Keoghs' Crime and Regulatory team provide an update on legal issues in the health and safety sector. The downloadable PDF at the end provides detailed commentary, and below is a summary of the main issues:
On 1 February 2016 new Sentencing Guidelines came into force in respect of health and safety, food hygiene and corporate manslaughter offences. The new Guidelines were designed to bring consistency to fines given by Courts, although the net effect of the Guidelines has also been to increase the fines handed down.
The new Guidelines direct that fines be based on a defendant’s turnover and are also a lot more prescriptive, requiring courts to undertake a series of enquiries to determine the nature of the offence and the level of harm occasioned (the ‘Offence Category’), before then considering financial information.
When sentencing health and safety offences falling short of corporate manslaughter the first stage will be to determine the corporate defendant’s level of culpability. This will require an assessment of why the offender failed to meet the required standards and to what extent. The defendant will be assigned to one of the following levels of culpability: ‘very high,’ ‘high,’ ‘medium’ and ‘low.’ These categories are the same for individuals convicted of health and safety offences, although the first three epithets are instead ‘deliberate,’ ‘reckless,’ and ‘negligent’ respectively.
The second stage is to determine the level of harm. This requires consideration of both the likelihood of a risk occurring as a result of the offence (high, medium or low) as well as the actual harm which did in fact occur (death, catastrophic injury or lesser injuries). This exercise - which is undertaken in tabular format in the Guidelines - will result in a ‘Harm Category’, ranging from level 1 (high likelihood of harm and a high/ fatal level of actual harm) to level 4 (lowest likelihood of harm and minimal actual injury). Next, the Guidelines invite the courts to consider the defendant’s turnover, and assign it to one of the following categories:
There is an additional category for ‘very large’ organisations, where turnover may be in the hundreds of millions of pounds.
An appropriate fine bracket and starting point are then identified, with courts being invited to assess whether there are any other aggravating or mitigating features which may warrant adjustment of the proposed fine in either direction.
Corporate Manslaughter
Sentencing assessments for corporate manslaughter offences are slightly more straightforward. The first stage is to determine the seriousness of the offence. Courts are directed to consider issues such as:
- 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 will indicate either a higher (Offence Category A) or lower (Offence Category B) level of culpability. Once the defendant has been assigned to an Offence Category, then courts will look at the company’s turnover to determine the sentencing bracket and suggested starting point. The categories of financial size is the same for all health and safety offences, including corporate manslaughter.
Implications
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 the level of harm which occurred.
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.
For example, 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 faced with ‘either way’ offences (those capable of being sentenced in either the Magistrates’ or Crown Court) may also 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 are 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) 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, and will result in greater expenditure.
The Corporate Manslaughter and Corporate Homicide Act came into force in April 2008, yet since that date less than 20 organisations have been prosecuted by the CPS, of which the majority have been resolved by guilty pleas prior to trial. As a result there has been limited judicial commentary on, or interpretation of, the Act, or guidance as to how it is to be applied in future contested cases. Conversely there has been significant consideration of the sentences imposed to date, although it is questionable how much guidance can be taken from the vastly differing fines which have so far been handed down.
With time the CPS are becoming more familiar with the evidential requirements, and more detailed Sentencing Guidelines are now in place. The mechanisms are now therefore in place for the prosecution of a much larger corporate entity than has previously been the case.
The difficulty with this is it may be more difficult to attribute failings to the manner in which the company is organised, and easier to ascribe them to the acts or omissions of a single individual as opposed to the acts of ‘senior management’.
It remains to be seen how the CPS negotiate these evidential obstacles, although the prosecution - and subsequent dismissal - of the case against Maidstone and Tunbridge Wells NHS Trust has provided an opportunity for these issues to be addressed in more detail. In this case, the court has now provided helpful guidance on what, in a corporate manslaughter context, is meant by the term ‘senior management’ and what is required to demonstrate a gross breach of duty by a corporate body.
Despite the changes to the Sentencing Guidelines aimed at bringing consistency, another change could have the opposite effect.
Section 85 Legal Aid, Sentencing and Punishment of Offenders Act 2012, which came into force on 12 March 2015, abolishes the cap on the maximum fines that the Magistrates Courts can impose. The reasoning behind the abolishment of the cap was to enable Magistrates Courts to sentence more cases and reduce pressure on the Crown Courts, freeing their resources to deal with the more complex and serious criminal and health and safety offences.
This was a fundamental change to the sentencing of health and safety offences which has created a lot of uncertainty going forwards, as well as affecting the tactics of a defendant charged with a health and safety offence (see earlier point regarding entering a guilty plea).
The blurring of sentencing powers may lead to a situation in which fines are calculated by Magistrates (or appointed District Judges) on little more than a gut reaction to the case, as opposed to considered legal argument. In contrast to Crown Court judges, Magistrates work part-time, have limited experience of sentencing health and safety offences (compared to the frequency with which other criminal offences are heard) and have usually received little training.
On 6 April 2015, the 2007 CDM Regulations were replaced with the Constructions (Design and Management) Regulations 2015. In summary, the Regulations (in both incarnations) govern the provision of health, safety and welfare when undertaking construction projects.
The basic structure of the 2015 CDM Regulations remains very much the same as the 2007 revision, in that it operates a hierarchy of control, where in the first instance risks are to be avoided if at all possible; if not, then it is necessary to evaluate those risks which cannot be avoided; and finally to put in proportionate measures to control those residual risks.
However, the emphasis on putting in place proportionate measures can be seen as a slight deviation, or relaxation from the 2007 Regulations, in that the current revision places a general emphasis more on skills, knowledge and training (in individual cases) as opposed to excessive adherence on card schemes.
In addition there is an assumption that the management of construction sites will engage with workers, and not only take steps to provide them with health and safety information, but also listen to and take account of any concerns which they may have. The emphasis is now on involving workers in addressing practical health and safety issues at sites, and on co-operation generally between designers and contractors.
The revised Regulations are unlikely to make much practical differences to construction projects that are already well-organised, planned and executed, as they are likely to already meet the required standards. The 2015 Regulations may however cause pause for thought for those sites which are not as well run: as the new Regulations arguably relax some of the duties, any acts of non-compliance will now likely be dealt with harshly by the enforcing authorities.
David Walton
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