Legislation update Q&A: Legal privilege, Sentencing Guidelines, ISO 45001
Health and safety law and securing compliance remains to be an ever important and far reaching area, particularly now in light of unlimited and ever increasing fines. Following our recent Legislation Update webinar, Kizzy Augustin, Partner at Russell Cooke, answers some of your pressing questions.
Summary of the current position
“With the recent judgements that have been dealing with the tricky concept of privilege in the last 12 months, it seems that organisations that face investigation by an enforcing authority can no longer claim litigation privilege over documents without the fear of challenge. The historical test for legal litigation privilege is that a) there must be actual or contemplated litigation, b) communications must be made for the sole or dominant purpose of conducting that litigation and c) it must be adversarial litigation, not investigative or inquisitorial.
“The cases of SFO v ENRC (which is due to be heard for appeal in July 2018), Bilta v RBS and R (HSE) v Jukes illustrated the importance of seeking specialist legal advice at the earliest opportunity. In summary:
- ENRC: Investigations where the purpose was to equip the organisation in question with evidence that might enable them (or their legal advisers) to persuade a third party not to commence proceedings against them are not deemed to have a litigation purpose, and therefore legal privilege might not apply to documents created during that investigation. “Criminal proceedings cannot be reasonably contemplated (for the purpose of litigation privilege) “unless the prospective defendant knows enough about what the investigation is likely to unearth, or has unearthed, to appreciate that it is realistic to expect a prosecutor to be satisfied that it has enough material to stand a good chance of securing a conviction”.
- Bilta: Transcripts of interviews conducted by the organisation’s (RBS) legal team in respect of a tax fraud investigation were deemed to be legally privileged, as the dominant purpose was for their use in litigation and any other purposes that may have existed was subsidiary. A letter from HMRC informing RBS of the potential tax fraud and their intention to deny their claim for VAT input tax was a “watershed moment” and the instruction of lawyers suggested that RBS anticipated a claim from HMRC.
- R (HSE) v Jukes: admissions made by an employee to the organisation’s lawyers in a statement taken as part of an internal investigation into a health and safety incident were admissible and not protected by legal privilege. At the time the document had been created, no decision to prosecute had been taken by the Health and Safety Executive, and matters were still at the “investigatory stage“, which could not be considered adversarial litigation.”
With investigations potentially not being covered by legal privilege, do you not believe that this may have a detrimental impact on following up any incidents that happen in the workplace? Some may feel reticent to document any potential adverse findings.
Kizzy Augustin (KA): “Organisations may feel that it would be better to omit adverse findings from an investigation report, for fear of being discloseable if requested by an enforcing authority. But while that might be one way of avoiding the need to disclose potentially adverse findings to an enforcing authority, it does not help to achieve the common secondary purpose of investigating an incident to learn lessons and understand what the root and underlying causes were in respect of the incident.
“The best way to try and attract privilege over an investigation (and any document generated as a result of that investigation) into the cause(s) of a health and safety incident is to seek immediate advice from specialist criminal regulatory / health and safety lawyers, who can help to drive the investigation and set out the dominant purpose for the investigation at the earliest opportunity.
“Some have asked me whether a ‘fee for intervention’ notice based on the identification of a material breach would be enough to meet the “legal privilege test” i.e. does this constitute a likelihood of adversarial litigation. The fact that the HSE have confirmed that there is, in their opinion, a material breach of health and safety might suggest that legal proceedings may follow, particularly if the notice / invoice is paid without challenge. Payment could infer that the defendant company agrees with the HSE that a material breach has been committed and there is nothing to stop the HSE from prosecuting on the back of such an agreement. The important thing is to record the purpose of the investigation as early as possible in the letter of instruction / letter of engagement with the lawyers, which should also identify the core client team who are authorised to seek and receive advice in respect of the investigation. Even if there are additional purposes for carrying out the investigation, the dominant purpose of seeking legal advice in anticipation of actual or likely litigation must be set out clearly in the letter of engagement and any other appropriate documents, such as letters inviting employees for interview.”
What status do legally privileged incident investigations / investigation reports have in terms of whether they can be used in evidence in a court of law?
(KA): “If carried out correctly, legally privileged investigations and any report prepared as a result of the investigation will remain ‘privileged and confidential’. This means they do not have to be disclosed to any enforcing authority, claimant, court or any other third party. If a party wishes to rely on some of the findings from its investigation or a privileged report or other document is requested by the court, then it would be advisable to prepare a separate document that captures a summary of the factual findings from the investigation. This gives the third party the information they require without potentially waiving privilege over the entire investigation and the original investigation report. Again, it would be sensible to seek specialist regulatory / health and safety legal advice when preparing a separate document for third parties.”
What sentencing guidelines are there for public bodies such as local authorities and fire enforcement authorities?
(KA): “The Definitive Sentencing Guidelines for Health and Safety Offences that were in force from 2016 apply to prosecutions brought by local authorities (and many other enforcing authorities, such as the HSE) – which include prosecutions for food safety and hygiene breaches as well as general health and safety. There are no specific sentencing guidelines in place to assist the courts in terms of prosecutions for fire safety offences under the Regulatory Reform (Fire Safety) Order 2005, but courts are increasingly looking to the Guidelines for assistance. We are now seeing an increased amount of fire safety prosecutions where fire authorities either ask the court to sentence ‘in the spirit of the Guidelines’ or they simply bring the prosecution under the Health and Safety at Work etc Act, thereby triggering use of the Guidelines.”
Are any implications for small businesses rather than focusing on multi billion pound organisations?
(KA): “Although many large organisations are finding themselves facing million pound fines for health and safety breaches, the Guidelines have introduced just as much fear for small and medium sized organisations, as the impact of the fines on companies of their size is worse than the impact felt by many large and extra large organisations. Even if they plead guilty and obtain credit for their guilty plea, they may still have to pay a fine where the starting point is £250,000 and above. This is still a significant enough amount to put a small or medium sized organisation out of business. Although judges are entitled to look at the overall financial position of the organisation – including pre-tax profits, assets and directors’ remuneration – a six figure fine is some way away from the maximum £20,000 fines that were imposed in the Magistrates’ Courts before the Guidelines were in force.”
Do you see the increase in fines slowly but surely extending to the NHS and other public bodies?
(KA): “The Guidelines indicate that there should normally be a reduction in the level of fine if the defendant is a public or charitable body. The level of reduction is at the discretion of the sentencing judge, but the fine should normally be substantially reduced if the organisation is able to demonstrate the proposed fine would have a significant impact on the provision of its services. However, depending on the size of the organisation and the level of revenue (income) raised, fines could reach anything around £1million, even when there hasn’t been a fatality. Given the potential level of fines being imposed on private organisations, even a reduction of 50% could result in fines in excess of £100,000, thereby having a significant impact on that publicly funded organisation’s ability to perform its undertaking.
“The comments from the Honourable Mr Justice Haddon-Cave in the recent sentencing hearing for Shrewsbury & Telford NHS Trust in November 2017 gives us a good indication of how judges intend to sentence public and charitable bodies in the future. The NHS Trust was sentenced following a guilty plea to breaching its health and safety duty towards 5 patients who suffered fatal injuries following falls between June 2011 and November 2012. The judge felt that:
“All organisations, public or private, are accountable under the criminal law…. public bodies are to be held equally accountable under the criminal law for acts and omissions in breach of Health and Safety legislation and punished accordingly.”
It seems ludicrous to impose fines of £1million and above on a publicly funded organisation, especially when that fine would have to be paid from public funds. The judge in the Shrewsbury case reduced the fine by 50% (for being a public body and its financial circumstances), which still resulted in a fine and prosecution costs of approximately £500,000.”
What are the main advantages to get ISO45001 certification compare to “just” follow the standard?
(KA): “For organisations already working closely to OHSAS 18001 standards, the transition to ISO 45001 is anticipated to be a relatively smooth one, as the new legislation looks to build on a substantial proportion of existing standards and processes. There is a three year transition period for the implementation of this international standard and compliance with the standard is not compulsory, but it is a good way of demonstrating good health and safety management.
“ISO 45001seems to adopt the aims of the Institute of Directors / HSE guidance, in that it is risk-based and uses the Plan-Do-Check-Act model. The main aims of ISO 45001 are to:
- Provide a safe and healthy workplace / minimise the risk of harm
- Prevent work-related injury and ill-health
- Manage occupational health and safety risks
- Improve performance and support legal compliance / integrate safety and health within an organisation’s safety management systems and processes
- Provide a framework for managing occupational health and safety risks
“Compliance with the standard will seek to ensure that organisations are being proactive about health and safety management within their business and much more focused on the wider issues, such as relationships with their supply chain and local community, accountability by senior management and the Board and appropriate methods of evaluating and monitoring performance within the organisation. This will most certainly help if an enforcing authority decides to investigate an incident involving that organisation, as it will demonstrate that they were doing everything reasonably practicable in the circumstances to avoid such an incident and proactively manage health and safety within its business.”
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