• Peter Bateman
    175
    In the Sept/Oct edition of Safeguard magazine we pose three questions based on stories in the magazine. One of them is this:

    Kirsty McDonald suggests we could adopt the UK practice whereby the courts use sentencing bands based on the defendant company's annual turnover. Would this produce a fairer level of fines, especially when sentencing smaller firms?

    Feel free to respond here on the Forum, or privately here via a Survey Monkey form.

    An edited selection of responses will be published in the Nov/Dec edition, but with no names attached. One randomly selected person will receive a prize, namely a copy of the new book The Practice of Learning Teams.
  • SafetylawyerNZ
    64
    Kirsty is right to raise this as an idea given its inclusion in the UK law, but it seems to me to be a terrible idea in practice.

    Firstly, and perhaps most importantly, there is no correlation between business turnover and business profit, so turnover is the wrong metric to assess a business against when looking to ensure a penalty "bites".

    Secondly, this type of model creates differential penalties for small and large businesses even when their respective culpability may be similar and reduces the flexibility courts have (and need) to customise a penalty to the circumstances of the offender and the offending.

    Thirdly, this approach is open to abuse. For example, a large business will be incentivised to incorporate separate companies for every location or function, so the measurable turnover is reduced.

    If there is a problem (and I'm not convinced there is), then the answer is to increase maximum fines and, perhaps, give the court guidance about how to assess different levels of culpability against those new maximums.
  • Tracy Richardson
    10
    It would be a good practice to adopt as the concept of workplace practices needs to be based on continuous improvement, whilst holding PCBUs accountable for transgressions that are affordable and enable them to stay in business so that their employees can continue working, and not join the unemployment line.
  • Rowly Brown
    21
    We already have the sentencing bands established by the High Court in the Stumpmaster case, and the guidelines for judges to follow in assessing aggravating and mitigating factors when assessing culpability. There are enough cases already to provide guidance in setting the size of penalties having regard to the financial impecuniosity of the defendant, or simple ability to pay. There is scope for the court to impose other measures (orders) on an impecunious business as a way of making amends for their failures. The reasons for retaining the current status quo outlined by @SafetylawyerNZ are fully valid.

    WorkSafe has the option of assessing culpability for health and safety failings on a case-by-case basis, and in doing so can elect not to prosecute in favour of other more productive outcomes following an investigation. This was in fact operational practice for OSH in the 1980's and 90's. Prosecution was reserved for repeat offenders, and those committing clearly flagrant and inexcusable breaches of the law.

    The introduction of reparations as part of the penalty regime to compensate seriously injured victims replaced the lump sum compensation formally paid by ACC. This shifted the rationale for prosecutions but the impact was largely covered insurance available to meet the costs of legal representation, technical support, and the payment of reparations. The amount of the uninsurable financial penalty continues to be set by the court having regard to the defendant's ability to pay. The Stumpmaster case established the new penalty setting considerations in four parts, including -

    (d) make an overall assessment of the proportionality and appropriateness of the combined packet of sanctions imposed by the preceding three steps. This includes consideration of ability to pay, and also whether an increase is needed to reflect the financial capacity of the defendant.

    In Stumpmaster the defendants limited financial means lead to the court imposing a fine intended to serve as a deterrent to other self-employed persons. The defendant's professed ability to pay was 20% of the discounted fine settled on by the lower court having regard to all the influencing circumstances. However the court directed that the fine imposed be paid in instalments over 4 & 1/2 years. The High Court endorsed this approach.

    I see no need for change, in the current prosecution and sentencing process other than in WorkSafe itself.
    The review of WorkSafe's prosecution model has identified the need for change. I don't think their current ideas are anywhere near the mark. Since the mid-1990s WorkSafe has followed the Police prosecution model, and in fact had many of their inspectors trained by police investigators. This is a seriously flawed model for use in the health and safety context, and unfortunately the Review was conducted by an ex-senior policeman, which did nothing to advocate a change in methodology, but focused on tightening the existing processes.

    The police investigation model seeks to establish whether an offence (crime) has been committed, and if evidence available suggests that is likely, they then set about identifying a perpetrator linked by the evidence to the offence. The focus becomes successfully prosecuting a perpetrator(s). They are pretty good at that, but we know what can happen when they have a perpetrator in their sights but gaps in their evidence.

    In a health and safety investigation, identifying as many as possible of the contributing factors to an event is the primary objective. Once identified, those that are potentially controllable are assessed as to the practicability of possible controls. The consideration then is (a) whether those controls were available at the time, (b) should a PCBU have known about those possible controls, (c) were there valid reasons or mitigating circumstances for the available controls not being implemented, (d) if not what level of culpability should attach to the PCBU in those circumstances, (e) is enforcement action from the range of available options warranted, (f) if prosecution is appropriate is there sufficient and compelling evidence support a successful case, (g) what are the positive and negative outcomes in prosecuting the specific case, and are there a justifiable grounds for an alternative option?

    Following that approach creates the opportunity to learn from events and develop workplace improvements that can be noted by WorkSafe and shared with industry. This approach is a quantum step away from the punitive approach embodied in the current WorkSafe investigation model, which focuses the courts on penalties and reparations.

    This would lead to greater use of Enforceable Undertakings, Project Orders, and other available tools that produce more positive than negative outcomes. WorkSafe could thus take a more conciliatory approach to investigations and enforcement action, utilising their range of tools between Dutyholder Reviews and Enforceable Undertakings. WorkSafe could ascertain a PCBU's financial resources and proceed accordingly. This would leave a lot more money available for health and safety improvements. A focus on following the investigation model described above, and looking at the culpability of "officers" and directors of a PCBU in the most serious events would go a long way to keeping industry focused on the duties and obligations imposed by the law.

    The Courts would then be hearing only the worst of the "cases", and this would both speed up the process, and reduce he costs, without further need to tinker with the law.
  • Tania Curtin
    112


    You summed it up perfectly!

    Something needs to be done differently, but I don't think this is the solution.
  • Steve H
    20
    If there is a problem (and I'm not convinced there is), then the answer is to increase maximum fines and, perhaps, give the court guidance about how to assess different levels of culpability against those new maximums.SafetylawyerNZ

    I'm a firm believer that the problem lies more with the lack of active (and consistent)policing of the various Acts and Regulations that should be receiving attention from our H&S regulator, and less with the fines and penalties handed out when things go pear shaped and they are forced to act.
  • Mark Taylor
    18
    I don't think that this will work, because the majority of fines since the new Act has been introduced have been based on the firms ability to pay without making them insolvent.
    And, this may be one of the reasons that accidents have not decreased in 10 years because the deterrent is not significant enough and manslaughter is off the cards?
  • Steve H
    20
    I don't think that this will work, because the majority of fines since the new Act has been introduced have been based on the firms ability to pay without making them insolvent.Mark Taylor

    It would be interesting to know how many PCBUs that receive a fine, get hammered again for a similar offence. I have had three clients get fined for workplace accidents, they subsequentially improved their approach to H&S procedures, which for two of them were already very good.

    The other was a small two man building company, who really lifted their game afterward, it was unfortunate that one guy got turned into a T3 paraplegic following a fall from the top plate of a single storey house while setting up the roof trusses without scaffolding in place. Ironically, scaffolding was due to be set up the next day, the guys thought it would be easier to get the trusses in place first.

    And, this may be one of the reasons that accidents have not decreased in 10 years because the deterrent is not significant enough and manslaughter is of the cards?Mark Taylor

    I wonder if a part is the lack of publicity that the few prosecutions get
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