??***?? - p4 Compensation Culture “The growing compensation culture in the UK is now costing about £10bn a year – or 1% of GDP” Institute of Actuaries, Dec 2002 Growing compensation culture poses major threat to profitability and jobs. Aon, July 2004 “25% of employees find the essential Employers Liability Compulsory Insurance difficult or impossible to secure despite vigorous attempts to find cover.’ Federation of Small Business, May 2004
??***?? - p5 Compensation Culture The culture is a myth The perception causes fear of litigation and imposes burdens on organisations Redress for genuine claimant is hampered Recommendations Regulate claims Co’sMore rehabilitation Raise small claims limitInvestigate contingency fees Improve ombudsmen arrangementsPromote occupational health More mediationLower insurance premiums www.brtf.gov.uk
??***?? - p6 Compensation Culture Conditional fee rules introduced, 1995 Legal aid restricted for personal injury, 2000 Solicitors’ advertising rules relaxed, 2001 Increasingly strict interpretation of regulations and common law duties of care.
??***?? - p7 Number of Solicitors – England & Wales
??***?? - p8 Legislation as a Driver HSWA 100+ health and safety regulations Management of Health and Safety at Work Regulations 1999 Corporate Manslaughter “The Government is concerned both that there should not be scope for avoidance measures by unscrupulous companies or directors, and that enforcement action should act as a real deterrent, even in large companies and within groups of companies.”
??***?? - p9 Major Injuries - Construction Employees
??***?? - p10 Major Injuries – Construction Employees CDM
??***?? - p11 Legislation as a Driver Southall rail crash Ladbroke Grove rail crash Hatfield Transco/Larkhall } Safety Case holders
??***?? - p12 Legislation as a Driver Among the specific proposals which the Health and Safety Commission will consider are: Fines linked to the turnover or profit of a company; Prohibition of Director bonuses for a fixed period; Suspension of managers without pay; Suspended sentences pending remedial action Compulsory health and safety training Fixed penalty notices for specific offences Deferred prohibition notices on welfare issues
??***?? - p13 HSE Enforcement Role "The evidence supports the view that it is inspection, backed by enforcement, that is most effective in motivating duty holders to comply with their responsibilities under health and safety law. We therefore recommend that the HSE should not proceed with the proposal to shift resources from inspection and enforcement to fund an increase in education, information and advice". House of Commons Work and Pensions Committee, July 2004
??***?? - p14 Average Fines for Health and Safety Offences 1990/91-2002/03
??***?? - p16 Enforcing authorities should identify and prosecute or recommend prosecution of individuals if they consider that a prosecution is warranted. In particular, they should consider the management chain and the role played by individual directors and managers, and should take action against them where the inspection or investigation reveals that the offence was committed with their consent or connivance or to have been attributable to neglect on their part.
??***?? - p18 2003 survey of directors “Rewards are not at the top of directors’ agendas. The area directors are most concerned about is the risk from health and safety and product liability laws.” H&S in Corporate Governance
Action Point 5 "The board needs to ensure that it is kept informed of, and alert to, relevant health and safety risk management issues. The Health and Safety Commission recommends that boards appoint one of their number to be the 'health and safety director'". Percentage of organisations that have allocated health and safety responsibility to a board level director [Source: HSE Research Report 135]
??***?? - p20 H&S in Corporate Governance Combined Code – internal control guidance HSC/DETR’s ‘Revitalising Health and Safety’ strategy HSC’s ‘Health and Safety in Annual Reports’ guidance DTI’s draft OFR and Directors Reports Regulations
??***?? - p21 Top UK Companies’ H&S Information in Annual Reports 49% 1995 (FTSE100) 47% 2001 (FTSE350) 80% 2003 (FTSE350)
??***?? - p22 H&S in Corporate Governance Combined Code – internal control guidance HSC/DETR’s ‘Revitalising Health and Safety’ strategy HSC’s ‘Health and Safety in Annual Reports’ guidance DTI’s draft OFR and Directors Reports Regulations
??***?? - p23 1990919293949596979899200001020304 OLL Ltd Convicted Great Western Trains Acquitted Reform Proposals Proposals in October? Corporate Manslaughter Developments P&O Acquitted Law Commission Proposals Case dismissed
??***?? - p24 Experience with prosecutions in England ‘Work-Related Deaths’ Protocol 253 cases referred to CPS since 1992 69 prosecutions 18 convictions Only 6 Corporate prosecutions have succeeded
??***?? - p26 Corporate Manslaughter – doctrine of identification “…where a corporation through the controlling mind of its agents, does an act which fulfils the pre-requisites of the crime of manslaughter…it, as well as its controlling mind or minds, is properly indictable for the crime of manslaughter”
??***?? - p27 Current law of gross negligence manslaughter “...The jury must go on to consider whether that breach of duty should be characterised as gross negligence and therefore as a crime. This will depend on the seriousness of the breach of duty committed by the defendant in all the circumstances in which the defendant was placed when it occurred. The jury will have to consider whether the extent to which the defendant’s conduct departed from the proper standard of care incumbent upon him... such that it be judged criminal.”
??***?? - p28 Unsuccessful attempts to prosecute Zeebrugge Southall rail crash Ladbroke Grove rail crash Simon Jones Hatfield (Railtrack)
??***?? - p29 The need for reform Accountability The doctrine of ‘identification’ is discredited The common law of manslaughter is unsatisfactory
??***?? - p30 Home Office Proposals, May 2000 1.A ‘management failure’. 2.It is ‘the cause or a cause of death 3.The failure constitutes ‘conduct falling far below what can reasonably be expected...’ “There is a management failure if the way in which activities are managed or organised fails to ensure the health and safety of persons employed or affected by those activities” Introduction of a specific “Corporate Killing” offence for ‘undertaking’ with three key elements
??***?? - p31 Final Thoughts Revitalising targets not being met Problems with an enforcement approach Prosecutorial selection of cases No sentencing tariffs Little evidence for deterrent effect of the current models Economically inefficient No alignment with business objectives Conflicts with other policy objectives Separate the enforcement and advisory functions?
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