Money or safety? Which gets directors disqualified?

Directors are 300 times more likely to be disqualified for breaches of financial regulations than for breaches of health and safety law, according to research by the School of Law at Warwick University.

The research was commissioned by the Health and Safety Executive (HSE) to examine the effectiveness of the Company Directors Disqualification Act 1986 as a sanction against directors convicted of health and safety offences. The researchers concluded that the sanctions were adequate but there was a surprising failure on behalf of the HSE to use them.

The researchers could only find ten directors who had been disqualified for health and safety reasons between 1986 and 2005. This was in contrast to the hundreds of company directors disqualified by the courts each year for financial reasons.

Interviews with HSE operations directors showed a low level of awareness of the disqualification provisions within the 1986 Act.

The report which is entitled, A survey of the use and effectiveness of the Company Directors Disqualification Act 1986 as a legal sanction against directors convicted of health and safety offences, recommends that guidelines should be drawn up to inform prosecutors of when it would be appropriate to seek a disqualification order.

In response to the report, the Health and Safety Commission has issued a new set of instructions to inspectors on how to seek disqualification as a penalty for breaches of health safety rules.