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Health and safety fines - Stumpmaster v WorkSafe New Zealand [2018] NZHC 2020

By Carl Brandt - October 2018

Since the passing of the Health and Safety at Work Act 2015 (“HSWA”), there has been some confusion as to how the Court should approach health and safety sentencing.  After a number of inconsistent decisions in the District Court, Stumpmaster v WorkSafe New Zealand has provided helpful clarification, maintaining the existing model for fines under the previous legislation and Department of Labour v Hanham & Philp Contractors Ltd , and clarifying the extent of discounts applied to fines for mitigating factors.

The case will be of particular interest to clients operating in industries such as forestry, construction and mining where higher-risk activities are often undertaken.

Approach to sentencing

The Court set out four steps to sentencing under the HSWA: 

  • Assess the amount of reparation to be paid to any victim;
  • Fix the amount of the fine by reference to culpability bands, and then adjust that amount for any aggravating and mitigating factors;
  • Determine whether any further orders available under the HSWA are required (such as orders for the payment of WorkSafe's costs, adverse publicity orders, training orders, restoration orders or project orders); and
  • Make an overall assessment of the proportionality and appropriateness of the total imposition of reparation and fine on the defendant, including consideration of the defendant’s financial capacity.

Fines

The previous District Court decisions had differed in the number of culpability bands used to identify a starting point for a fine.  The appellants in Stumpmaster criticised the District Court decisions as being excessive and lacking principle in their approach.  The High Court retained similar proportionate levels as under Hanham & Philp Contractors Ltd, but set out four new guideline bands for fixing the fine:

  • Low culpability (up to $250,000);
  • Medium culpability (between $250,000 and $600,000);
  • High culpability (between $600,000 and $1,000,000); and
  • Very high culpability ($1,000,000 plus).

Mitigating factors 

The High Court also provided further clarification as to in what circumstances large discounts should be made available.  Large discounts of 30% will only be provided in cases that exhibit all mitigating factors to a moderate degree, or one or more mitigating factors to a high degree.  Mitigating factors include payment of reparation, remorse and co-operation with WorkSafe, remedial actions, and favourable safety records. 

Conclusion

Employers should respond immediately and appropriately to any incident.  It will be important for an employer to show the extent to which it assisted the people affected by an incident.

Carl is a Solicitor in our Commercial Team and can be contacted on 07 958 7444.

For advice on Health and Safety matters please contact our Workplace Law Team.