Regulatory Problems and Director Disqualification

Imprisonment and 7 year Director Disqualification for Safety Failings

The Health and Safety Executive (“HSE”) has issued a press release in respect of its investigation into the conduct of Mr David Gordon Stead (‘Mr Stead’) as director of a construction company. Mr Stead received a 32 week prison sentence and director disqualification for seven years – a severe punishment for a serious failure in terms of carrying out his duties as a director. This article looks at the case and comments that failure to comply with Health and Safety legislation will lead to severe penalties.

The Background to this Regulatory and Director Disqualification Case

Mr Stead was subject to an investigation by the HSE following a report of his conduct by a third party. Investigations found that Mr Stead had instructed a worker to stand on top of a skip to dispense flammable thinners onto burning waste, in order to help it burn. The thinners ignited, causing the worker to be blown from the skip and suffer substantial burns to his arms and legs.

The HSE found that Mr Stead did not ensure that the burning of the waste was carried out in a safe or appropriate manner. He had failed to administer any first aid and did not send the worker to hospital, which the HSE deemed the most appropriate response given the severity of the injuries. There was also a failure by Mr Stead to inform the HSE of the incident, which is a legal requirement under Section 4(1) of The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (“RIDDOR”).

Mr Stead pleaded guilty to breaching Section 37 of the Health and Safety at Work Act 1974 as well as pleading guilty to breaching section 4(1) RIDDOR. Section 37 states that:

Where an offence… committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any director… or other similar officer… or a person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

 As a result, Mr Stead has been sentenced to 32 weeks’ imprisonment, half of which is on release under licence. He has also received a director disqualification period of 7 years.

This is What the Health and Safety Executive said

Adele Davies HSE Inspector stated that:

“David Stead failed his employees. His actions could have resulted in the death of this worker. The young man suffered unnecessary life threatening injuries due to poor working standards.”

 “We hope this sentence sends out a message that directors of businesses must take their health and safety responsibilities seriously.”

Our Comment on this Director Disqualification Case

We often comment on director disqualification cases where insolvency is at the core. Indeed director disqualification is most common where HMRC Debt is involved. This case shows that health and safety compliance is also a major part of the duties of directors, and that lack of compliance can lead to disqualification.

The legislation makes the Directors (and conceivably the site foreman and site managers) personally responsible for breaches of the legislation. Had Mr Stead complied with his duties, under Section 37 and Section 4(1) respectively, he would have avoided the loss of his liberty and the reputational and financial damage caused by the criminal conviction. The case is a reminder that compliance with Health and Safety legislation is a necessity for good working practice and that a failure to comply will result in severe action by the HSE, against the director personally.

Contact us for Advice on Director Disqualification and Regulatory Problems

We, here at Neil Davies and Partners, 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 willing and able to work with the Company’s insurers in the funding of such cases.

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

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