For many years, it has been widely held that fines for health and safety and corporate manslaughter offences have been too low, particularly for larger companies. However, the sentencing landscape is due to change significantly with the publication of new sentencing guidelines that will impose tougher penalties from 1 February 2016 for companies convicted of these types of offences.
Why the need for new guidelines?
The previous guidelines only covered offences resulting in fatalities, providing a starting point for fines 1. The purpose of the new guidelines is to ensure that companies take their health and safety responsibilities seriously, highlighting that any fine must be sufficiently substantial to have a "real economic impact" on the organisation, to bring home to both management and shareholders the need to comply with health and safety legislation.
Whilst the guidelines will only apply to sentences after 1 February 2016 (irrespective of the offence date), it is our view that the Judiciary have already begun to take into account the guidance. For example, in September this year, Hugo Boss were fined £1.2 million following the "wholly avoidable" death of a four-year-old boy who died as a result of an unfixed mirror falling on top of him in-store.
What impact will the guidelines have in practice?
Higher fines for companies are inevitable, irrespective of size. Furthermore, individuals are now covered by the guidelines and guidance is given to the length of custodial sentences.
In determining an appropriate fine, courts will consider the seriousness of the harm (looking at the risk and likelihood of the harm occurring and not purely the resulting injury) and the culpability of a company/individual, together with turnover and profitability of an organisation to determine the correct sentencing category. The sentencing categories are as follows:
- Large company - turnover of more than £50 million
- Medium company - turnover between £10 million and £50 million
- Small company - turnover between £2 million and £10 million
- Micro company - turnover up to £2 million
(where companies greatly exceed £50 million, a court might move outside the suggested range to achieve a proportionate sentence).
Health and Safety offences
In the event of a death as a result of a flagrant disregard for health and safety, the starting point could be in the region of:
- £4 million for a large company;
- £1.6 million for a medium company;
- £450,000 for a small company; and
- £250,000 for a micro company.
For a simple technical breach, not resulting in harm, the starting point could be around:
- £10,000 for a large company;
- £3,000 for a medium company;
- £700 for a small company; and
- £200 for a micro company.
Corporate Manslaughter offences
In the event of a death for a flagrant disregard of industry standards, training and widespread non-compliance, the starting point could be in the region of:
- £7.5 million for a large company;
- £3 million for a medium company;
- £800,000 for a small company; and
- £450,000 for a micro company.
In circumstances where the incident was an isolated departure from ordinarily good practice across the company's operations, the starting point could be around:
- £5 million for a large company;
- £2 million for a medium company;
- £540,000 for a small company; and
- £300,000 for a micro company.