The New Zealand High Court has released its long-awaited full bench judgment of the appeals of three District Court sentencing decisions under the Health and Safety at Work Act 2015 (Act): Stumpmaster, Tasman Tanning and Niagara Sawmilling. In April, we anticipated that this judgment would provide definitive guidance on the proper approach to sentencing under the Act. We can safely say that it has met expectations.

The four step approach to sentencing

The High Court has determined that the approach to sentencing under the Act now requires four steps (as opposed to three).

Step one

Step one involves assessing the amount of reparation. The High Court noted that the increase in fines under the Act should not have any impact on levels of reparation. This is because harm to the victim under the new Act has not changed.

Step two

The fine that is set at step two should use the four band approach below and have regard to aggravating and mitigating factors.

Culpability level Starting point for fine (out of a maximum of $1,500,00)
Low culpability Up to $250,000
Medium culpability $250,000 to $600,000
High culpability $600,000 to $1,000,000
Very high culpability $1,000,000 plus

The High Court noted that:

  • These bands only apply to sentencing of PCBUs that are not individuals. The High Court preferred not to comment on workers and PCBUs who are individuals.
  • In determining culpability, the relevant factors articulated ten years ago in the leading sentencing case under the previous legislation, Hanham, remain unchanged. In particular, the High Court recorded the importance of having regard to the nature of the risk, and differentiating that from the “realised risk”.
  • It was critical of the “routine” and sizeable discounts for mitigating factors, such as remorse, co-operation, reparation, and good previous record. The High Court found that a 30 per cent discount was typically given “on an agreed basis and with little analysis” of the basis for the credit, and that this has the effect of distorting the sentencing process and is a likely contributor to legislative concern over sentencing levels. The High Court criticised the application of credits for reparation payments prior to sentencing, because “in many cases the value of the discount would be twice and sometimes three times as great as the reparation payment.”
  • By way of guidance, the High Court proposed a 30 per cent discount to be applied only in cases that exhibit all the mitigating factors to a moderate degree, or one or more to a high degree.

Step Three (New)

The new step three requires consideration of whether further orders, such as costs to WorkSafe, are required. This addition accounts for orders that were not available under previous legislation.

Step Four

Step four requires an overall assessment of the proportionality and appropriateness of the combined packet of sanctions imposed at steps one to three. In particular, the High Court determined:

  • To prevent reparation awards being impacted by the increased penalties, any reduction to the overall sanction at step four should only reduce the fine component never the reparation.
  • Although not expressly stated in the sentencing criteria in the Act, the defendant’s ability (or inability) to pay is a factor to be taken into account at the final stage of sentencing.
  • Any order for payment towards WorkSafe’s costs should be factored into the assessment at step four.

The result

Turning to the particular appeals, only one of the three were allowed. Despite the Court’s criticism of the excessive discount and inadequate uplift for previous offending, the fine in Tasman Tanning was reduced by $17,000, because the District Court had applied a significantly higher starting point.

In our view the High Court decision provides clarity as to the proper approach to sentencing under the new Act. There will be numerous sentencing decisions in the next two to three months that had been adjourned pending this decision coming out.