Related event: Shareholders Feel the Pain? - The New Sentencing Guidelines on Health and Safety and Corporate Manslaughter Offences

Recent press reports (for example see The Times) have added further credence to the widespread belief that new sentencing guidelines expected to be published in the next week or so will recommend the imposition of far higher fines for companies convicted of health and safety and corporate manslaughter offences.

Ever since the Sentencing Council put out its proposed guidelines for consultation it has been clear that the overall effect of the changes is likely to be a significant increase in fines. The reason for this is that it is anticipated that the new guidelines will require courts to peg fines to company turnover (amongst other factors). With the largest companies it is conceivable that fines at the level described by the recent press reports (£20 million has been suggested) are possible. It remains to be seen once the guidelines are published exactly what mechanism will be stipulated for the calculation of fines.

One unanticipated consequence of a massive increase in fines may be that companies will choose less often to plead guilty and more often to defend allegations. Companies, internally at least, tend to regard a health and safety prosecution as a commercial matter. Alongside an assessment of the evidence and the company's prospects of successfully defending the allegation go the legal costs and the anticipated outcome in terms of financial penalty if convicted - as well as other less tangible costs such as the impact of the case on the reputation of the company. The outcome of criminal litigation, even in this area where the odds tend to be stacked in favour of the prosecutor, is rarely easy to predict. Where a company is likely to be sentenced to a very significant fine whether or not it pleads guilty it may be more attracted to the prospect of defending the allegation - even on quite poor odds - than it would have been in the past.

In an era when work place fatalities and accidents are declining year on year it is hard to understand the imperative that lies behind this change in sentencing practice. Sentences have been increasing significantly over recent years in any event - a reflection of the court’s increasing concern to impose financial penalties that match the offence and the financial circumstances of the corporate offender. Some will question the wisdom of imposing such rigid guidelines if a consequence is an increase in complex and costly trials.