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September 28, 2011

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Legislation and proportionality – Reckoning with risk

The question of how safe is ‘safe enough’ lies at the heart of the UK’s health and safety legal system. Dr Chris Elliott and Mike Appleby explore the meaning of reasonably practicable.

The impact of the Health and Safety at Work, etc. Act 1974 (HSWA) has been startling. When it became law, the number of people killed at work in the UK was more than 650 a year; today, that figure has fallen to below 200. Even if other social and economic trends contributed to that improvement, credit must be given to this remarkable piece of legislation.

The duties set out in the HSWA – critically, under sections 2, 3 and 6 – are underpinned by criminal sanctions, not civil ones. Originally under the HSWA, the maximum punishment was an unlimited fine. However, with the passing of the Health and Safety (Offences) Act in 2009, courts can now impose a custodial sentence of up to two years on convicted individuals. (Note: The sanction of imprisonment has always been available but only for breach of notices and licences. The 2009 Act introduced that sanction for breach of the fundamental sections 2, 3 and 37.)

Central to the 1974 Act is the ‘reasonably practicable’ concept. In a health and safety prosecution, once it has been established there has been an exposure to risk it is for the employer to prove that they did all that was ‘reasonably practicable’ to manage that risk.

In recent years, concerns have been raised about the concept’s definition and application. The Work and Pensions Committee, which, in 2008, considered the role of the HSE in the UK’s health and safety regime, stated: “We are concerned that the test of ‘reasonable practicability’ introduces a lack of clarity that can increase the burden on employers in meeting their health and safety obligations.”1 

The Committee recommended that the Law Commission review the term but this was rejected by the then government.

Earlier, in 2006, the House of Lords Select Committee on Economic Affairs raised similar concerns in its report, Government policy on the management of risk,2 saying: “We are concerned that regulatory requirements concerning risk appear to rely heavily on a range of concepts. . . which may not be sufficiently well-defined to enable the framing of useful operational guidelines. The danger inherent in the use of such ambiguous concepts is that they may encourage excessively risk-averse responses from policy-makers.”

So where does the law stand? In R v Chargot [2009] 1 WLR 1, Lord Hope set out the aims of the HSWA: “It is not its purpose to impose burdens on employers that are wholly unreasonable. Its aim is to spell out the basic duty of the employer to create a safe working environment. . .

“. . . It is directed at situations where there is a material risk to health and safety, which any reasonable person would appreciate and take steps to guard against.”
Unfortunately, the Law Lords did not set out any guidance in respect of what is ‘reasonably practicable’.

The test in law

The term is not defined in the HSWA and there is an absence of clear, unambiguous case law to clarify and define the concept. Historically, the HSE has asserted that a safety measure should be implemented unless its cost is grossly disproportionate to the benefit. The case often quoted by the HSE in support of this is the Court of Appeal judgement of Edwards v National Coal Board [1949] 1KB 704, a personal-injury claim, not a criminal case, and which predates the HSWA. 

In the judgement, Asquith LJ stated: “‘Reasonably practicable’ is a narrower term than ‘physically possible’ and seems to me to imply that a computation must be made by the owner, in which the quantum of risk is placed on one scale and the sacrifice involved in the measures necessary for averting the risk (whether in money, time, or trouble) is placed on the other; and that if it be shown that there is a gross disproportion between them – the risk being insignificant in relation to the sacrifice – the defendants discharge the onus on them.”

The case concerned a breach of section 49 of the Coal Mines Act 1911, which imposes an unconditional duty of safety without the ‘reasonable practicability’ qualification. However, section 50 of the 1911 Act allows a company to challenge the ruling of an inspector if it is not reasonable.

The Court of Appeal, in reaching its decision, found an implied duty for a company to do all that was reasonably practicable to comply with the duty, recognising that this is necessary for any industry to operate. However, in the circumstances, it was loath to go too far in questioning Parliament’s intent when construing the statute, and therefore imposed a high threshold when applying the concept.

Asquith LJ acknowledged that, in the case, insufficient evidence was adduced “as to the quantum of risk and sacrifice involved”. Therefore, the ‘gross disproportion’ test was not actually used in reaching its decision.
Six years later, in another civil case, the House of Lords in Marshall v Gotham [1954] AC360 addressed the meaning of ‘reasonably practicable’.  None of the judges used the term ‘gross disproportion’, although two referred to Asquith LJ’s judgement. Three of the judges preferred Coltness Iron Co v Sharp [1938] AC90, in which Lord Oaksey said: “[W]hat is ‘reasonably practicable’ depends upon a consideration whether the time, trouble and expense of the precautions suggested are disproportionate to the risk involved.”

For Lord Oaksey, the test was whether the burden is ‘disproportionate’, not ‘grossly disproportionate’.

In the recent joined appeals against convictions under the HSWA of R v Tangerine Confectionery and Veolia [2011] EWCA Crim 2015, the Court of Appeal did not address the test other than to say that what is reasonably practicable depends on all the circumstances of the case,

“. . . including, principally, the degree of foreseeable risk or injury, the gravity of injury if it occurs, and the implications of suggested methods of avoiding it”.

The Court’s judgement referred to the ruling of the Supreme Court (formerly the House of Lords) in Baker v Quantum Clothing [2011] UKSC 1 – a case concerning personal-injury claims for noise-induced deafness, in which there was a majority decision in favour of the employers that they were not liable to pay damages. It stated that Baker, which considered section 29 of the Factories Act 1961, was relevant to sections 2 and 3 of the HSWA (since, materially, the two Acts have the same wording), although this was mainly in respect of the Court’s finding that foreseeability of risk is relevant to whether a risk to safety exists.

In Baker, the two dissenting judges made reference to the ‘gross disproportion’ test. However, in the judgement of Lord Mance, finding for the employers, he said of this test:

“[I]t represents, in my view, an unjustified gloss on statutory wording, which requires the employer simply to show that he did all that was reasonably practicable.”

Criminal guilt

For a defendant to be guilty of a criminal offence the jury must be sure of his guilt: it must be ‘beyond reasonable doubt’. So, in statistical terms, the probability that the defendant is innocent must be very small. Civil liability, on the other hand, is determined on a ‘balance of probabilities’ – i.e. the defendant is liable even if the probability that he is innocent is 49 per cent.

When a driver involved in a road traffic accident is convicted of a driving offence, this is conclusive evidence of liability in a civil claim against him for compensation because the standard of proof of failure is greater in criminal law. Similarly, an injured employee can rely on a health and safety criminal conviction of his employer to support his civil claim for compensation.

Logic dictates that it must require a more serious lapse to commit a crime than to be liable to pay compensation.  

Expressing the difference

In Marshall, Lord Reid said: “I think it enough to say that if a precaution is practicable it must be taken, unless in all the circumstances that would be unreasonable.”

To assess practicability, it is common for risk managers to use the cost of preventing a fatality (CPF) and value of preventing a fatality (VPF). CPF is calculated by estimating the cost (in terms of money, time and inconvenience) of a safety measure and dividing it by an estimate of the number of fatalities that the safety measure would avoid. VPF is a way of monetising safety. While this may seem distasteful, it provides an objective basis for determining whether an investment is justified.

CPF can never be calculated exactly – there will be a probability distribution of costs depending on the precise circumstances. There is a small probability of very high cost and of very low cost, and a much larger probability that the cost will lie somewhere between these.

Likewise, the safety benefits cannot be calculated exactly and will have a similar probability distribution. If these are combined in a single measure the probability distribution will look something like the graph overleaf.

For civil liability, it will need to be proved, on a balance of probabilities, that the defendant failed to discharge his duty. The threshold is therefore set at the 50-per-cent probability level, which is point 1 on the graph – if the CPF at this point is less than the VPF, the defendant is liable.

For criminal guilt, the prosecution must prove breach beyond all reasonable doubt. The relevant CPF is likely to be around point 2 on the graph. If this is less than the VPF, the defendant is all but certain to be in breach and would therefore be guilty.

This means that the CPF is lower for a criminal breach than a civil breach. While making a distinction in monetary terms might seem inappropriate to some, it would be a clear way of differentiating between civil and criminal liability.

It might be appropriate to apply, for example, a factor of three. The VPF currently used by the Department for Transport is £1.5 million and is derived from actual costs and “willingness to pay” studies – i.e. what the public believes is reasonable to pay. Thus, it is suggested this is the level at which civil liability could be set. 

Based on this model the test for criminal liability would use a VPF of around £0.5m. Safety measures with a CPF greater than £0.5m may be valid on other wider grounds, such as the business interests or ethical standards of the duty-holder, but failing to employ them would not be a crime.

The public sector

In these difficult economic times, the public sector is facing significant cuts to its budgets. However, breach of the HSWA is subject to an objective test – i.e, no allowance is made for the personal circumstances of the accused. In the leading case on sentencing in health and safety cases of R v Howe and Son (Engineers) Ltd [1999] 2 Cr App R 37, the Court of Appeal said: “The size of a company and its financial strength or weakness cannot affect the degree of care that is required in matters of safety. Otherwise, the employee of a small concern would be liable to find himself at greater risk than the employee of a large one.”

While Howe concerned a private company, it follows from its reasoning that the standard of care required in both the private and public sectors must be the same. 

In the NHS, what is ‘cost effective’ is determined by the National Institute for Health and Clinical Excellence (NICE). It estimates the health benefits that a treatment will statistically provide, in units of Quality Adjusted Life Years (QALY). It also estimates the costs of treatment.

The cost-effectiveness is the number of QALYs divided by the cost. The value of the QALY is the health sector’s equivalent to the Department of Transport’s VPF, with one big difference. It is set (at least, in theory) to ensure that the total cost of the NHS does not exceed the total available budget, whereas the VPF is based on absolute considerations of value.

This points to a more fundamental principle. The NHS’ budget is set by HM Treasury and the Department of Health, answerable to Parliament. It cannot be “reasonably practicable” for health and safety law to demand expenditure by a governmental body that conflicts with the will of Parliament. For public bodies, Howe cannot apply – rather, an approach like that taken by NICE, where expenditure below which a crime is committed is set to reflect the available budget, is essential.

Closing thoughts

Companies convicted for health and safety offences are facing ever-increasing fines, particularly where it is found that the breach contributed to fatality. Furthermore, convicted individuals can now also face imprisonment. But a conviction has a far wider impact: reputational damage and the ability to be able to tender for work and, indeed, retain work.

Therefore, conviction should be reserved for those employers that truly fall criminally short of the standard required. There is no basis – in law or logic – to set the bar at ‘grossly disproportionate’ to determine whether a safety measure is reasonably practicable. Indeed, it may force UK firms into irrational and uncompetitive expenditure and deny the public the services it requires at an affordable cost.

Furthermore, there is a danger that, if the bar for determining what is ‘reasonably practicable’ is set at the same height in both the civil and criminal arenas, then the distinction between criminal and civil negligence in the workplace becomes blurred.

In May 2006, the then prime minister, Tony Blair, in a speech to the Institute of Public Policy Research, raised concerns that Britain is becoming increasingly averse to risk and that this trend is having a detrimental impact on public policy.3  He argued that “we are in danger of having a disproportionate attitude to the risks we should expect to run as a normal part of life” and that this is putting pressure on policy-makers “to act to eliminate risk in a way that is out of all proportion to the potential damage”.

The HSE has sought to give guidance through its ‘Principles of sensible risk management’.4 However, the reality is that until the appellate courts give clear guidance as to what the test for ‘reasonably practicable’ is, uncertainty will remain and the tendency towards risk-averse behaviour will continue.

References
1 House of Commons Work and Pensions Committee (2008): The role of the Health and Safety Commission and the Health and Safety Executive in regulating workplace health and safety – www.publications.parliament.uk/pa/cm200708/cmselect/cmworpen/246/246i.pdf
2 House of Lords Select Committee on Economic Affairs (2006): Government policy on the management of risk – www.publications.parliament.uk/pa/ld200506/ldselect/ldeconaf/183/183i.pdf
www.guardian.co.uk/politics/2005/may/26/speeches.media
www.hse.gov.uk/risk/principles.htm 

Mike Appleby is a solicitor at Housemans and a regular contributor to SHP’s ‘In court analysis’ column. Dr Chris Elliott is a consultant and qualified barrister.

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Bridget_Leathley
Bridget_Leathley
6 years ago

Where is the graph that goes with this article?