Balfour Beatty Chief Executive, Leo Quinn, has warned that health and safety penalties could bankrupt some companies.

Quinn said that the firm has taken a “prudent reserve” in case Balfour Beatty is fined under the new sentencing guidelines, as the new precedent will also apply to cases which are yet to go to court but involve incidents that pre-date the new legislation.

He believes the new measures to be “pretty large and drastic” as penalties have increased “almost tenfold.”

In May, the company was hit with a major fine of £2.6 million regarding the death of a worker on an offshore windfarm in Lancashire, while it also incurred a £1 million fine in January regarding the death of a road worker four years ago.

Quinn continued: “It’s most unusual to see that level of fine increase and it’s worrying for the industry because the definition of a large contractor is £50m turnover, this could bankrupt many small construction companies.”

His comments have come after the firm’s UK business posted a loss of £66 million in its construction services division for the first half of the year up to July 1.

In the UK, underlying revenue fell by 23% in the first half of the year to £862 million (compared with £1.12 billion last year), mainly because of a decline in the regional construction business.

Quinn said that these figures had come about because the company had reduced the number of live contracts in the regional business from 400 to 250, which gave the group “a sensible scope and span of control for the business.”

Meanwhile, he attributed the loss in the UK construction business over the period to additional losses incurred on historical contracts.

When analysing the results, Quinn said that the group had challenges around the “black art” of getting projects signed off, which he said was “not always as easy as you think it’s going to be”.