The Sentencing Council’s three-month consultation on new sentencing guidelines for health and safety offences, corporate manslaughter and food safety and hygiene offences has now closed. Proposals for the new guidelines were published on 13 November 2014 and the three-month consultation to collect the views of health and safety professionals closed last month.

The guidelines were introduced according to the council due to a lack of comprehensive guidance for sentences in relation to the particular offences detailed i.e. corporate manslaughter and food and hygiene offences. While there is a guideline covering corporate manslaughter and fatal health and safety offences, up until now there has been no specific guidance on sentencing food safety offences or non-fatal health and safety offences. Existing guidance only covers offences committed by organisations rather than individuals. This marks the first time that guidelines will cover all the most commonly sentenced health and safety offences and food safety offences.

The Council took the view that there was a need for expanded guidance on dealing with difficult issues that arise in cases, such as those relating to the risk of harm, identifying appropriate fine levels for organisations, or fining offenders that are charitable or public bodies. There was also concern that some sentences imposed for these offences have been too low in the past.

Following an analysis of current sentencing practice, the Council is therefore proposing to increase sentence levels in such situations. This will ensure sentences that are proportionate to the seriousness of the offence while, as required by law, taking account of the financial circumstances of the offender. It is proposed that an offending organisation’s means will initially be based on its turnover as this is a clear indicator that can be easily assessed and is less susceptible to manipulation than other accounting methods. However, the guidelines also requires the court to consider the organisation’s wider financial circumstances to ensure that fines can be properly and fairly assessed.

Proposed Guidelines

The Council considered that the offence must remove any economic gain derived from the offence to ensure that it is not cheaper to offend again than take the necessary precautions. In relation to organisations, the Council has adopted within the guidelines the established principle that the fine should be sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with legislation and achieve a safe environment for workers and members of the public.

Sentencing guidelines propose following the following stepped approach

Step 1 – Determine the offence category. Consider harm & culpability factors to determine the seriousness of the offence.

Step 2 – Starting point and category range. At step two, the court will use guidance on obtaining financial information from the offender to identify whether the size of the organisation is micro, small, medium, large or very large. The categorisations are based on bands of turnover. Having determined the offence category at step one and the size of the offending organisation at the start of step two, the sentence will identify a starting point and range in the sentencing tables. The guidelines emphasize that the turnover is used to reach a starting point and that the court may need to consider wider financial information relating to the offender at the next step.

The court will then consider aggravating and mitigating factors to make adjustments from the starting point.

Step 3 – Check whether the proposed fine based on turnover is proportionate to the means of the offender. Step three provides flexibility for the sentence to adjust the fine to the offender’s particular circumstances.

Step 4. Consider other factors that may warrant adjustment of the proposed fine. Step four is concerned with any wider impacts the proposed fine may have, for example, on innocent third parties such as employees or service users. The court should adjust the fine if necessary to avoid any unjustifiable wider consequences.

Steps five to nine are standard steps in Sentencing Council guidelines, including factors such as reduction for guilty pleas and consideration of totality if sentencing an offender for more than one offence.

Step seven of the guidelines for organisations relates to consideration of compensation and ancillary orders, with guidance given on orders available for the specific offences in question.

There are four broad categories of organisation defined in the guidelines:

  • Micro organisation: Turnover or equivalent: not more than £2 million.
  • Small organisation: Turnover or equivalent: between £2 million and £10 million.
  • Medium organisation: Turnover or equivalent: between £10 million and £50 million.
  • Large organisation: Turnover or equivalent: £50 million and over.

In addition, the guidelines state that when sentencing “very large” organisations – defined as those whose turnover very greatly exceeds the threshold for large organisations – it may be appropriate to move outside the range to achieve a proportionate sentence.

Of course the guidelines go into much greater detail, including providing example scenarios of health and safety incidents, which may lead to prosecution and how these may be interpreted.

The level of fines are intended to be of a level to have a ‘real economic impact’, so there is widespread agreement that levels of fines will probably increase substantially for such offences including those prosecuted under the Health and Safety at Work Act sections 2 and 3.

The guidance provides very specific guidance on levels of fines. For example with regard to Corporate Manslaughter the fines are suggested as shown in figure 1 below.

Proposed starting points and ranges of Fines For Corporate Manslaughter Convictions
Large – Turnover more than £50 million
Offence category Starting point Category range
A (more serious offence) £7,500,000 £4,800,000 – £20,000,000
B £5,000,000 £3,000,000 – £12,500,000
Medium – Turnover £10 – £50 Million
Offence category Starting point Category range
A (more serious offence) £3,000,000 £1,800,000 – £7,500,000
B £2,000,000 £1,200,000 – £5,000,000
Small – Turnover £2 – £10 Million
Offence category Starting point Category range
A (more serious offence) £800,000 £540,000 – £2,800,000
B £540,000 £350,000 – £2,000,000
Micro – Turnover up to £2 Million
Offence category Starting point Category range
A (more serious offence) £450,000 £270,000 – £800,000
B £300,000 £180,000- £540,000

 

Aggravating & mitigating factors

The council has suggested a number of aggravating and mitigating circumstances the courts can take into account that may influence the sentencing, either increasing fines or reducing.

These include the following;

Aggravating factors increasing seriousness:

Cost-cutting at the expense of safety

  • Deliberate concealment of illegal nature of activity
  • Breach of any court order
  • Obstruction of justice
  • Poor health and safety record
  • Falsification of documentation or licenses
  • Deliberate failure to obtain or comply with relevant licenses in order to avoid scrutiny by authorities
  • Offender exploited vulnerable victims
  • Previous convictions

Factors reducing seriousness or reflecting personal mitigation

  • No previous convictions/recent convictions
  • Evidence of steps taken to remedy problem
  • High level of cooperation with the investigation, beyond that which will always be expected
  • Good health and safety record
  • Effective health and safety procedures in place
  • Self-reporting, co-operation and acceptance of responsibility
  • Other events beyond the responsibility of the offender contributed to the death (however actions of victims are unlikely to be considered contributory events. Offenders are required to protect workers or others who are neglectful of their own safety in a way that should be anticipated)

Thus it seems that the courts are being encouraged to ensure that fines are sufficiently substantial to have a ‘real economic impact’, which will bring home to shareholders and management the need to achieve a safe working environment.

What impact will these guidelines have?

It seems inevitable that fines related to these offences, particularly on large companies, are bound to rise significantly with larger firms organizations receiving fines that would have been regarded as unthinkable previously. It may also lead to a scrutiny of accounts, including where a group structure is adopted, is almost certain to increase. It is suggested, that the proposed reform on sentencing for health and safety offences will have a far greater impact on organisations than the corporate manslaughter reform seven years ago had and that one possible consequence of the reform may be to see firms being more easily prosecuted under straightforward HASAWA offences with much larger fines than there have been as opposed to following the more complicated Corporate Manslaughter prosecution.

It is interesting that the guidelines specifically fail to recognise that a victim’s conduct can be a contributory factor in fatality occurrence in health and safety offences. Thus whilst in any civil case contributory negligence is a significant factor it would appear that under safety legislation it is not!

Fines will be linked to company turnover, which could result in a three or fourfold increase in fines. The guidelines also refer explicitly to the need for the sentencing court, albeit exceptionally, to take account of the turnover of a linked organisation which is not a defendant. This will mean that the means of a parent company may be examined to determine the size category of the organisation being sentenced.

The final guidelines are anticipated in late 2015 – early 2016. Duty holders are well advised to consider increasing the profile of health and safety risk in their corporate risk registers and ensuring that safety management systems are robust.

Perhaps an audit of your safety management system is a good idea? Call the Cardinus Consultancy team on 020 7469 0200 or email info@cardinus.com

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