure usually takes the form of specific questions on the insurance proposal form. Insurers regularly ask for details of any health and safety convictions or prosecutions and/or for details of the number of accidents in a specified period which were “reportable”95 under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013.96

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