New sentencing guidelines for health and safety offences

Currently, the Courts in England and Wales have the power to impose unlimited fines on organisations and individuals in respect of offences under the Health and Safety at Work etc Act 1974 (HSWA), the Corporate Manslaughter and Corporate Homicide Act 2007 (CMCHA) and food safety and hygiene legislation.

On 3 November 2015, the Sentencing Council published a new Guideline which will provide Courts with some clarity as to how these fines should be assessed. The Sentencing Council is an independent, non-departmental public body of the Ministry of Justice that issues guidelines on sentencing which the Courts must follow (unless it is not in the interests of justice to do so).

For corporate defendants, the Guideline directs the Court to have regard to the organisation’s annual turnover when imposing a financial penalty. There are 4 categories of organisation assessed by turnover: large (turnover of £50 million or greater); medium (turnover between £10 million and £50 million); small (turnover between £2 million and £10 million), and micro (under £2 million). So that the Court can assess this, an organisation will be required to provide its financial information for the preceding three years at sentencing. Where an organisation fails to provide this information, the Court is entitled to infer from the evidence/circumstances of the case that the organisation can pay any fine it orders.

Although maximum thresholds are set for very serious offences committed by large organisations with a turnover of £50 million and over, the Guideline notes that where an offending organisation’s turnover greatly exceeds this, it may be appropriate to move outside the suggested penalty ranges. This could mean for serious offences by very large organisations, penalties in excess of £10 million for health and safety offences, £20 million for corporate manslaughter offences and £3 million for food safety and hygiene offences.

Organisations

Breaches of sections 2 and 3 of the HSWA (which set out the employer’s duty to employees and non-employees in respect of health and safety) or health and safety regulation can incur fines of up to £10 million under the new Guideline.

The Court will examine the harm caused and culpability factors to determine the appropriate fine. For example, where an organisation commits an offence that exhibits a “deliberate breach of or flagrant disregard for the law”, it will be assessed as having very high culpability. Once culpability has been examined, the Court will assess the risk of harm caused, with more serious offences attracting higher penalties.

For the most serious offence committed by a company with a turnover of £50 million or greater, the starting point for a fine is £4 million within a category range is £2.6 million to £10 million. The Court can then discount or increase the penalty depending on the harm caused and the culpability factor.

The Court should also consider whether ancillary orders are appropriate, e.g. orders for compensation or remediation under section 42(1) of the HSWA.

Individuals

The Guideline also sets out the steps to be followed when sentencing individuals. These are broadly similar to those for organisations, although there are some differences. The starting point for the most serious offence committed by an individual is 18 months’ imprisonment and the category range is 1 – 2 years’ custody. Where an offence has been committed by a director, the Court may impose additionally a disqualification order under section 2 of the Company Directors Disqualification Act 1986. When imposing a prison sentence the Court must also give consideration to any time spent on bail awaiting trial. Penal sentences are used sparingly and only in extreme cases.

For an offence under section 1 of the CMCHA, an organisation can incur a fine of up to £20 million under the Guideline.

When assessing the seriousness of the offence, the Court should consider factors including the foreseeability of serious injury, the extent to which the defendant fell short of the appropriate standard; whether the kind of breach was widespread within the organisation; and the number of deaths/persons put at risk of death. Again, the level of fine to be imposed will be assessed by reference to the seriousness of the offence and the organisation’s turnover. For the most serious offence committed by a large organisation with a turnover of more than £50 million, the starting point is £7.5 million and the category range is £4.8 million to £20 million.

In addition to a fine, the Court may impose an ancillary order (including a compensation order). Under the CMCHA, the Court may also make a remediation order to require the organisation to remedy the failings that led to the offence, and/or make a publicity order. A publicity order will require the organisation to publicise that it has committed the offence, as well as the details of any penalty imposed.

For offences under regulation 19(1) of the Food Safety and Hygiene (England) Regulations 2013, regulation 17(1) of the Food Hygiene (Wales) Regulations 2006 and regulation 4 of the General Food Regulations 2004, an organisation can incur a fine of up to £3 million.

As with health and safety offences, the seriousness of food safety offences will be assessed by reference to culpability and harm. For the most serious food safety and hygiene offences committed by a large organisation with a turnover of £50 million and over, the starting point is £1.2 million and the category range is £500,000 to £3 million. In terms of ancillary orders, a Court can make an order for compensation and/or a hygiene prohibition order.

The Guideline comes into force on 1 February 2016, and will apply to all cases sentenced after this date (regardless of when the offence occurred).