Directors could be banned from running a company if they are found guilty of serious health and safety offences, according to a new report.
The study, compiled by Warwick University and law firm DWF, found that too few directors are being disqualified for flouting health and safety legislation and recommends that new sentencing guidelines should be enforced.
Current legislation, the Company Directors Disqualification Act, allows courts to disqualify directors that are in breach of their duties. However, in the period up to 2005 only ten had been banned for health and safety offences.
The majority of disqualifications were for financial reasons, such as insolvency.
The report also found that there is a lack of awareness among judges and prosecutors, resulting in a failure to apply it. The study went on to recommend that guidelines should be issued detailing the circumstances in which it would be appropriate to disqualify a director.
“Directors should be warned,” said Steffan Groch, health and safety partner at DWF. “The HSE will be encouraging prosecutors to use their powers under the Act. It means that, for serious breaches of health and safety rules, they will not only risk a large fine but also could be banned for running a company.”
He added: “This latest measure is part of a wider clampdown on organisations who breach health and safety rules. The HSE is taking a much tougher approach in prosecuting offenders and fines are increasing.
The introduction of the new offence of corporate manslaughter in April 2008 will put the actions of directors under the spotlight as never before.”
© Crimson Business Ltd. 2007
