Definitive Guidelines ("Guidelines") have been published by the Sentencing Guidelines Council. The Guidelines will govern sentences given to corporate defendants found guilty under the Corporate Manslaughter and Corporate Homicide Act 2007 ("CMCHA 2007") and under the Health and Safety at Work etc Act 1974 ("HSWA 1974") of causing death. The Guidelines make it clear that the courts should issue more severe sentences in fatality cases than are currently being given.
Every court must have regard to the Guidelines. They apply to all sentences given on or after 15 February 2010 (regardless of the date of the offence).
Level of fines
Corporate manslaughter offences require a gross breach of a duty of care where failure by senior management is a substantial element in the breach and for this reason it is anticipated that cases prosecuted under the CMCHA 2007 will involve systemic failures. The Guidelines state that an appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds.
In prosecutions under the HSWA 1974 where it is established that the defendant caused the death it is recognised that the degree of corporate culpability may be much wider than in cases prosecuted under the corporate manslaughter legislation (which is reserved for the most serious cases). Cases prosecuted under the HSWA 1974 will include both those where the corporate culpability is slight, for example, where the offence is established due to the unauthorised act of an employee, and the organisation is liable due to inadequate training or supervision, as well as those involving a greater degree of fault. Accordingly, the Guidelines provide a much wider sentencing band. The Guidelines provide the appropriate fine will seldom be less than £100,000 and may be measured in hundreds of thousands of pounds or more.
There will be no direct correlation between the fine and the turnover or profit of the organisation. The same standards are to be expected from all organisations whether large or small. However, the Guidelines state that size is relevant and judges should have regard to the financial circumstances of the organisation including turnover, profit and assets when setting fines. Fines must be punitive and sufficient to have an impact on the defendant. In most cases the fine should be one which the defendant is capable of paying but in extreme cases the level of fine may put a defendant out of business and "this may be an acceptable consequence".
Any effect on the employment of innocent employees or of services provided to the public may be relevant factors to consider. Specifically the Guidelines state that the effect upon shareholders will not normally be a relevant factor for the judge to consider because those who invest in and finance a company take the risk that its management will result in financial loss.
The usual principles such as reductions in sentence for early guilty pleas continue to apply.
Factors affecting level of sentence
The Guidelines require, as a first step, that the seriousness of the offence should be assessed first. The factors to be considered in assessing seriousness include:
- How foreseeable was serious injury?
- How far short of the applicable standard did the defendant fall?
- How common is this kind of breach in this organisation?
- How far up the organisation does the breach go?
In any investigation involving a potential corporate manslaughter prosecution the police/statutory authorities will investigate how far up within an organisation responsibility for the breach lies in order to identify whether the requisite fault by senior management can be identified. It has always been the requirement that in determining the gravity of the offence it is necessary to asses the defendant's culpability, but by expressly asking how far up the organisation does the breach go, it may be that one consequence of these Guidelines will be to encourage a greater scrutiny of management failure for offences limited to a prosecution under the Health and Safety at Work Act.
The Guidelines identify relevant aggravating and mitigating factors which include:
- one or more death, or very grave personal injury in addition to death;
- failure to heed warnings or advice whether from officials such as the Inspectorate or employees (especially health and safety representatives);
- cost-cutting at the expense of safety;
- deliberate failure to obtain or comply with relevant licences;
- injury to vulnerable persons.
- prompt acceptance of responsibility;
- a high level of co-operation with the investigation, beyond that which will
- always be expected;
- genuine efforts to remedy the defect;
- a good health and safety record;
- a responsible attitude to health and safety, such as the commissioning of expert advice, or the consultation of employees or others affected by the organisation's activities.
These factors serve to emphasise the continuing needs to consult with employees over health and safety matters and to audit the business' activities both internally and, externally, by the commissioning of expert advice.
Publicity orders are a sanction which is available in the case of a successful corporate manslaughter prosecution only. The Guidelines provide that publicity orders should ordinarily be imposed because they are relevant to deterrence and punishment. The order should normally specify the place where the public announcement is to be made and should contain a provision designed to ensure the conviction becomes known to shareholders.
As identified in our last bulletin the new sentencing regime does not link the fine to a company's turnover as was feared. The new regime, however, does represent a step change in the approach to sentencing in cases where the Defendant has caused death, and it is clear that large corporate organisations can expect much larger fines as well as the attendant public shaming publicity orders will create. We will have to wait for the first cases to go through the courts before we are able to see how judges interpret these Guidelines in practice.