Are you ready for the new health and safety Sentencing Guidelines?Print publication
The Sentencing Council‘s new Sentencing Guidelines for “Health and safety offences, corporate manslaughter and food safety and hygiene offences” (the Guidelines) came into effect on 1 February 2016. The Guidelines will apply to any case sentenced on or after 1 February, regardless of when the offence occurred.
The Guidelines are likely to result in considerably higher penalties for businesses, particularly larger businesses, which are found guilty of a health and safety or food safety offence.
It has long been recognised that until now fines in health and safety cases have been difficult to quantify and generally too lenient. Previously there was no formal guidance for a sentencing court in a health and safety case which has not resulted in a fatality. Such a position is difficult to reconcile with the fact that health and safety offences do not need any harm to have actually occurred, rather the creation of, or failure to prevent a known risk, is sufficient. The Guidelines will therefore help with a more consistent approach to sentencing and will ensure that fines will be sufficiently substantial to have a “real economic impact” on the offending organisation.
In determining the appropriate level of fine, the Guidelines introduce a nine step approach to sentencing. The first step is to consider the gravity of the offence (taking into consideration the harm risked and the likelihood of it arising) as well as the culpability of the organisation concerned. Once the harm and culpability of the offender have been categorised, the court will look at the financial circumstances of the offender in order to determine the appropriate range of sentences and starting points for fines. The offenders are categorised based on turnover as follows:
- Large organisation – turnover of more than £50 million
- Medium-sized organisation – turnover of between £10 million and £50 million
- Small organisation – turnover of between £2 million and £10 million
- Micro organisation – turnover of up to £ 2 million.
By linking fines to turnover, the size of fines is likely to increase significantly compared to the average level a couple of years ago. For example, the starting point for large organisations committing the most serious offence, with very high culpability is £4 million with the potential for a fine of up to £10 million. The starting point for the highest category offences for medium-sized, small and micro-organisations is £1.6 million, £450,000 and £250,000 respectively. These starting points eclipse, by some margin, the level of fines ordered in most of the corporate manslaughter convictions to date. The starting point for the larger organisations is also higher than some of the biggest and most serious health and safety cases (with multiple fatalities) sentenced to date such as the Hatfield and Potters Bar train crashes (£3.5 million and £3 million for Network Rail) as well as the Buncefield explosion (£3 million for Total UK).
For the more serious offence of corporate manslaughter, the suggested starting point for large organisations is £7.5 million with scope for fines of up to £20 million. For breaches of food safety and hygiene regulations the starting point for large organisations for “very high culpability” offences is £1.2 million with scope for fines of up to £3 million.
Although it is not stated in the Guidelines, the court may examine the group relationship when assessing turnover. In cases where the board of a subsidiary company simply does what the parent company tells it, it could be argued that the economic reality is that the parent and the subsidiary are part of the same “organisation” and, as such, their turnover could be aggregated for sentencing purposes.
Provision is also made for “very large” organisations namely those with a turnover of well in excess of £50 million. The Guidelines state that, in these cases, it may be necessary to move outside of the stated ranges but do not give any guidance as to how this will work in practice. However, the courts are now recognising that fines in the hundreds of millions may, in some cases be appropriate, in order to bring home to corporate offenders and those who run them, the need for proper compliance.
Once the appropriate band has been established to determine the range of fine, the court will:
- consider any aggravating or mitigating features
- ensure that the fine is proportionate to the means of the offender
- consider other relevant factors, such as the impact of the fine on staff, customers and the local economy
- give credit for an early guilty plea, if applicable.
Individual company directors who are found guilty of “consent, connivance or neglect” in relation to a corporate offence will face potentially unlimited fines and terms of imprisonment of up to two years. Under the Guidelines individual culpability is split into different categories – in this case “low”, “medium”, “high” and “very high” – and harm is also split into four categories. The sentence will be imposed by reference to the relevant brackets. For an offence which has a “low” level of culpability but where the level of harm is in the highest category, a maximum term of imprisonment of 26 weeks is possible. Even if the harm category is in the lowest bracket, a custodial sentence may be the starting point depending on the level of culpability. There is now a much greater likelihood of custodial sentences than we see at present and for longer terms.
We have already been seeing much larger fines for health and safety offences, possibly in readiness for the Guidelines. In January 2016 (before the implementation of the Guidelines) a fine of £1.8 million was imposed on port operator C.RO Port London Ltd following a guilty plea to safety offences which led to a worker suffering serious injury while mooring an ocean-going vessel. The Health and Safety Executive (HSE) found that the incident was totally foreseeable and could easily have resulted in a fatality. Other recent substantial fines imposed for health and safety offences include, one of £1 million imposed on Balfour Beatty Civil Engineering Ltd, following the death of a worker caused by a lorry-mounted crane slipping and hitting the victim on the head. The HSE explained the accident could easily have been avoided by using the right equipment in the correct fashion. In another case, UK Power Networks (Operations) Ltd (UKPN) was fined £1 million after a runner was fatally electrocuted by a low-hanging high voltage cable. The HSE found that UKPN had failed to fully assess the risk posed to the members of the public and had failed to manage the risk despite members of the public having notified it that the cable was hanging at a dangerously low level after slipping from its original height.
As if to demonstrate the impact of the Guidelines, earlier this week ConocoPhillips (UK) Limited was fined £3 million for two uncontrolled and one controlled but expected gas releases on an offshore platform approximately 70 miles from the Lincolnshire coast. The hefty fine was imposed despite a lack of harm to any workers.
These cases are a timely reminder of the financial consequences that can flow from a failure to ensure adequate health and safety procedures – to say nothing of the immeasurable damage to the reputation of an organisation and the potentially catastrophic human consequences.
Organisations should immediately (unless they have already done so) risk-assess and review existing systems and procedures to ensure health and safety compliance and ensure all staff are appropriately trained and supervised. It is also vital that organisations ensure appropriate contemporaneous records are kept and are easily accessible if required. In the corporate group context, serious consideration should be given to how health and safety compliance is tackled at the subsidiary level as well as at the parent company level.
How we can help
The Walker Morris Regulatory and Compliance team offers a complete range of health and safety services, including delivering training, drafting health and safety policies, carrying out audits and, if the worst does happen, we can help you manage the consequences of an incident, accident or subsequent prosecution. The importance of properly managing a serious incident and subsequent investigation can be the difference between an acquittal and a multi-million pound fine.