Hauliers face bankruptcy over multi-million pound fines.

Hauliers face bankruptcy over multi-million pound fines.

New sentencing guidelines which impose heavier penalties on hauliers for health and safety breaches and on their drivers for driving offences could force some firms into bankruptcy, a leading transport lawyer has warned.
Vikki Woodfine, Partner at law firm DWF LLP and Lead Commentator on Croner-i Road Transport, said some haulage companies could be forced to the wall by fines that could see medium sized firms fined up to £4m for health and safety offences.
As well as potentially ruinous fines, companies were also having to bear the cost of contested cases because the Health & Safety Executive was adopting a policy of bringing cases at the highest level of culpability (and hence penalty) in “the vast majority of cases” forcing firms to go to court to argue for a lesser offence.
At the same time, tougher penalties for serious driving offences with fines of almost twice a driver’s weekly income plus disqualification may cost drivers their livelihoods and will only add to the risk of Traffic Commissioners calling a driver conduct hearing, threatening the company’s operator’s licence.
Woodfine urged the HSE to take a fairer approach and a more realistic view of culpability and harm when bringing cases to court if it wanted to reduce the number of contested cases which placed a heavy burden on public funds as well as companies.
She said: “In practice, companies are now faced with the most impossible of dilemmas when it comes to deciding whether to defend a prosecution. There has always been a fine reduction when pleading guilty and this remains the case. However, given the new fine levels, there has been an increase in the number of defended cases as companies simply cannot just accept their fate anymore given that the guidelines expose them to potentially business ending fines.
“The guidelines have introduced a very real fear for small and medium-sized organisations that even if they plead guilty… they may still have to pay a fine where the starting point is £250,000 or more, which is often a prospect that could put them out of business.
“Consequently, the advice to duty holders is changing, with many companies now seeking to test the prosecution evidence before a jury. While the company runs the risk of being found guilty… the judge may place the offence into a lower bracket in the guidelines… thereby reducing the overall penalty.
“We are often seeing the HSE start the vast majority of cases saying that they are High Culpability, Category 1 Harm. The defence then seeks to say Low Culpability, Category 3 Harm and the hope then is that the judge will decide Medium Culpability, Category 2 Harm. But there is no certainty in this approach, and with the HSE stating cases at their highest point, companies cannot take the risk and are contesting cases
“If the HSE wishes to see a reduction in contested trials (which take up significant manpower for them and a cost risk) a fairer approach from the HSE has to be adopted whereby it takes a more realistic view of culpability and harm at the outset.
“As the sentencing guidelines for health and safety offences have now bedded in and high fines are increasingly the norm, the next phase that will be interesting to watch from the courts is how they deal with group companies. It is unlikely to be long before we see a case where an attempt is made by the courts to sentence an organisation based on the turnover/financials of a “linked organisation” i.e., the Group or Parent Company.”