Managing investigationsJuly 2016, Manchester

Points to cover• To consider why it is vital to

• Manage our various duties• Manage the investigation if we don’t comply

• To identify common themes in the investigations and prosecutions

• To identify potential areas of weakness within the organisation

• To review the various elements of investigations• To consider the legal consequences of failures for

both the business and the individual• To identify a way forward

Who can investigate? • Police – Criminal and Coroner’s Officers• Health and Safety Executive• Environmental Health / Trading Standards• Care Quality Commission• Fire Authority• OFSTED• Financial Conduct Authority• HM Revenue and Customs• Gangmasters Licensing Authority

Legal reasons to manage duties • You have to! E.g. RIDDOR, Duty of Candour, FSA• Failing which

– FFI– Enforcement Notice– Suspension / Conditions /Cancellation of registration or

authorisations– Prosecution

Sentence Reputation

Economic reasons to manage duties • 2013/14-workplace injury (including fatalities)

cost £4.9 billion• In 2014/15 - 4.1 million due to workplace

injuries.

Moral reasons

Common themes in breaches of duty• Lack of or poor risk assessment• Ineffective monitoring/supervision• Failure to adequately train staff• An unjustified acceptance that what is in

place is both– Best practice, and– Being followed in practice

Judge’s comments in recent prosecutions of major company

• Do any of these comments ring alarm bells with you?– “It is accepted by the defendant that he (the injured person)

should have been supervised to ensure that no bad habits evolved”

– “The company’s failure was a failure to supervise a trusted and experienced employee (the person who was supposed to be looking after the injured person)”

– “Monitoring was crucial as it was known that employees make mistakes. Monitoring and supervision were so important here due to the circumstances. The risk of explosion were small, but the risk to human safety was great.”

Where companies often fail

• Poor training of front line workers, especially in critical roles

• Procedures and systems not followed by front line staff and junior management

• Poor management of regulatory compliance at the operational level

• Middle managers telling senior managers what they want to hear

• Poor communication with staff and contractors

Where companies often fail• Inadequate monitoring of performance, or not

proportionate to the risks being managed

• Senior management making decisions on incomplete/wrong information that affect regulatory compliance (e.g. budgets and resources)

• Failing to formally close actions

• Not learning from experience

Do you have any of these Achilles heel(s)?

• Inherently hazardous business• Multi-site operations• Contractors• Multiplicity of regulatory requirements• Number of employees• Transformation projects

What happens if things go wrong?

• Who and what might be involved :– Police – HSE / other regulators– Coroner – Claimants– Insurers– Third parties i.e. press / FOI– Internal investigations – Serious Untoward Incident– Professional bodies– Disciplinary investigation– Serious case review

Managing a criminal investigation

• Early steps :– RIDDOR / Reporting to other regulators– Police primacy – other regulators support– Taking witness statements – Section 9 CJA 1967- legal

support ie comment on policies– Seizure of documents – PACE 1984– Compulsory powers – Section 20 HSWA 1974 and

equivalent– Arrest– MANAGED CO-OPERATION

Managing a criminal investigation

Data Protection Act• DPA 1998

– Personal Data – Reasonableness of request – Consent– Exemptions– Section 29 DPA – crime exemption gateway only– Disclose only as necessary / proportionate– Subject Access Requests – redaction– Confidentiality GMC / NMC guidance

Managing a criminal investigation• Immediate Practical Steps

– Act quickly– Identify Inspector and Supervisor from regulator– Appoint suitable person within organisation to liaise and

coordinate– Log all documents submitted – Support / inform and expect vice versa from staff –

subject to conflict– Set up proper information sharing in your organisation– Taking early legal advice – NB conflict– Notify insurers– Instruction of expert

Managing a criminal investigation• Who will they want to speak to?

– Witnesses to incident– Junior staff re culture– Those with a responsibility for regulatory

compliance, management or policy development

– Senior managers operational and non operational

– Third parties i.e. sub contractors, consultants, clients

Managing a criminal investigation• What documents might they want?

– Regulatory policies– Policies relating to incident– Training records and qualifications of staff– Training and risk assessment policies– Relevant risk assessments and method

statements

Managing a criminal investigation

– Personnel files including disciplinary– Safe working practices– Induction documentation– Board minutes– Minutes of Committee meetings e.g. H&S /

environmental– Maintenance policy– Certifications relating to equipment– Internal investigation report / SUI and supporting

documentation – privilege?

Managing a criminal investigation • Non-privileged incident report

– Duty of candour – SUI / serious case review?– Remit / scope– Author– Draft / unsigned– Advice– Action plan – Distribution

Managing a criminal investigation• Privileged incident report

– Author / recipients / draft– Legal privilege?– Prepared for the purposes of legal advice and

in contemplation of litigation– Methods

Managing a criminal investigation• Disclosure to Police / regulator

– Consent– Police powers – NB excluded material– Duties under DPA 1998– Is the request reasonable?– The right person to give the statement – drawn into

proceedings– Keep good record

Managing a criminal investigation• Third party request for information

– Who might ask Family – what is appropriate when Local organisations Press Members of public Employees

– Relevant law Freedom Of Information Act – exemptions? Data Protection Act

Managing a criminal investigation• Support of witnesses / suspects

– Witnesses Union rep Union solicitors Trust solicitors Independent solicitors

– Suspects Union solicitors Independent solicitors Financing

Managing a criminal investigation• Interview under caution• May be conducted by Police and / or other

regulator• “Where a person is suspected of having

committed an offence”• Tape recorded or contemporaneous notes or

evidence obtained during questioning admissible in criminal proceedings

• Legal rep / conflict

Managing a criminal investigation• Taking advice

– Legal advice Law Society guidance – employer / employee Request for documentation by Police / Regulators

/ third parties Advising the Board Addressing conflict Internal investigation

Managing a criminal investigation

– Expert advice Examination of equipment Cause of death Cause of accident ie engineer Health and safety / care given expert opinion

– Others Crisis management Public relations /perceptions

Managing a criminal investigation• Publicity/ Perception

– At all stages– Continuity required– Press release for specific occasions?

Incident Inquest Decision to prosecute Dismissal of staff Verdict in prosecution

Civil Claims - Investigations

Collaboration and

Efficiencies

Policy Cover

Liability decision

Rehab and Quantum

Experts - Network

InquestsWhen must the Coroner investigate a death? • Death is violent or unnatural (including death due to self harm)• The cause is unknown• Death in custody or state detention

What is the purpose of an inquest?• Fact finding exercise

– It is not a trial / purpose is not to apportion blame but…– It may feel like it during the inquest…!

• Four key questions– Who the deceased was?– How, when and where the deceased died?– NB: Article 2 provisions – “how and in what circumstances”

• Conclusions and liability [s10(2) CJA 2009 /old rule 42]– “No conclusion shall be framed in such a way as to appear to

determine any question of:1. Criminal liability on the part of a named person, or2. Civil liability’’

Inquest pathway• Coroner opens inquest shortly after death• Coroner’s Officer collates evidence• Pre-inquest reviews (PIR) in complex cases

– Includes written / oral submissions on jury / Article 2 / witnesses / disclosure

• Coroner’s Officer swears in jury (if applicable)• Coroner sums up/directs jury

– Includes written / oral submissions on conclusion• Conclusion / completion of inquisition form

• Support those attending• Impact on other aspects of case• PFD

Prosecution• Health & Safety Prosecutions (2014/15)

– HSE 650 cases and LA 78 cases– HSE conviction rate 86% and LA conviction rate 93%

• CQC – first prosecution – failing to provide safe care - £190,000 fine and £16,000 towards costs

• EA – August 2015 – breach of all 3 waste regulations - £45, 500 fine and £9,000 costs

• Food Safety – January 2016 - 99p Stores Ltd fined over £400,000 for rat infestation

• Fire Authority – February 2016 – fatal fire in residential tower block - £40,000 fine and £23,000 costs (not-for-profit organisation)

Company prosecution• Health and Safety at Work Act 1974, section 2

– It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees.

• Health and Safety at Work Act 1974, section 3– It shall be the duty of every employer to conduct his undertaking

in such a way as to ensure, so far as is reasonably practicable, that persons not in his employment who may be affected thereby are not thereby exposed to risks to their health or safety

• Similar in other regulatory provisions

Section 7 and 37 HASAWA• It shall be the duty of every employee while at

work to take reasonable care for the health and safety of himself and of other persons who may be affected by his acts or omissions at work (section 7)

• Director, manager, secretary or other similar officer - the offence was committed by the company with the consent of, connivance of or to have been attributable to the neglect of those persons (section 37)

• Similar in other regulatory provisions

HSE/Regulatory Guidance• General Enforcement Policy

• Enforcement Policy Statement requires Inspectors to identify and prosecute individuals where warranted

Prosecuting Individuals• E.g. HSE Operational Circular 130/8

– "In general, prosecuting individuals will be warranted where there are substantial failings by them, such as where they have shown wilful or reckless disregard for health and safety requirements, or there has been a deliberate act or omission that seriously imperilled their health/safety of others"

If prosecuted• Defend or mitigate?

• Basis of Plea– Important document– Different to any response to the case summary– Keep it clear and concise

Sentencing guidelines• Sentencing guidelines - health and safety

offences, corporate manslaughter and food safety and hygiene offences guidelines

• Environmental Offences - Definitive Guideline for the sentencing of environmental offences.

Sentencing guidelines - health and safety offences, corporate manslaughter and food safety and hygiene offences guidelines• When?

– Sentenced on or after 1 February 2016– “Regardless of the date of the offence”

Sentencing guidelines - health and safety offences, corporate manslaughter and food safety and hygiene offences guidelines• What?

– Applies to health and safety and food safety breaches and Corporate Manslaughter

– In practice also used in other regulatory prosecutions

– The Guidance provides a series of fine ranges for offences with starting points within each range

– There is then adjustment up or down from this starting point within the given range

Sentencing guidelines - health and safety offences, corporate manslaughter and food safety and hygiene offences guidelines• How?• Step 1

– Determine offence category based on culpability and RISK of harm

– Culpability has four ranges from “very high” to “low”

– Harm is based on seriousness and likelihood

Still step 1• Court then considers

– Whether the offence exposed a number of workers or members of the public to the risk of harm

– Whether the offence was a significant cause of actual harm

• If one or both of these factors apply the court must consider either moving up a harm category or substantially moving up within the category range at step two

Step 2• Starting point and category range

– the court is required to focus on the organisation’s annual turnover or equivalent to reach a starting point for a fine.

– The court should then consider further adjustment within the category range for aggravating and mitigating features.

Turnover• Micro: Turnover not more than £2million• Small: Turnover between £2 million and £10 million• Medium: Turnover between £10 million and £50

million• Large: £50 million and over• If an organisation's turnover very greatly exceeds the

threshold for large companies then it may be necessary to move outside the suggested range to achieve a proportionate sentence.

Very high culpability

Then….adjustment• Factors increasing seriousness include

– Previous convictions, having regard to a) the nature of the offence to which the conviction relates and its relevance to the current offence; and b) the time that has elapsed since the conviction

– Cost-cutting at the expense of safety– Deliberate concealment of illegal nature of

activity– Poor health and safety record

• Factors reducing seriousness or reflecting mitigation– No previous convictions or no relevant/recent

convictions– Evidence of steps taken voluntarily to remedy

problem– High level of co-operation with the

investigation, beyond that which will always be expected

– Good health and safety record– Effective health and safety procedures in place– Self-reporting, co-operation and acceptance of

responsibility

Step 3• Check whether the proposed fine based on

turnover is proportionate to the overall means of the offender

Step 3• “The fine must reflect the seriousness of the

offence and the court must take into account the financial circumstances of the offender.

• The level of fine should reflect the extent to which the offender fell below the required standard. The fine should meet, in a fair and proportionate way, the objectives of punishment, deterrence and the removal of gain derived through the commission of the offence; it should not be cheaper to offend than to take the appropriate precautions.”

Step 3• “The fine must be sufficiently substantial to have

a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation”

Step 4• The court should consider any wider impacts

of the fine within the organisation or on innocent third parties; such as – the fine impairs offender’s ability to make

restitution to victims;– impact of the fine on offender’s ability to

improve conditions in the organisation to comply with the law;

– impact of the fine on employment of staff, service users, customers and local economy (but not shareholders or directors).

• Step 5– Consider any factors which indicate a

reduction, such as assistance to the prosecution

• Step 6– Reduction for guilty pleas

• Step 7– Compensation and remediation

• Step 8– Totality principle

• Step 9– Reasons

Other consequences•Publicity Orders•Remedial Orders•Indirect financial/commercial consequences

• Management time/Absences• Insurance premiums/uninsured losses• Tendering disadvantages• REPUTATION

Proactive Health & Safety Management• Leading Health and Safety at Work : actions for Directors, Board

members, business owners and organisations of all sizes – www.hse.gov.uk/ leadership

• Essential Principles• 4 point agenda to implement above

– Plan– Do– Check– Act

What do companies need to do?• Review regulatory policies, systems and

procedures• Keep up to date with regulatory legislation and

guidance applicable to the business• Consider industry standards - establish what

benchmarks should be applied. Legal compliance should be viewed as a minimum standard.

• Ensure risk assessments are kept completely up to date and reviewed when circumstances change.

• Determine who would be considered to fall within the definition of “senior management” and ensure their competence for that role.

What do companies need to do?• Review the company’s “culture” – not just the official

documents, policies and procedures but what happens “on the ground”, and how procedures are enforced. Effective compliance measures will be crucial.

• Ensure the Board is involved in the process and is promoting regulatory compliance

• Protect employees by telling them about regulatory issues that affect them

• Check what insurance cover is in place• Enforce compliance i.e. disciplinary

What do companies need to do?• Protocol for regulatory investigation

– Outlines a plan– Identify key parties internally /contacts externally– Set out regulators powers– Framework for what investigation involves– Key steps to consider

Key Points• Be informed• Act swiftly to avoid prejudice• Early legal advice – before the event?• Be prepared for conflict and have a plan to

manage internally• Be prepared for each stage• Manage regulatory compliance

Speak to us…

Paul Smith| 0121 237 4567paul.smith@brownejacobson.com

Stephanie McGarry| 0115 908 4113 stephanie.mcgarry@brownejacobson.com

Andrew Hopkin| 0115 976 6030 andrew.hopkin@brownejacobson.com