Richard Schooling's Blog: 11 December 2007
11 December 2007
It's impossible to put a monetary value on the loss of someone's life. But that is what the Corporate Manslaughter Act has to do. The draft sentencing guidelines for a conviction under the Act suggest...
The price of a life
It's impossible to put a monetary value on the loss of someone's life. But that is what the Corporate Manslaughter Act has to do.
The draft sentencing guidelines for a conviction under the Act suggest a tariff of 5% of the employer's annual turnover. The figure could be raised to as much as 10% or reduced to 2.5%, depending on the severity of the case.
To put that in context, the UK's largest health and safety fine to date was £15 million, imposed in 2005 after a gas explosion killed a family of four in Scotland. That fine was equivalent to less than 1% of the defendant's annual turnover and around 5% of its profits that year.
In fact, the average fines for deaths at work in 2004/5 were much lower - around £30,000.
The guidelines proposed by the Sentencing Advisory Panel will make the potential cost of negligence that much clearer to employers. They also cover penalties for fatality convictions under the Health and Safety at Work Act - between 1% and 7% of turnover.
However, the Centre for Corporate Accountability believes the proposed fines are too low. It points out that they are about the same as the penalties for breaching EU competition laws. Firms should pay more if they kill people, says the CCA.
Perhaps they have a point. In one sense, tying the fines for corporate killing to turnover seems to suggest that lives are cheaper in smaller companies.
Of course the real point is that a single work-related death on the roads is one too many. Let alone the estimated 1000 that occur every year in the UK.
The simple message fleets should take home from that figure is that it is always better to get out the HSE's guidelines on driving at work before something goes badly wrong than to have to get the cheque book out in court afterwards.