Local authority health & safety fines on logistics increases sixfold in a year

While high risk sectors such construction pay far more in fines and are policed by HSE, logistics companies policed by local authorities are seeing a big jump in fines.

Rhian Greaves Head of Compliance & Strategic Support in Clyde & Co's Safety, Health & Environment team explains: “The myriad of risks presented by distribution centres places them at the top of the local authorities' agendas as they seek to regulate arguably the highest risk industry within their jurisdiction.

“The logistics sector represents the most challenging risk for the local authority to manage. The public's growing preference for internet shopping has seen huge distribution centres spring up nationwide. With high level racking, mechanical handling equipment and large numbers of employees, agency and gig economy workers, the area presents something of a perfect storm.”

Clyde & Co carried out a research report on the impact of the new sentencing guidelines. Other findings include that the value of fines collected for breaches of the Health and Safety at Work Act by the Health and Safety Executive (HSE) and local authorities has doubled in a year. Data obtained directly from the Health and Safety Executive (HSE) and over 300 local authorities shows that the total value of fines collected from businesses increased to £73.2m in the first year of the new sentencing guideline (year end 31 January 2017), up from £35.4m in the previous 12 months.

{EMBED(889175)}

New sentencing guidance introduced on the 1st of February 2016 toughened penalties for health and safety and corporate manslaughter offences. Under the new approach, the scale of fines varies according to the turnover of the company but can exceed £20m for the very worst cases involving corporate manslaughter, and potentially more for the largest companies. The amount collected in fines by the HSE increased by 74% during the first year of the new sentencing guideline, to £61.6m up from £35.5m. The total sum collected by local authorities showed an even greater increase of 1,870% over the same time period. Fines collected by local authorities in the last year rose to £15.2m, up from £0.8m in the previous 12 months.

Clyde & Co explains that the HSE has enforcement oversight of 'higher risk sectors' such as construction and manufacturing. While local authorities are responsible for the enforcement of 'lower risk sectors', including warehousing. High risk sectors such as manufacturing and construction have borne the brunt of the new regime, but lower risk sectors such as logistics are also increasingly exposed to larger fines, and warehouse operators should note the rapidly rising amounts fines levied by local authorities.

Rhian Greaves says:  “The percentage increase in fines in the local authority enforced sectors is staggering. While relatively few prosecutions have been pursued in the first year of the Guideline, the cases that have passed through the Courts have reinforced the dramatic effect the new sentencing regime is having on defendant organisations.”