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The True Cost of Reputational Damage

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The True Cost of Reputational Damage INTERNATIONAL INSTITUTE OF RISK AND SAFETY MANAGEMENT Issue 11/2016 Visit our website at www.iirsm.org The true cost of reputational damage If your company appeared in court As well as the dramatic increase in the recover. It is unlikely that 31 separate deaths tomorrow and was hit with a multi- levels of fines – which incidentally are more would have prompted the same response. million pound fine, could it survive? likely to make the headlines – Section 10 of Last year a Deloitte Touche Tohmatsu Even if it had the means to pay, the Corporate Manslaughter and Corporate survey revealed that only 19% of senior the reputational damage it would Homicide Act allows the courts to impose executives would say their companies suffer would almost certainly have a publicity orders on convicted firms to attract deserve an “A” for their ability to protect detrimental effect on business. additional adverse publicity and potentially against and respond to reputation risks, Since the revised Sentencing Guidelines damage its reputation. Previous notices have while 39% said the maturity of their risk came into force earlier this year, big either appeared in local newspapers or, in strategy was average or below average. businesses have been hit with huge penalties the case of joinery firm Peter Mawson, on its In today’s global, fast-moving social thanks to their turnover. The pages of this website. Mobile Sweepers (Reading), which media landscape, reputational issues can issue alone document Tesco’s £500,000 fine was convicted of corporate manslaughter in spread and amplify extremely quickly. Often after a worker suffered bruises following a February 2014, was required to take out ads it will come down to the speed at which fall, Network Rail’s £4 million penalty after a in two local newspapers. issues are identified and how they are pensioner was killed on a level crossing, and But it’s not just killing workers that subsequently handled. Merlin’s £5 million fine following the Alton attracts bad publicity. After the King’s Cross Does your organisation have a strategy to Towers rollercoaster crash – the biggest fire in 1987, travel on London Underground protect its reputation? Perhaps it’s time you penalty to date for a non fatal incident. dropped by 6% and took two years to addressed this emerging risk. INSIDE THIS ISSUE Rooftop fall costs Cyber security: Robot protects Case study: how 03 supermarket giant 06 guides, research and 09 workers in 10 Mobile Mini drove £500,000 white papers hazardous oil fields down accidents News Prosecutions News Prosecutions SAFE SYSTEMS OF WORK MENTAL HEALTH WORK AT HEIGHT Alton Towers operator fined Survey reveals Tesco in court £5m over ride collision scale of problem after worker More than three-quarters of employees have experienced poor plummeted 30ft mental health, and almost half of workers would not talk to their through skylight manager about a mental health issue, according to a new report. Supermarket giant Tesco has been fined Released to coincide with World £500,000 after a maintenance worker fell Mental Health Day on 10 October, through a skylight onto the shop floor. the Business in the Community (BITC) On 13 June 2014, Andrew Burgess was charity uncovered that while employers part of a team carrying out repairs to are talking more about mental health, the roof and gutters of the Express store words are not translating into action. in Liscard Village, Wallesey, when the More than 20,000 participants took incident happened. He fell 30 feet and © Google Maps part in a YouGov panel survey (3,036 suffered cuts, bruises and muscle damage. Judge Steven Everett said it was ‘a minor miracle’ Burgess had not been killed or seriously injured respondents) and a public open survey Customers in the store accompanied him (16,246 respondents). to a local NHS walk-in centre. ❝❝“I am shocked at a company 10 of the Construction (Design and According to the study, 62% had Tesco Maintenance and Tesco Stores the size of Tesco failing to Management) Regulations 2007. It was © Damien Mcfadden / Associated Newspapers/REX/Shutterstock© Damien Mcfadden / experienced physical, psychological or were prosecuted by the HSE following fined £200,000 plus costs. Victims’ solicitor Paul Paxton said “money alone will never replace limbs” behavioural symptoms of poor mental an investigation that found no risk take even basic precautions Tesco Maintenance pleaded guilty to health where work issues played a part, assessment or method statement had to prevent injury to its breaching Regulation 9 of the Work at The owner of Alton Towers has been fined the UK’s biggest theme park, he added. and 24% had experienced symptoms in been produced before carrying out the employees and further, to Height Regulations and Sections 2(1) and a record £5 million for the “catastrophic” The organisation originally said the the last month alone. work. 3(1) of the Health and Safety at Work Act. rollercoaster crash last year that left five accident was caused by “human error.” But Three in four line managers (76%) Liverpool Crown Court heard that as risk injury to the public.” It was ordered to pay £300,000 plus costs. passengers with life-changing injuries and prosecutors argued the fault was with the believe that employee wellbeing is the shop has a false ceiling, the skylights Speaking after the hearing, HSE others seriously hurt. employer, not individuals. their responsibility, yet only 22% had had been painted white along with the before he could complete the task Burgess Inspector Chris Hatton said: “I am shocked The judge, Michael Chambers QC, said The court had heard how engineers received some form of training on rest of the roof, but the skylights were not fell through one of them. at a company the size of Tesco failing to Merlin Attractions Operations’ safety failed to notice a carriage that had stopped mental health at work. marked as fragile. Tesco Stores pleaded guilty to take even basic precautions to prevent procedures were “woefully inadequate” midway round the 14-loop ride. “Our findings show that we need A colleague began marking around the breaching Section 3(1) of the Health injury to its employees and further, to risk and a “shambles” in scathing criticism over They assumed there was a problem more openness, more training and skylights with yellow warning paint, but and Safety at Work Act and Regulation injury to the public.” the Smiler crash on 2 June 2015. with the computer and overrode the stop information, and more support for He added: “This was a needless and mechanism setting another train in motion employees and managers,” said Louise avoidable accident in which those injured and into the empty carriage. Aston, Wellbeing Director at BITC. “This WORKPLACE TRANSPORT were fortunate not to have been killed or Bernard Thorogood, prosecuting, said is why we are asking employers to take InBrief to have bled to death.” workers had not been given a system to three steps – talk, train and take action. The two-day sentencing at Stafford follow which would safely deal with the “Progress will only happen when Housebuilder fined £800k over segregation failings MoD receives Crown Censure Crown Court heard how the crash was like issue. He said engineers had not read or employers approach mental ill health The Ministry of Defence (MoD) has a 90mph car accident, and that the victims seen the ride’s operating instructions. as they would physical ill health – doing ● CDM failing lands Crest Nicholson in court and the skin on his left arm and leg was been issued with a Crown Censure by waited nearly an hour in mid-air before Since the crash, a number of safety what they can to prevent ill health ● Housebuilder did not monitor whether removed. the HSE for the second time this year paramedics were able to access the £18 changes have been made, including occurring or escalating, and ensuring segregation was effective He fractured his left hip, all the fingers over the death of a fusilier. million ride. improved access and a policy of closing proper support for employees when it on his right hand were broken and his left On 14 September 2011, 21-year-old Chambers said Vicky Balch and Leah the ride when winds exceed 34mph. happens.” Developer Crest Nicholson has been leg is now permanently shorter than his Dean Griffiths was lined up against the Washington, who each lost a leg, were prosecuted after a site supervisor right by 20mm. wooden wall of a compound at Lydd fortunate not to have bled to death in the was struck by an HGV at a site in Crest Nicholson, which ran the Ranges military firing range in Kent. For CCTV footage of the crash, visit Less than a quarter of line four to five hours they were trapped on the www.healthandsafetyatwork.com/ 22% Wokingham, Berkshire. project, was accused of failing to plan Two colleagues entered the compound, Smiler. On that day Alton Towers “fell well risk-assessment/alton-towers-merlin- managers have had training Reading Crown Court heard that and manage workplace transport followed by a safety supervisor, and short” of the safety standards expected of fine-smiler the housebuilder failed to segregate effectively by the HSE. one fired two shots at a target. pedestrians and vehicles, and failed to Prosecutors told the court the A bullet passed through the monitor whether workers stayed behind incident could have been avoided if the incorrectly placed target and hit EDITOR Registered in England and Wales This publication is intended to be a general Kellie Mundell Charity No 1107666 guide and cannot be a substitute for roadside pedestrian barriers.
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