The definitive guidelines on health and safety offences (the guidelines) came in to force on 1 February 2014 and set out tables for a range of fine dependent on a company’s turnover, culpability and the harm category the offence is deemed to fall in to. The guidelines, therefore, allow some measure of indication of the likely fine a company may receive given the somewhat formulaic approach to sentence that the tables provide.
However, the upper category range (known as ‘large companies’) so far as the tables are concerned is companies with a turnover in excess of £50 million. That, inevitably, includes companies whose turnover may be considerably higher than £50 million and so the Sentencing Council included a further provision which states that:
‘Where an offending organisation’s turnover or equivalent very greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence’.
This, essentially, placed the fine of a very large company at the discretion of the Judge but there was uncertainty, amongst other things, as to what constitutes ‘very greatly exceeds’ in terms of turnover and how much a Judge should move outside the suggested range in the tables to achieve a proportionate sentence.
The case of Whirlpool UK Appliances Ltd -v- R  EWCA Crim 2186 gave consideration to the sentencing guidelines in the context of very large organisations.
In this case, a self-employed contractor died at the premises of Whirlpool. The company pleaded guilty to an offence contrary to section 3(1) of the Health and Safety at Work etc Act 1974 (an offence of failing to protect the health and safety of persons other than those in their employment) and the matter proceeded to sentence. The Judge determined that this was a low culpability and harm category three case. The guidelines set out a starting point for this offence of £35,000 with a range of £10,000 to £140,000. However, in consideration of Whirlpool’s turnover of £700 million and the fact that the failings were a significant cause of death (allowing the Judge to move up a category range in the guidelines), the Judge determined that the starting point in this case should be £1.2 million. Following credit for mitigation and a guilty plea, the Judge imposed a fine of £700,000. Whirlpool appealed on the basis that the fine was manifestly excessive.
In hearing the case, the Court of Appeal commented that although figures were a key part of the guideline, courts should resist the temptation to approach fines in an arithmetic way and the Judge should approach matters in the round.
One of the first issues considered by the Court of Appeal was that the failing on behalf of the company resulted in a death. In this case, the Court considered that the fact of a death would justify a move in this case not only into the next category up in terms of starting point/range (as is contemplated by the guidelines), but to the top of that category. In this case, this would mean a starting point of £250,000.
The Court of Appeal then had to consider the issue of whether Whirlpool constituted a ‘very large organisation’ for the purposes of the guideline. The Court agreed with the original sentencing Judge that Whirlpool was indeed a very large organisation given that its turnover was several times that of the £50 million bracket for large companies. As a result, the Court of Appeal held that the starting point should have been £500,000 (rather than £1.2 million as determined by the Crown Court Judge). Taking into account mitigation, they then reduced this figure to £450,000. This figure was then reduced to £300,000 given the company’s guilty plea (as opposed to £700,000 imposed by the Judge in the Crown Court).
The Court of Appeal stated that the guidelines were drafted so as to recognise that culpability, likelihood of harm and harm itself should be properly reflected in any fine, as well as turnover.
Whilst the Court of Appeal was keen to stress that sentencing should not be an arithmetical exercise, it does help to give some indication of the likely uplift for very large companies. Those with turnover of around £700 million and above can now certainly expect to be classified as very large organisations the starting point to be at least doubled (and likely more for those companies significantly with higher turnover than £700 million). Those with turnovers of less than £700 million still face uncertainty but given the Court of Appeal’s comments as to Whirlpool’s position justifying an increase in starting point because their turnover was several multiples of £50 million, it should not come as a surprise if courts raise the starting point (in appropriate cases) for those whose turnover is over £100 million.