When does Proceeds of Crime apply to Health & Safety?
Posted: Tuesday 31 January 2012
The Sunday Times recently featured an article suggesting that the Lord Advocate, Frank Mulholland, is exploring the possibility of using the Proceeds of Crime Act 2002 to seize profits secured by employers at the expense of health & safety.
Speaking at a recent House of Commons Scottish Affairs Committee hearing into Health & Safety in Scotland he said “If a company is skimping on health & safety, and over a five-year period is not spending the money it should spend to prevent a particular accident, and, as a result of the savings, they make profit and it all ends in tears with a work-related death, you prosecute that particular company. It seems to me it is then open for the prosecution to look at proceeds of crime and what profit that company has generated as a result of the health & safety breach of duty that has taken place over a significant period of time. We are trying to develop some thinking and an approach to that."
This idea creates some interesting challenges for Scotland’s prosecutors. The law as it currently stands allows the prosecutor to seek to confiscate, following a successful prosecution, the accused's "benefit" from the conduct concerned. Without a change to the law, and it may be that this is what the Lord Advocate is looking into, the application of that "benefit" test in a health & safety case might be difficult.
Another alternative under the legislation would be non-confiscation civil recovery in which case the Scottish Ministers need to identify property which has been obtained through unlawful conduct. Again, that may prove difficult, although not impossible, for a health & safety case unless there is a change to the law.
Assuming that the legal hurdles can be overcome this development has the potential to significantly increase the potential cost of an accident to some employers, although as explained later this need not be cause for panic for most. The proposal under consideration alongside the imminent extension of the HSE charging regime for Inspector time means that the potential cost implications of a serious incident in the future may include lost work time, internal time spent on investigations and liaison with the enforcement authorities, contribution to costs of settling insurance claims, increased insurance premiums and in the worst cases fines, possible prison sentences for Directors, significant HSE invoices and confiscation of property or assets.
It is important to be clear about the fact that the Lord Advocate does not appear to be suggesting that confiscation of property should become the norm in all cases where an employer has been prosecuted for breach of health & safety law. The target appears to be employers who are, over a long period of time, sacrificing safety in order to make a profit. It follows that responsible employers who are taking a common sense, proportionate approach to health and safety should have nothing to fear.
If you would like to discuss proceeds of crime you can contact Douglas Milne at douglas.milne@morton-fraser.com, or if you would like to discuss health & safety matters you can contact Claire Anderson at claire.anderson@morton-fraser.com
