Sentencing Guidelines, introduced on 1 February 2016 for Health and Safety, Food Hygiene and Corporate Manslaughter offences are starting to bite.
A range of unsuccessful appeals against sentence has affirmed that the harsher sentences are being upheld and that the courts are right to follow the Guidelines fairly rigidly.
The purpose of the Guidelines was to simplify sentencing by adopting a step-by-step approach which relies upon factors including; the culpability of the company, the seriousness of harm risked and the likelihood of harm. A stated aim of the Guidelines is for sentences to send a message to larger companies that such failings are unacceptable and to deter others from offending, with the courts handed both a starting point and spectrum for sentences based on the offender's turnover once the above assessment has been made.
Large criminal fines
Since their introduction, businesses convicted of health and safety breaches have been given larger criminal fines. While there have been high profile cases such as the £5 million fine handed down to the owners of Alton Towers for their 'Smiler' accident (a record for a non-fatal accident in the UK), more than a dozen other businesses have received fines in excess of £1 million in 2016. Total fines issued to businesses as a result of health and safety prosecutions since the introduction of the Guidelines are approaching £50 million - a recent fine under the Environmental Guidelines for Thames Water topped £20 million. Businesses must be on high alert.
The approach of the appeal courts
The appeal courts are taking a robust approach. Most appeals have been unsuccessful. Businesses must take note high fines and prison sentences are on the increase and in particular the change in approach of the courts which may affect strategic decisions very early in a case.
Focus on risk
In upholding fines, the appeal courts are taking a hard line. It is not necessary for anyone to be injured. In a recent case involving the release of natural gas on three separate occasions, the Court of Appeal upheld the £3m fine noting 'the offence lies in the creation of risk and it is that which must be punished'. The case highlights the focus on risk of harm when calculating health and safety sentences. As a result, more businesses fall within a higher offence category which in turn will attract a higher fine.
Delay bringing prosecution
Prosecution delay is not a good reason to reduce a sentence made under the Guidelines. That was the argument in a recent appeal by a tyre company where there was a 10 year delay in bringing the case to court. The argument was rejected and the £1m fine was upheld.
Strict following of the Guidelines
A company director was given a prison sentence of 12 months after pleading guilty to breaching health and safety laws after a worker was killed. Part of the appeal was that the prison sentence should have been suspended rather than served. Authorities from the Court of Appeal Criminal Division were submitted in support of the appeal together with a submission that those authorities should be persuasive in changing the sentence.
The appeal court upheld the sentence. It emphasised that the Guidelines were to be strictly followed when sentencing and that judges would not consider the decisions of other cases in the Court of Appeal Criminal Division (or any other case law).
North of the border: the jurisdictional influence
In Scotland a recent appeal by Scottish Power following a serious accident in Scotland against a £1.75M fine was reduced to £1.2M on appeal, with the court acknowledging that the English guidelines could reasonably be used.
The bigger picture
It is important to look beyond the Guidelines and to remember that the HSE and other stakeholders, including the police, coroners and environmental health are looking beyond the traditional reactive prosecution following an accident occurring.
We have identified the following trends:
- a sharp increase in the prosecution of directors and managers, not just to drive corporate pleas to offences;
- the HSE is increasingly willing to prosecute 'risk based' offences - accidents are merely tangible evidence of a failing, but the exposure to risk may be evident without any accident;
- the HSE has a stated aim to look beyond health and safety to issues such as welfare, including stress and workplace culture;
- as several businesses have found, most recently in the case of a Thames Valley aircraft manufacturer, the HSE will look far more carefully at the maintenance of and failure of equipment which they have manufactured, installed and serviced, rather than leaving this to product liability law; and
- the conviction of individuals is more likely to result in a custodial sentence.
Assess your business risk profile in light of the new Guidelines.
Focus on managing the risk of your core business, which could pose a much higher risk than others depending on your business activity, the quality of the workforce, the operating hours, use of and interaction with contractors and the equipment used (as well as how busy the business is and what pressures might be placed upon you to meet deadlines).
Senior management (and shareholders who hold them to account) should not rely on delegating duties to consultants, contractors or middle managers.
Do not allow your health and safety strategy to gather dust. There is no substitute for a culture which supports safe working, driven from the top echelons of management in every business, combined with properly implemented safety systems, up to date equipment and proportionate investment in the right internal and external experts.
If an incident does occur, internal investigations and improvements going forward need to happen immediately. Prosecutors will give short shrift to the unprepared and fines are likely to be significant.
Do not wait for a summons to land before considering your defence, a detailed accident investigation and instruction of experts - prosecutions can occur years down the line when reliable and persuasive evidence over topics like culpability and harm are harder to gather. Furthermore, with progress expected at the first hearing, defendants being given little notice of the details of a prosecution, and reductions for guilty pleas being eroded after that hearing, it is hugely important to be ready for any threatened prosecution when it arrives.
. UK Business: you have been warned!