Health & Safety level of fines set…

The High Court has reviewed all cases of fines under the Health & Safety at Work Act and outlined the factors to be taken into account in setting penalties under the Act.

The High Court has set out the four steps for assessing penalties which are:

1. Assess the amount of reparation to be paid;
2. Fix the fine in accordance with the guidelines and aggravating or mitigating factors;
3. Decide on any further orders, such as adverse publicity orders or orders for payment of the costs of the investigation; and
4. Assess the overall proportionality and appropriateness of the combined packet of sanctions.  This includes the company’s ability to pay penalties and any increase necessary to reflect the financial capacity of the Defendant.

In relation to PCBUs (that are not individuals) the High Court has set four bands for the starting point of any fine.  They are:

• Low – up to $250,000

• Medium - $250,000 to $600,000

• High - $600,000 to $1million

• Very High - $1million to $1.5million

In accessing the penalty the Court will take into account the nature and seriousness of the risk of harm, as well as the actual realised risk that eventuated.  It will also consider the degree of departure from the standards required and the obviousness of the hazard.  Other factors taken into account will be the availability, cost and effectiveness of the means to avoid the hazard and the knowledge of the risks and nature of the harm at the time of the offence.  The last factor taken into account is the knowledge and the means to avoid or mitigate that hazard.

These tests and levels set by the High Court will guide the District Court in sentencing matters under the Act and will likely mean an increase in penalties imposed because the High Court also commented that deductions being given for payment of reparation and mitigating factors were too large.

Alan Knowsley

Health & Safety & Employment Lawyer
Wellington