New sentencing guidelines - details and implications
On 1 February 2016 new Sentencing Guidelines come into force in respect of health and safety, food hygiene and corporate manslaughter offences. The new guidelines, which follow an extensive consultation during 2014- 15, will serve to increase (in some cases dramatically so) the fines handed down for these offences.
Although guidelines currently exist to assist courts in the sentencing of health and safety offences and corporate manslaughter and have done since 2010 (there are no guidelines at present in respect of food hygiene offences), there has been little consistency to date between the sentences handed down, especially those relating to corporate manslaughter. For example, the current guidelines suggest that the appropriate fine following a corporate manslaughter conviction will, “seldom be less than £500,000.” The reality however is that of the convictions for this offence to date, only one fine has exceeded this starting point, with the rest falling far short.
The current recommended starting fine for other health and safety offences causing death (but falling short of corporate manslaughter) is £100,000, with other non-fatal health and safety failings facing lesser fines.
By contrast, rather than suggesting a blanket starting figure regardless of the size of the corporate defendant, the new guidelines suggest fines which are based on a defendant’s turnover. In addition, the new guidelines are a lot more prescriptive and require courts to take into account the ‘offence category’ when sentencing - essentially the defendant’s culpability. This will require an assessment of the reasons why, and the extent to which, the offender failed to meet the required standards.
Once the level of culpability has been determined then the next stage is to determine the level of harm that has resulted (death, catastrophic injury, lesser injuries etc) as well as the likelihood of that harm occurring. The guidelines categorise harm into ‘very high,’ ‘high,’ ‘medium,’ and ‘low’ (effectively ‘deliberate,’ ‘reckless,’ ‘negligent’ and ‘low/ strict liability.’)
Following these considerations, courts are directed to consider the defendant’s turnover, and assign it to one of the following categories:
- Micro (turnover up to £2m);
- Small (turnover up to £10m);
- Medium (turnover up to £50m); and
- Large (turnover over £50m).
There is an additional category for ‘very large’ organisations, where turnover may be in the hundreds or thousands of millions of pounds.
These calculations result in a fine bracket, with courts then being invited to assess whether there are any other aggravating or mitigating features which may warrant adjustment of the proposed fine either towards the upper or lower end of the suggested bracket.
For example, take a company with a turnover of between £10-50 million that is convicted or pleads guilty to health and safety failings which have resulted in a fatality. Under the current guidelines the starting point for a fine would be £100,000. Under the new guidelines, the defendant would face a starting fine of £540,000 and a fine bracket of between £300,000 and £1.3million. Although arguments may be raised that such a level of fine would not be proportionate compared with the defendant’s culpability, this is the reality of sentencing from 1 February 2016.
The assessments undertaken in respect of sentencing for corporate manslaughter are slightly more straightforward. The first stage in determining sentences for this offence is to determine the seriousness of the offence. It is considered that the level of culpability and harm in corporate manslaughter cases will, by the very nature of the offence, be very high in every instance and courts are directed to consider factors affecting the seriousness of the offence. This will include consideration of issues including:
- How foreseeable was serious injury?
- How far short of the appropriate standard did the offender fall?
- How common is this kind of breach in the organisation? and
- Was there more than one death, or a high risk of further deaths?
The answers to these enquiries will indicate either a higher or lower level of culpability. Those cases at the upper end of the bracket will be categorised as offence category A, while those cases falling at the lower end of the spectrum are to be categorised as offence category B.
Once the defendant has been assigned to an offence category, then courts will look at the company’s turnover to determine (as with other health and safety offences) the sentencing bracket and suggested starting point. The categories of financial size the same for all health and safety offences, including corporate manslaughter.
A key submission, which must be stressed to courts in every case, is that turnover does not equal profit: a company that has a high turnover, may not have an equally high profit. The new guidelines base the level of punishment on the financial size of corporate defendants, but in many cases high turnover results in meagre profit. This could result in companies with a high turnover receiving fines, which are disproportionate to culpability, or harm.
To date, there has been an incentive for defendants charged with health and safety offences to consider an early indication of guilt in exchange for credit against final sentence. Going forwards however, the new guidelines may pose considerable tactical challenges for defendants, especially those with limited assets.
Defendants may be forced to defend a prosecution on the basis that even with an early indication of guilt they may be unable to meet a significant fine and may be required to enter administration. Defendants will have to decide whether to plead guilty before the Magistrates’ Court and face a potentially unlimited fine, (following removal of the cap on Magistrates sentencing powers in 2015). Or alternatively plead not guilty, sacrificing some credit for an early indication of guilt, only to subsequently enter a guilty plea once the case has been sent to the Crown Court.
There is also likely to be more ‘Newton Hearings’ (pre-sentence hearings heard by a judge sitting without a jury to determine disputed facts which are material to sentence). Newton hearings are likely to become more common features of health and safety cases, especially in relation to issues such as causation, level of culpability and categorisation of harm, as moving up or down each of these categories will have a seismic impact on the level of fine which is ultimately handed down. There may also be a requirement for expert accounting evidence to demonstrate, with reference to the defendant’s accounts, how (despite turnover figures) profit is in reality, much lower. All of these considerations will lead to an increase in the length of time it takes to resolve cases, resulting in greater expenditure.
The new guidelines are more complex in their application than the current guidelines and there will be significant financial incentives for companies to utilise health and safety consultants and to address health and safety generally, rather than find themselves subject to prosecution.
Whilst it is commendable to wish to introduce more detailed guidance in the form of a fines-matrix, there is a need to balance excessively prescriptive guidance with flexibility, to deal with individual cases on their merits, and ensure that fines imposed are consistent with the nature of the offending.