New guidance for judges on health and safety fines could help save struggling construction firms from “an existential crisis”, commentators have said.
It comes as new guidance from the Sentencing Council on the level of fines to be handed to very large firms came into force on 1 June.
Previously, judges would assess the level of fines based on a firm’s turnover but under the changes courts now need to also take note of their financial circumstances.
Claire Burrows, a partner and regulatory specialist at independent law firm Brabners, told Construction News that the move will be welcomed by the industry.
“This should be a welcome development for the construction sector,” she said.
“High turnover doesn’t always equate to high margins – especially as operators continue to contend with pressures ranging from high input prices and supply chain uncertainty to the ongoing skills shortage. For many, a fine could stimulate an existential crisis.”
Reformed health and safety fines introduced in 2016 saw recommendations given to judges for how to sentence companies ranked as being either micro, small, medium, large or very large based on their turnover.
Large companies were deemed to have turnover of £50m and above but no specific figure was put on “very large” other than that they “greatly exceed” £50m.
In those cases, judges were only told to “move outside the suggested range to achieve a proportionate sentence”.
Now, the updated guidance recommends fines must be proportionate.
Kevin Bridges, regulatory expert at Pinsent Masons, said the amendments aimed to provide “greater clarity and consistency”.
“This is significant and is intended to avoid any implication that a sentencing court should start with a consideration of the sentencing ranges for large organisations,” he said.
“It was said [by the Sentancing Council] to be ‘somewhat inconceivable that these ranges could ever be applicable’”.
Burrows said the move meant large contractors will not be “overly penalised” due to their size.
“The reform will mean that fines are no longer simply determined by scale, but context as well. While deterrence remains a key principle, the aim is proportionality, meaning that the law must differentiate between deliberate non-compliance and inadvertent error,” she said.
“This matters because many large contractors already invest heavily in safety systems and personnel. Their breaches are rarely a result of negligence, but of human error or operational blind spots.
“When a business is doing the right things, such as training staff, auditing risks and embedding compliance into project design, it should not be overly penalised simply because of its size.
“However, the guidelines should reinforce the notion that understanding your risks and addressing them proactively is not just wise – it’s vital.”
Balfour Beatty chief executive Leo Quinn has previously warned that the definition of a large contractor at £50m could help “bankrupt many small construction companies”.
The number of prosecutions carried out by the Health and Safety Executive (HSE) in all industries in Britain has plummeted in recent years.
In 2008/09 it completed 1,090 prosecutions. The number fell to 711 in 2015/16 and in 2023/24 the HSE carried out only 228 prosecutions.
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Nicola Harley