What Cost Health And Safety?
Monday, June 01, 2009
by
David Stevenson
Who knows what the next 6 months will bring? When the economic climate is so uncertain, eyes can get fixed on the bottom line and thoughts focused on preserving the future of the business. It can be all too easy to let good practices slip (apologies for the rather deliberate pun). However, all organisations should be mindful of not losing sight of health and safety, even in these challenging times. When budgets are tight and we are living in an unpredictable world, it can be tempting to cut expenditure. But what about health and safety? It shouldn’t be viewed as a disposable cost. All businesses should be wary of letting their commitment to health and safety slide and continue taking basic steps to protect their organisation from preventable incidents. Not only do they cause immediate harm and cost to individuals and the business, they cause long term costs that impact the bottom line.
What costs? Well, any incident involving personal injury, death or damage to property will probably result in a “claim”. This is typically a claim for compensation. Usually businesses have insurance cover to protect the bulk of the cost of claims, but any excess and lost management time hits the bottom line directly. Increased claims premiums are a longer term impact. However, serious incidents that don’t result in injury may still result in court action. Some health and safety followers might remember the £700,000 fine imposed on Nishimatsu Construction Company Limited in 2004 when a large explosion damaged some property. No-one was injured because the explosion happened in the middle of the night. Had it happened during the day, there could have been injuries and/or fatalities. The potential seriousness of the incident resulted in a hefty fine. Whether it is a civil damages claim through the courts, an HSE prosecution or a Fatal Accident Inquiry/Public Inquiry/Coroner’s Inquest, no organisation wants to face those. Apart from the imposition of a fine (which must be paid by the company, not insurers) the burden on the organisation through lost employee time, lost management time, stressed individuals who might have to appear in court to give evidence and damage to reputation will all take their toll on the business. So to avoid incidents and court action in the first place, maintain simple steps to best protect your organisation:
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Make sure your business complies with its health and safety statutory obligations. Set out a health and safety policy, commit to it and deliver that policy. Do what you said you would. Do risk assessments, method statements, training and take enforcement action immediately if you see breaches of the policy.
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Continue to proactively monitor health and safety by encouraging the reporting of not only accidents but near misses. Audit staff by carrying out spot checks to make sure they are complying with policy and procedures and that they understand the procedures they should be using.
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Continue to review your organisation’s approach to health and safety and keep up to date (if not ahead) with best practice.
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If things do go wrong, make sure you have evidence to best represent your organisation’s interests. Keep the relevant paperwork necessary to defend your company’s actions.
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Review your insurance position and make sure you have adequate cover for various scenarios. Keep all policy documentation and a secure insurance history file in the event that you suddenly face new litigation arising from an incident that happened many years in the past. If you can’t trace your insurers, your organisation will have to pay any damages and costs awarded.
If there is to be an increase in litigation in the short to medium term as a result of the economic difficulties facing us, do what you can to ensure that your organisation is not another statistic.
If you require further information on the issues raised by this article, please contact David Stevenson, Partner, at dstevenson@biggartbaillie.co.uk on 0141 228 8000.
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The information contained in this article is given for general information only and does not constitute legal advice on any specific matter.