Clients in the mining and minerals sector are going to be affected by the Definitive Guideline for the Sentencing of Health and Safety, Corporate Manslaughter and Food Safety and Hygiene offences which was published by the Sentencing Council on 3 November 2015. The new guidelines were issued in response to concerns that the approach taken by the courts in relation to sentencing in those areas was inconsistent and the penalties imposed were too low.

The guidelines are of significance to the minerals industry because sentencing for health and safety offences is likely to increase dramatically and fines imposed under the guidelines will have real economic impact on organisations. The guidelines are also likely to result in an increase in custodial sentences for individuals who have committed a health and safety offence. This risk is very real and individuals working in the minerals industry need to be aware of it.

The guidelines apply to all organisations and offenders aged 18 and older, who are sentenced on or after 1 February 2016, regardless of the date of the offence. They pave the way for courts to continue the recent trend of significant increases in the level of fines being imposed, and the courts have certainly done so in recent months.

The guidelines take the level of culpability, harm and turnover of an organisation as the starting point for determining the appropriate level of fine. This means that larger organisations will face tougher fines. Depending on the size of an organisation, this could mean a fine into the millions of pounds for clients in the minerals industry. Indeed the new guidelines provide for fines of up to £10 million for health and safety offences, and up to £20 million for those convicted of corporate manslaughter. For very large organisations, the courts are able to move outside the suggested range to achieve a proportionate sentence and impose even higher fines. The courts have demonstrated in recent cases that they are willing to do this.

Purpose of the guidelines

The purpose of the guidelines is to give comprehensive guidance to courts and ensure a transparent, structured and consistent approach to sentencing. This was prompted by concerns that the courts were inconsistent in their approach to sentencing which often resulted in fines that were disproportionate to the financial resources of offenders and/ or undermined the seriousness of offences. For clients in the minerals industry, the new guidelines provide a greater degree of predictability that was previously lacking.

The guidelines set out sentencing ranges that aim to reflect the different levels of harm and culpability which may arise in relation to each type of offence. The message sent by that guidelines is that non-compliance will be met with very stiff financial penalties.

Summary of the guidelines

Fines under the guidelines are now intrinsically linked to the turnover of the defendant company. One of the concerns with the new guidelines however is that they do not take into account companies that have high turnover but are not profitable and this could lead to unfairness. Under the new guidelines, the courts are required to follow a number of steps when considering sentencing, including:

  • Determining the offence category by considering the culpability of the offender, the seriousness of the harm risked (low, medium, high or very high) and the likelihood of that harm arising.
  • Identifying the appropriate starting point and category range for an offence, based on a company’s turnover. The guidelines provide tables for each of the five categories of organisation (micro, small, medium, large, and very large). The court may consider other relevant financial, or aggravating or mitigating factors providing the context of the offence to ensure that the proposed fine is proportionate. Having considered these factors, it may be appropriate for the court to move outside the identified category range.
  • Checking whether the proposed fine based on turnover is proportionate to the overall means of the offender. The fine must reflect the seriousness of the offence, the financial circumstances of the offender and the extent to which the offender fell below the required standard. It should also meet the objectives of punishment, deterrence and the removal of gain derived through the commission of the offence in a fair and proportionate way. It should not be cheaper to offend than to take the appropriate precautions and the guidelines make it clear that the fine imposed must be sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation.
  • Consideration of any other factors that may warrant adjustment of the fine, such as wider impacts of the fine within the organisation or on innocent third parties. The fine should not impair the offender’s ability to make restitution to victims, improve conditions in the organisation to comply with the law or impact negatively on employment of staff, service users, customers and local economy. The court will not consider the impact of the fine on shareholders or directors.
  • Consideration of any factors which indicate a reduction, such as assistance to the prosecution or a guilty plea. 
  • The courts must give reasons for the sentence given and must consider imposing compensation or ancillary orders as an alternative to financial penalties. Where sentencing an offender for more than one offence, the courts must apply the ‘totality principle’ by considering whether the total sentence is just and proportionate to the offending behaviour.

What to do next?

Whilst the need to maintain and continue to improve health and safety standards in the minerals industry is has always been vital, the risk of corporate and individual enforcement through significant fines and imprisonment is now very real.

To try to ensure that the worst case scenario can be avoided or, if it cannot be avoided, at least mitigate against the impact of an eye-watering fine, clients in the minerals industry should consider doing the following:

  • Review the risk profile of the organisation and current approach to health and safety to ensure that appropriate systems and standards are in place;
  • Ensure that an effective risk assessment system is in place and that steps are taken to mitigate against the potential for harm;
  • Consider how health and safety policies and procedures can be shared and enforced throughout the organisation to improve performance and avoid accidents;
  • Run training programmes to ensure that everyone in the organisation understands the importance of health and safety and knows what their responsibilities are; and
  • Where concerns are identified, increase compliance by putting in place appropriate measures and precautions and taking remedial action where necessary.