14.12.2007

Directors may face ban over breach of safety rules

Directors found guilty of serious health and safety offences are also likely to be banned from running a company if new sentencing guidelines come into force.

The warning from law firm DWF follows a report by Warwick University on behalf of the Health & Safety Executive, which says that too few directors are being disqualified for flouting health and safety rules.

While the Company Directors Disqualification Act, introduced in 1986, allows the courts to disqualify directors who are in breach of their duties, in the period up to 2005 just ten had been banned for health and safety offences. The majority of disqualifications are for financial reasons, such as insolvency.

The report found the prosecutors and judges were failing to use the Act because of a lack of awareness. It recommended that the HSE should issue guidelines as to the circumstances in which it would be appropriate to disqualify a director, and urge prosecutors to apply to the court for a disqualification order as a matter of course in these types of cases.

Steffan Groch, health and safety partner at DWF, said: “Directors should be warned. The HSE will be encouraging prosecutors to use their powers under the Act. It means that, for serious breaches of health and safety rules, they will not only risk a large fine but also could be banned from running a company.

“This latest measure is part of a wider clampdown on organisations who breach health and safety rules. The HSE is taking a much tougher approach in prosecuting offenders and fines are increasing. Meanwhile the introduction of the new offence of corporate manslaughter in April 2008 will put the actions of directors under the spotlight as never before.”