Legal and financial arguments

Introduction to Health and Safety at work

Legal and financial arguments

Legal arguments


The legal arguments, concerning the employer’s duty of care in criminal and civil law, have been covered earlier. Some statistics on legal enforcement indicate the legal consequences resulting from breaches in health and safety law. There have been some very high compensation awards for health and safety cases in the civil courts and fines in excess of £100 000 in the criminal courts. Table 1.7 shows the number of enforcement notices served over a three-year period. Most notices are served in the manufacturing sector followed by construction and agriculture. Local Authorities serve 40% of the improvement notices and 20% of the prohibition notices.

Table 1.8 shows the number of prosecutions over the same three-year period. HSE present 80% of the prosecutions and the remainder are presented by Local Authority Environmental Health Officers. Most of these prosecutions are for infringe¬ments of the Construction Regulations and the Provision and Use of Work Equipment Regulations.

There are some clear legal reasons for sound health and safety management systems.

                           Table 1.7  Number of enforcement notices issued

                                             over a three-year period

Legal and financial arguments

                           Table 1.8 Number of prosecutions a three-year period 

Legal and financial arguments


1.14.3 Financial arguments


Costs of accidents


Any accident or incidence of ill-health will cause both direct and indirect costs and incur an insured and an uninsured cost. It is important that all of these costs are taken into account when the full cost of an accident is calculated. In a study undertaken by the HSE, it was shown that indirect costs or hidden costs could be 36 times greater than direct costs of an accident. In other words, the direct costs of an accident or disease represent the tip of the iceberg when compared to the overall costs (Figure 11.1).

Legal and financial arguments


Figure 1.11   Insured and uninsured costs.

Direct costs

These are costs that are directly related to the accident. They may be insured (claims on employers’ and public liability insurance, damage to buildings, equipment or vehicles) or uninsured (fines, sick pay, damage to product, equipment or process).

Indirect costs

Again these may be insured (business loss, product or process liability) or uninsured (loss of goodwill, extra overtime payments, accident investigation time, production delays).

Therefore, insurance policies can never cover all the costs of an accident or disease, either because some items are not covered by the policy or the insurance excess is greater than the particular item cost.


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