Our Strategic Advisor, Sterling Crew, on the escalating cost of non-compliance. He outlines a practical approach to the legal defence of due diligence.
The cost of failing to comply with six-figure fines
Food safety issues are never far from media headlines, along with consumer and regulatory scrutiny. Last year saw no respite in the number of food business operators being prosecuted. Following the introduction of the new Court Sentencing Guidelines for food hygiene and health & safety offences in 2016, the cost of failure has never been higher. It can have a business-critical impact on a company with eye-watering six-figure fines being regularly handed out.
It has never been more important to ensure your food business is safe and legal. If you think the cost of compliance is high, try the cost of non-compliance. Even the best of businesses can get it wrong.
What is the law and what do you need to do to comply?
The key requirements of the legislation (The Food Safety Act 1990) are that you do not include anything in food, remove anything from food or treat food in any way which means it would be damaging to the health of the people eating it.
In addition, you must ensure that all food meets consumers’ expectations in terms of nature, substance and quality and are not misleadingly presented. It must be produced in premises with safe food hygienic standards. The Act covers activities throughout the food distribution chain, from primary production through to distribution, retail and catering. Given the lift and shift policy the government is adopting to transposing EU law into U.K. legislation, little is likely to change post Brexit regardless of the nature of any deal.
Why is due diligence important?
A defence which is available to the strict liability in the Act is the one of due diligence. The Act states; “… it shall be a defence for the person in charge, to prove that he took all reasonable precautions and exercised all due diligence, to avoid the commission of the offence by himself or by a person under his control”. Food businesses do not have to establish their case beyond all reasonable doubt, they need only persuade the court that they exercised due diligence on the balance of probabilities.
Minimise risk of prosecution – put a system in place
We may well see the number of prosecutions rise in the coming year, as budget cuts to local authorities could lead to less resource being allocated to supporting food businesses, helping to improve standards. As an alternative, local authorities may take the decision to prosecute and enforce closure to protect consumers. It therefore makes sense to have a strong due diligence system in place before any potential prosecution.
Don’t wait until you’re in a crisis to come up with a crisis plan. You need to be aware that even the most proactive risk management and mitigation processes, will not guarantee avoiding a breach of the Act. An effective due diligence approach will, however, minimise the risk of a prosecution, as well as playing a part in helping to deliver safe, legally compliant food.
Good compliance control systems can help avoid problems, as regulators may well decide that legal action is inappropriate, if they are convinced that all reasonable precautions were taken, and all due diligence was exercised.
Unlimited fines and complexity
The new Sentencing Guidelines dictate that fines reflect the business turnover. The final penalty can also go up, or down, depending on mitigating or aggravating factors. Essentially, it is important to have a robust due diligence defence demonstrating strong extenuating factors to avoid any increase in fines.
For instance, fines can be very high for a deliberate breach or flagrant disregard for the law, but lower if significant efforts were made to secure food safety. The Food Safety Act 1990 provides for unlimited fines, with up to two years imprisonment for the most serious offences. This has been illustrated by recent prosecutions of restaurant owners jailed for offences relating to allergenic deaths, and retailers fined over £1million as the result of rat infestations in their shops.
The greater cost can be reputational damage to a food business. Being found guilty in the court of public opinion can be expensive. No matter how big or small a business, it can be catastrophic if your customers lose confidence.
By failing to prepare, you are preparing to fail
In my 35 years’ experience in Food Safety, successfully prosecuted business owners either lacked the knowledge to identify the risks, or they simply did not give any consideration to the dangers they might be subjecting their customers to.
Rarely did they commit the offences with criminal intent, they were simply not prepared and had an unsafe food safety culture. They believed they were doing the right thing, or had something more pressing to attend to at the time. Prosecutions happened to other people.
Please bear in mind if you are ever tempted to think the cost of compliance is high, remember the business-critical cost of non-compliance.
We help businesses of all sizes ensure they achieve compliance, offering the complete digital solution to improve standards and support due diligence defence. Get your demo today and see why over 60,000 users choose DRI to manage their risk effectively.