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Failure to Fulfil the Duties of Directors and the Criminal Law Consequences

Failure to Fulfil the Duties of Directors and the Criminal Law Consequences

Director Jailed for Sale of Illegal Chemicals

Directors inevitably think about the civil law penalties they could face if and when things start to go wrong for them and their companies. Director disqualification is typically, for example, a civil law penalty, used at insolvency to penalise directors for not carrying their duties out correctly. However, there are also criminal law consequences for all company Directors who do not carry out the duties of directors, with sanctions ranging from being fined to receiving a prison sentence, or both.

In this article we look at a case where the director was jailed for 10 months, following a Health and Safety Executive investigation, for the sale of illegal chemicals which are known to have caused fatalities. This case is a timely reminder of how easily – and severely – things can go wrong for the Director who does not fulfil his/her duties as a director.

Background to This Case

 Mr Nicholas Corbett (‘Mr Corbett’), Director of Abel (UK) Ltd (‘the Company’), was recently sentenced to 10 months in prison for the online sale of products containing prohibited substances.

The Court heard how Mr Corbett was selling a plant protection product containing Sodium Chlorate, a prohibited substance, as well as a paint stripper containing dichloromethane (DCM), which is restricted under Registration, Evaluation, Authorisation and restriction of Chemicals (REACH).

The Company also failed to check at the point of sale whether the paint stripper containing DCM was either being sold for use in industrial installations or, after October 2016, to appropriately certificated professionals, which is a condition of sale.

The Consequences of the Director’s and the Company’s Actions

Mr Corbett of Weddington Road, Nuneaton pleaded guilty to breaching Regulations 9 and 18 of The Plant Protection Products Regulations 2011 and Regulation 11(2) of The REACH Enforcement Regulations 2008 and was given a 10-month custodial sentence.

HSE Comment

Speaking after the hearing, HSE inspector Sarah Dutton said:

“Chemicals are carefully regulated to protect human health and the environment. Sodium Chlorate is not approved for use in weed killers, as a safe level of use was not established for operators. Dichloromethane (DCM) has been restricted in paint strippers due to concerns for human health during its use – it has caused fatalities when not used properly.

Companies should be aware that HSE will take robust action against those who unnecessarily put the lives of workers and the public at risk, and against those who endanger the environment, through the inappropriate supply and use of chemicals , and will not hesitate to take action against those that fall below the required standards.”

Our Solicitors Comment

Had Mr Corbett taken the time to consider the safety of his customers, and the implications of the products he was selling, he could have been avoided the prison sentence imposed on him as a result of the HSE’s investigation.

The case is a reminder that compliance with Health and Safety Legislation is a statutory requirement for Directors and that a failure to observe such duties can result in a prison sentence for a defaulting Director.

It is also a salutary reminder of the criminal law enforcement action the HSE can and will take against Directors if there is a failure to comply and that Company Directors will be pursued personally in respect of Health and Safety breaches.

Our Role

As Solicitors specialising in the area of regulatory compliance, we are well used to dealing with the tactics and strategy of defending such cases, to the best advantage of the Company and its Directors. We are also experienced in working with the insurers for the Director and/or the Company in such cases.

Contact us for Help and Advice Regarding the Duties of Directors

If you have any questions regarding the duties of directors under Health and Safety legislation or more generally, and the effect of non-compliance in any case, please contact us or call us today on 0121 200 7040 for a FREE, no obligation initial chat.

HSE and Regulatory Compliance Disputes

HSE and Regulatory Compliance Disputes

COMPANY AND ITS DIRECTOR FINED IN CRIMINAL LAW PROCEEDINGS FOR EXPOSING WORKERS TO FALL FROM HEIGHT RISKS

An investigation by the Health & Safety Executive (‘HSE’) into workplace risks and accidents can be intrusive and disruptive to you, as a Director, and your business. In regulatory compliance disputes where the case goes against you, fines and even custodial sentences can be the result for not fulfilling statutory Directors’ duties. In this article, our Health and Safety Lawyers look at and comment on a recent case where a company Director was fined for exposing his workers to ‘fall from height’ risks.

 BACKGROUND TO THIS REGULATORY COMPLIANCE DISPUTE

Sasie Limited, a solar panel installation company and its sole Director, Mr Een Marsden Kelly, have been fined for failing to manage and control fall from height risks.

Following a site visit by a HSE Inspector, the issue of there being two workers on a roof without any form of fall protection was made, with a prohibition notice served in relation to the same. When the HSE Inspector returned to the site three days later there was further unsafe work being carried out on the roof.

An investigation by HSE found that the unsafe work was allowed to continue by the Director, Mr Kelly despite a member of public bringing it to his attention and the serving of the prohibition notice. Clearly a case of a failure of the Director to comply with his duties.

THE CONSEQUENCES – A HEAVY FINE

Sasie Limited of Waterway Street, Nottingham pleaded guilty in the Magistrates Court to breaching Sections 2(1) and Sections 33(1)(g) of the Health and Safety at Work etc Act 1974 and also Regulation 6(3) of the Work at Height Regulations 2005. The company was fined £10,000.00 and ordered to pay costs of £6,300.

The Director, Mr Een Marsden Kelly of Waterway Street, Nottingham, pleaded guilty to breaching two counts of Section 37(1) of the Health and Safety at Work etc Act 1974 and was fined £500.

HSE COMMENT

Speaking after the hearing HSE Inspector Dominic Goacher said:

“Falls from heights are the one of the biggest causes of workplace fatalities and major injuries.

 All work at height must be properly planned irrespective of the task being undertaken and those in control must ensure suitable control measures to prevent falls are in place throughout the duration of the project.”

COMMENTS FROM OUR REGULATORY COMPLIANCE SOLICITORS

Had Mr Kelly taken the time to consider the risks of his inactions, he could have avoided the Criminal law sanctions imposed on the company and on him personally by the HSE for his lack of regulatory compliance. The adverse publicity and damage to reputation caused by the case could easily have been avoided.

This case is a reminder that regulatory compliance with Health and Safety Legislation is a statutory requirement for Directors personally and that a failure to observe such duties can result in fines and in serious cases, much worse, including imprisonment for the Director. Every worker has the right to work in a safe environment, and this case shows just how seriously the authorities take non-compliance.

As Solicitors specialising in the area of regulatory compliance issues, we are well used to dealing with the tactics and strategy of defending such cases, to the best advantage of the company and its Directors.

WORKING WITH YOUR INSURER

We are also experienced in working with the insurers for the Director and/or the company in such cases.

CONTACT US FOR HELP AND ADVICE REGARDING THE DUTIES OF DIRECTORS IN REGULATORY COMPLIANCE DISPUTES

If you have any questions regarding your duties as a company Director under Health and Safety legislation or more generally, and the effect of non-compliance in any case, contact us or call us on 0121 200 7040 for a FREE, no obligation initial chat.

Health and Safety and the Duties of Directors

Health and Safety and the Duties of Directors

Company Fines and Director Sentenced After Carrying Out Unregistered Gas Work

The Duties of Directors are many and varied, and none are more important than those which relate to complying with Health and Safety Regulations. This article looks at a case where the company involved was fined £6,000, whilst the director (and his son) received community service sentences, with curfews, for carrying out unregistered gas work, and, therefore not complying with his duties as a director.

The Background to This Case

Mr Nigel Murray (‘the Director’) of N Murray and Sons Ltd (‘the Company’) has been fined and sentenced after conducting gas work at a domestic property in Mount Pleasant, Maldon without being gas safe registered.

The Company had been contracted in May 2014 to install two boilers at two domestic properties in Essex. Following the boilers being fitted, complaints had been made to the Gas Safe Register.

Gas Safe Register inspectors subsequently confirmed that the gas appliances installed by an employee of the Company were considered to be “at risk” and required immediate work to ensure the safety of the occupiers of the properties.

An investigation by the Health and Safety Executive (HSE) found that the Director of the Company had sub contracted gas installation work to his son who he knew was not Gas Safe Registered. It was also found that he was aware that Grant Murray (son of the Director) was not competent or gas safe registered but allowed the work to be completed.

The Consequences of Failing to Adhere to the Duties of Directors

The Company pleaded guilty to breaching two charges of Regulation 3 (2) of the Gas Safety (Installation and Use) Regulations 1998.

The company has been fined £6000.

  • Nigel Murray, the Director, pleaded guilty to breaching two charges of Section 37 of the Health and Safety at Work etc Act 1974 and has been sentenced to a six-month community order and a 7pm – 5am curfew for four months.
  • Grant Murray pleaded guilty to breaching two charges of Regulation 3 (1) of the Gas Safety (Installation and Use) Regulations 1998 and he has been sentenced to a 12-month community order and a 7pm – 5am curfew for six months.

Comment From the Health and Safety Executive

Speaking after the hearing ,HSE inspector Edward Crick said:

“Gas Safe Registered engineers are regulated and have to ensure they can prove they are competent. This safe guard is removed when people choose not to register which is highlighted in this case, where the individual placed people at risk of harm in their homes.

“It is important that anybody who has gas work carried out checks their engineer is carrying a valid gas safe registered identification card. They should also check online or call Gas Safe Register to confirm they are competent to carry out the work.”

Our Comment on this Duties of Directors Case

Had Mr Murray taken the time to consider the capabilities of his son, he could have avoided the sanctions imposed on him by the HSE.

The case is a reminder that compliance with Health and Safety Legislation is a statutory requirement for Directors and that a failure to observe such duties can result in fines and community orders – prison sentences are also possible for the most serious cases – for a defaulting Director. Every worker has the right to work in a safe environment, and this case shows just how seriously the authorities take non-compliance when it comes to Health and Safety and the Duties of Directors

It is also a salutary reminder of the criminal law enforcement action the HSE will take against Directors if there is a failure to comply and that Company Directors will be pursued personally in respect of Health and Safety breaches.

As solicitors specialising in the area of regulatory compliance, we are well used to dealing with the tactics and strategy of defending such cases, to the best advantage of the Company and its Directors. We are also experienced in working with the insurers for the Director and/or the Company in such cases.

Contact us for Help and Advice Regarding the Duties of Directors

If you have any questions regarding your duties as a Company Director under Health and Safety legislation or more generally, and the effect of non-compliance in any case, please contact us or call us today on 0121 200 7040 for a FREE, no obligation initial chat.