What if the inspector calls…
Agricultural and rural businesses have challenges unlike many other sectors: they have to operate lawfully on many different regulatory fronts.
In every one, they have to be compliant or face the consequences of enforcement action by authorities, from the Environment Agency, Health & Safety Executive, local councils or numerous others such as HMRC. This can include significant fines imposed against businesses or even custody where owners and managers are convicted personally.
Penalties imposed on businesses in criminal courts are based on the level of negligence, actual or potential harm risked, and, crucially, business turnover. Courts are not normally permitted to stray outside fixed guidelines meaning that huge financial penalties can be issued as well as hefty prosecution costs. Any benefit of economic activity gained whilst operating unlawfully may be confiscated – this is not restricted to profit but is turnover and any other costs that have been avoided such as the costs of applying for permits.
Where businesses come to the attention of those authorities this may be the result of a specific incident, such as a polluted watercourse, accidental discharge or accidents involving agricultural machinery, falls from height, overhead pylons or vehicle strikes). Or, a compliance breach such as a failure to be properly licenced. The absence of an environmental permit or exemption for waste activities is just one such example.
So, what to do…?
Whatever the case its ultimate outcome may depend very much on how the business handled itself when being investigated. Mistakes can be costly and in the worst cases lead to unnecessary or even wrong convictions.
As soon as any incident occurs placing the business (and its owners) under potential or actual investigation there should be immediate action. It is vitally important that specialised legal advice be taken right at the outset. This ensures correct decision-making and formulating a strategic policy for the case as a whole that may have various phases and be lengthy. It is entirely normal for some cases to take two or three years – but good decisions at the start will pay dividends.
Of course, there may be a temptation only to engage legal help if things get sticky or complicated – but that may be an entirely false economy and the lawyers may pick up the case only when it is too late after easily avoidable errors. In any event, your business or director’s insurance may provide legal cover.
The next stage involves the enforcement agency requesting gathering evidence under its statutory powers. This may involve a formal letter setting out what needs to be provided and/or a visit to the business by the agency. In some cases, a failure to provide documents and information is an offence of itself. So, another area where legal advice will assist.
A very significant event that is pivotal for the future of any case – and where things tend to go wrong – is where the business is invited to be formally interviewed under caution. This is not the giving of a witness statement but the business, as well as its owners and directors, being formally questioned to establish if any offences have been committed and if so by whom. It is vital to know precisely what is said, has been done unlawfully and the evidence upon which this is based. It is also essential to understand the law and have this explained.
The temptation may be to say ‘we have nothing to hide’ and that may indeed be the case. But, failures to provide sufficient information at this stage or providing the wrong information may have consequences. It is also vital to evaluate how to respond to the request: it’s often appropriate to provide a written statement to the enforcement agency that can be carefully prepared in advance, outside the stressful environment of a formal interview, where things may be forgotten or handled poorly with detrimental consequences.
So, if a problem arises, as can happen in any business – sometimes despite good and normally compliant operations – seek early advice!
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