The Sentencing Council has issued the definitive guideline in relation to the sentencing of health and safety offences and corporate manslaughter offences which applies to all organisations and individual aged 18 and over who are sentenced on or after 1 February 2016, regardless of when the actual offence took place.
The guideline sets out the range of sentences available in the form of tables for each type of offence.
These are split into category ranges depending on the seriousness of the offence with an identified starting point for each category. The court is then directed to consider relevant factors in determining the appropriate fine from within the category range, although it is able to go outside the range where appropriate.
The guidelines cover organisations from micro (turnover of less than £2 million) to large (turnover of over £50 million) and provides for fines of up to £10 million for health & safety offences and £20 million for corporate manslaughter. Where an organisation greatly exceeds £50 million turnover, the guidelines provide that the court may impose fines above the suggested maximum levels.
Health & Safety Offences
The court is directed to consider culpability and harm in order to determine the seriousness of the offence.
Culpability ranges from very high - deliberate breach of or flagrant disregard for the law down to low - the offender did not fall far short of the appropriate standard, where for example, the failings were minor and it was an isolated incident.
Having established culpability, the court must then consider risk of harm. There is no requirement to prove that the offence caused any actual harm, although where it did so, this will also be taken into consideration.
The assessment of harm requires consideration of two factors:
- The seriousness of the harm risk which is divided into level A, B or C
- The likelihood of that harm arising, categorised as high, medium or low.
Level A covers fatalities as well as physical or mental impairment resulting in lifelong dependency or significantly reduced life expectancy, B covers physical or mental impairment which has a substantial and long term effect on the ability to carry out daily activities or return to work or a progressive permanent or irreversible condition, with level C covering all other cases.
The court must also consider the number of workers or members of the public exposed to the risk of harm and whether the offence was a significant cause of actual harm.
Significant cause does not mean it is the sole or principal cause but one which is more than minimal, negligible or trivial. The guideline notes that the actions of victims are unlikely to be considered as contributory events for sentencing purposes (unlike, for example, in civil proceedings, where this may be taken in account) as "offenders are required to protect workers or others who may be neglectful of their own safety in a way which is reasonably foreseeable".
If one or both of these factors apply the Court is directed to consider either moving up by harm category or moving up in the category range of the next step in establishing the level of fine.
Harm is then categorised from level 1 to 4, with 1 being the highest level.
Starting point and category range
Once the culpability and harm categories are established the court should identify the appropriate table, depending on the size of organisation.
These are categorised as:
- micro - turnover of less than £2million
- small - turnover between £2 and £10million
- medium - turnover between £10 and £50million
- large - turnover over £50million
The offender is expected to provide comprehensive accounts for the last three years and if it does not do so, the court is entitled to draw reasonable inferences including an inference that offender can pay any amount of fine.
The highest category range would be a large organisation, where there is very high culpability and category 1 harm which would mean a starting point of £4 million and a category range of £2.6 to £10 million.
At the other end of the category range would be a micro organisation where there was low culpability and category 4 harm - a starting point of £200 and a category range of £50 to £2,000.
Factors affecting seriousness
The guideline contains a table of factual elements which may increase or reduce the seriousness and result in an upward or downward adjustment from the starting point.
Factors increasing seriousness, include recent relevant convictions, cost cutting at the expense of safety, deliberate concealment of illegal activity, breach of Court Order, obstruction of justice, poor health and safety record, falsification of documentation or licences, deliberate failure to obtain or comply with relevant licences and, the targeting of vulnerable victims.
Factors reducing seriousness include no previous convictions or relevant recent convictions, evidence of steps taken voluntarily to address the problem, high level of co-operation with the investigation beyond that which is expected, a good health and safety record, effective health and safety procedures in place and self-reporting and acceptance of responsibility.
The guideline then directs that the court should "step back" and review the initial fine to ensure that it fulfils the sentencing objectives, at which point the court may adjust it upwards or downwards including outside of the offence range.
In particular, the fine must have sufficient economic impact to bring home to management and shareholders the need to comply with health and safety legislation.
The principles in relation to sentencing of individuals are similar, with the court directed to assess culpability and harm, but the sentencing options include community orders and custodial sentences of up to two years, in addition to unlimited fines.
The guideline gives the offence range as being £180,000 to £20million.
Again, the court is directed to consider the seriousness of the offence, bearing in mind that every case of corporate manslaughter will involve death and corporate fault at a high level, by asking the following questions:
- How foreseeable was serious injury?
- How far short of the appropriate standard did the offender fall?
- How common is this kind of breach in this organisation?
- Was there more than one death or a high risk of further deaths or serious personal injury in addition to death?
The offence is then categorised as either A (higher harm) or B (lower harm) depending on the level of harm or culpability within the context of the offence.
The same categories of organisation from micro to large apply. For a large organisation where the offence is considered to fall into category A, the starting point will be £7.5 million with a category range of £4.8 - £20 million. At the other end of the range, for a micro organisation where the harm/culpability is assessed as category B, there is a starting point of £300,000 with a category range of £180,000 to £540,000.
Again it is made clear that for very large organisations greatly exceeding the £50 million turnover of a large organisation, it may be necessary to move outside the suggested ranges.
The factors affecting seriousness are in similar terms to those for organisation. For corporate manslaughter, factors reducing seriousness do include that other events beyond the responsibility of the offender contributed to the death. However, again, this is not expected to include actions of victims.
These new guidelines will mean that in the majority of cases, fines for health and safety offences will increase dramatically. The principal factors governing the level of sentencing are the degree of harm done, the degree of culpability of the offending company, and the company’s turnover. This means large organisations in particular could face fines reaching many millions of pounds for the most serious offences. A "large" organisation for the purposes of the guidelines is one with a turnover in excess of £50 million.
For example, the recent prosecution of Siemens Windpower A/S (SWP) and Fluor Limited resulted in fines of £375,000 and £275,000 respectively. Under the new guidelines the sentencing range in those cases might well have been between £1.5 million and £6 million. Likewise, a recent prosecution of Baxters Food Group Limited resulting in a fine of £60,000 for a non-fatal accident might, under the new guidance, increase to a fine between £550,000 and £2.9 million.
What companies should be aware of is that the new guidelines will apply to all cases sentenced after the implementation date of 1 February 2016 not all offences committed after that date. Any companies who are currently subject to prosecution and which are likely to plead guilty may well be doing all they can do have those sentences dealt with as soon as possible so as to avoid being sentenced under the new regime.
This underlines the importance of companies giving their health and safety management systems the highest priority. Having proper procedures in place not only reduces the level of risk of committing an offence in the first place, but it also provides evidence that can be used in mitigation and reduce the level of sentencing faced when an offence is committed.