Background to the case
On Friday 4 September, Hugo Boss UK Limited was sentenced at the Crown Court at Oxford, having earlier entered guilty pleas to offences under the Health & Safety at Work etc Act 1974 and the Management of Health and Safety at Work Regulations 1999.
The fashion retailer was fined £1.2 million with costs of nearly £47,000 following the prosecution by Cherwell District Council, which related to a fatal incident at an outlet in June 2013.
Four year old Austen Harrison was visiting the Hugo Boss store at Bicester Village with his parents when an unsecured mirror fell on him. The three-way mirror, described as 7 foot tall and weighing 18 stone, was propped up against a changing room wall. Austen suffered head injuries and later died in hospital.
The Court was provided with financial information which showed that the turnover for Hugo Boss UK Limited rose from £124.8 million to £192.8 million (with profits increasing from £16.6 million to £23.8 million) in the period between 2011 and 2014.
In sentencing, Judge Peter Ross took into account the impact of the child's death as well as the "enormous" risk the unsecured mirror had posed both to staff and customers. In particular, the Judge noted that there had been near misses reported at the other Hugo Boss UK stores, which included reports of a falling mirror in 2009 and an unsecured mirror in 2010. The Judge commented that "this was not an isolated incident. I am not saying Hugo Boss UK Limited did not have a health and safety system; it did. It had a system which implemented properly with the appropriate training, managing and compliance would prevent this. There was no stable wall, no attempt at fixing and the mirror was simply balancing on the floor. No one at Hugo Boss UK Limited took the trouble to see if it was properly installed."
Current approach to sentencing
This is set out in the Sentencing Council's Definitive Guideline: Corporate Manslaughter and Health & Safety Offences Causing Death, published in February 2010. In relation to the level of fine, the Guideline states as follows:
The offence of corporate manslaughter, because it requires gross breach at a senior level, will ordinarily involve a level of seriousness significantly greater than a health and safety offence. The appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds.
The range of seriousness involved in health and safety offences is greater than for corporate manslaughter. However, where the offence is shown to have caused death, the appropriate fine will seldom be less than £100,000 and may be measured in hundreds of thousands of pounds or more.
The rationale behind the current guideline was that it was anticipated that the introduction of the Corporate Manslaughter and Corporate Homicide Act 2007 (CMCHA) would, for the first time, see convictions of large organisations with correspondingly large fines. However, there have been to date only 15 convictions under the CMCHA, mainly of the same type of small-to-medium size organisations convicted prior to its introduction, with the largest fine imposed standing at £600,000.
The new "tariff" system
In November 2014, the Sentencing Council opened a new consultation in relation to "Health and safety offences, corporate manslaughter, food safety and hygiene offences".
In opening the consultation, the Sentencing Council identified a number of issues in relation to the sentencing of health and safety offences as follows:-
- A lack of familiarity of magistrates and judges with these cases resulting from the relative infrequency with which they come before the court, in comparison to other criminal cases.
- Inconsistency in how various factors were weighted and applied in reaching sentencing decisions across the country.
- The concern that fines imposed on organisations for health and safety offences, in particular larger organisations, were too low relative to the harm caused, the culpability of the offender and, on occasions, to the means of the offender.
The new draft guideline proposes that the court considers harm and culpability factors to identify the seriousness of the offence, placing the offence into one of four categories of harm and culpability ranging from very high down to low. The proposal is that the court then uses financial information to identify the size of the organisation, with bandings from micro to large, which, along with the harm and culpability ranking, enables a starting point and range of appropriate fines to be identified in sentencing tables.
The consultation on the draft guidelines ended in February 2015, with the date of introduction yet to be confirmed, although expected to be later this year or in early 2016.
Example - application of new guidelines to Hugo Boss UK Limited case
1) Level of Harm
- seriousness of harm would fall into Level A – death
- likelihood of harm – this has to be classed as either high, medium and remote, and, in conjunction with the assessment of seriousness, would place this case either in harm category 1, 2 or 3 (of 4)
- to assess, need to consider whether the offence exposed a significant number of people to the risk of harm at one time AND whether the offence was a significant cause of actual harm
- on the facts, there was a large, heavy, unsecured mirror in a place regularly used by staff and customers, the collapse of which resulted in death – harm category 1
2) Level of culpability
- this is categorised as very high, high, medium or low
- very high – indicated by deliberate breach of or flagrant disregard for the law
- high – indicated where the offender fell far short of the appropriate standard; for example, by
- failing to put in place measures that are recognised standards in the industry
- ignoring concerns raised by employees or others
- failing to make appropriate changes following prior incident(s) exposing risks to health and safety
- allowing breaches to subsist over a long period of time
- evidence of serious, systemic failings within the organisation to address risks to health and safety
- in this case, the evidence is that there was a health and safety management system in place but a failure to follow up on prior incidents and therefore it is likely culpability would be classed as high
3) Size of organisation
- a turnover of £50 million or more places an organisation in the category of large
- if it greatly exceeds this, it may be viewed as very large and the starting point may be higher
- on the facts of the Hugo Boss case, it would be categorised as large
Application – Harm Category 1 for a large company with high culpability provides a starting point of £2.4 million with a category range of £1.5 to £6 million.
Once the court has established a starting point, it should consider aggravating and mitigating factors, and consider any factors which may warrant the adjustment of the fine, followed by the usual sentencing guidelines in relation to reduction for guilty plea.
Hugo Boss UK Limited entered guilty pleas which would attract credit – for example a fine of £1.8 million could be reduced to £1.2 million (the level of fine in this case) if maximum credit was given. This would therefore fall within the suggested tariff, albeit at the lower end.
The Sentencing Council anticipates the new guidelines will result in higher penalties for larger organisations and the £1.2 million fine in this case does appear to illustrate a move towards this. Certainly this is a particularly large fine for a Local Authority health and safety prosecution given that according to statistics from the Health & Safety Executive these resulted in total fines of £1.6 million over the last year, with an average of £18,944 per offence.
For businesses, it is a timely reminder of the importance of not relying merely on the existence of a health and safety system, but ensuring that it is properly managed and reviewed where necessary and that there is adequate training and supervision in place. In particular, businesses should consider whether there are appropriate procedures for reviewing health and safety following incidents and near misses.