Health and Safety Law – Avoid falling off a ladder and into the dock
Health and Safety Law rarely arouses interest, either amongst companies or lawyers, yet its importance is growing and it has become the area in which companies and their directors are likely to find themselves in the dock, facing a criminal prosecution.
In many jurisdictions, as with other regulatory offences, the legislation covering Health and Safety prosecutions is not new, but there is a growing appetite amongst regulatory authorities to seek criminal sanctions for non-compliance. For example, in England and Wales, the legislation governing health and safety law dates back to 19741 but provides for a wide-ranging set of duties at section 2. These include duties towards, as far as is reasonably practicable:
(a) the provision and maintenance of plant and systems of work that are safe and without risks to health;
(b) arrangements for ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances;
(c) the provision of such information, instruction, training and supervision as is necessary to ensure the health and safety at work of his employees;
(d) as regards any place of work under the employer’s control, the maintenance of it in a condition that is safe and without risks to health (including the ability to safely enter and exit it); and
(e) the provision and maintenance of a working environment for his employees that is without risks to health, and adequate as regards facilities and arrangements for their welfare at work.
Less obvious risks
Although it is likely that most pharmaceutical companies and other organisations engaged in drug development work have a good understanding of the risks associated with working with potentially toxic materials (which may, indeed, be covered by separate regulation) or dangerous laboratory equipment, often the dangers may be more prosaic. For example, I have been involved in a prosecution arising out of the cleaning of a company’s roof—something entirely unrelated to the company’s business—whilst the Health and Safety Executive’s guidance on the pharmaceutical industry is mostly concerned with laboratory ergonomics, such as the height of lab stools². It is therefore clear that a wide view should be taken to all risks, including ones incidental to the ‘core business’ and most obvious risks.
Prosecutions and director’s personal liability
In addition to civil enforcement action (such as the service of notices requiring a company to stop certain work or improve it), for company directors there is a further danger in the act, under section 37, which makes breach of any of these duties a criminal offence. Liability extends to any company director or manager with ultimate authority who consents to or connives (i.e., turns an eye away) from the breach, or is negligent in his or her duties. Punishments can include an unlimited fine and up to two years’ imprisonment (in addition to any fine imposed on the company, itself).
Smaller drug development companies may be particularly at risk since they will have fewer resources to be able to devote to the subject. Furthermore, anecdotal experience suggests that prosecuting authorities seem more willing to prosecute directors of smaller companies personally, perhaps since it is easier to show knowledge of the problems when there are fewer management layers.
There are various ways for a company to protect itself against prosecution. The most important is to engage, positively, with Health and Safety so that in the event of an investigation following an accident, it can produce a substantial body of material demonstrating that it has considered the risks, assessed them, and attempted to mitigate them. Openness with regulators, in many jurisdictions, can also help.
Furthermore, whilst all drug development companies should have insurance in place to cover themselves against civil actions caused by their work, it is worth considering the scope of this coverage in respect of prosecutions. Whilst insurance is unlikely to be available to cover any financial penalty or fine, it may cover the costs of criminal proceedings which can be lengthy and expensive. For directors, it may be worth considering if the company’s insurance will also cover individual liability and, if not, whether separate Director’s and Officer’s Insurance should be taken out for protection.
- Health and Safety at Work etc Act 1974