Research by Arinite found health and safety fines in 2016 by far outstripped the cost of compliance. It found that businesses paid an average of £115,440 in fines after being found guilty of health and safety breaches in 2016. These fines was very varied – from £100 for a construction company, to £5 million for Merlin Entertainments and the Alton Towers incident.
Averages also differed greatly across industries. Extraction and utility supply companies paid out the second largest amount (£7,375,120 total and £409,729 on average), followed by those in construction (£4,824,983 total and £74,231 on average). Of all the fines issued in 2016, half of them were for the manufacturing industry (£16,816,673) and the average fine was over £112,000. A total of £32,438,677 worth of fines were issued in 2016 across the UK.
Cost of compliance
The cost of health and safety compliance for SMEs in 2016 was between £5k and £40k, to put this into perspective. SMEs that invested in health and safety therefore potentially avoided a fine £75k higher than the cost of compliance. According to HSE’s own research, small to medium sized businesses can expect to pay no more than £40k per year to remain health and safety compliant. Compliance costs typically cover such things as the maintenance of a formal health and safety system, insurance, and compensation for a designated health and safety role or person.
However, for larger businesses, the compliance costs can be a lot higher. But health and safety failures at these companies rarely just result in a fine – a major accident incurs the total cost of injuries and ill health sustained, not to mention the PR costs when these offenses sometimes make the trade magazine headlines. Laing O’Rourke was told to pay £800k in fines recently for a fatality caused on their Heathrow project.
Evidence from HSE shows that the size of fines in Britain have been growing steadily over the past few years. The largest 20 fines to businesses for health and safety offenses in 2016 were three times more than the largest 20 fines in 2015, and eight times higher than in 2014.
Avoiding health and safety fines
To avoid unnecessarily high fines in 2017, IOSH have provided specifics on how businesses can prevent and reduce the cost of a fine. Note: they are a guide on how to mitigate severity and aren’t necessarily about how to remain health compliant, for that you need to consult HSE.
Factors increasing seriousness of a fine include:
Cost-cutting at the expense of safety
Deliberate concealment of illegal activity
Breaching a court order
Obstruction of justice
A poor health and safety record – it’s worse if there was a previous conviction