UK: New Health And Safety Sentencing Guideline Comes Into Force

The definitive guideline on Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences (the Guideline) was published on 3 November 2015 and comes into force for all matters sentenced on or after 1 February 2016.

For large organisations (those with a turnover of more than £50 million) committing serious breaches of health and safety legislation, a fine of £10 million could be imposed. Very large organisations could be awarded fines which far exceed this.

The Guideline is a welcome development. Prior to the Guideline there was no easy or consistent method for judges to calculate health and safety fines, with legislation frequently providing very wide discretion to impose an unlimited fine, and no clear starting point. The Guideline will introduce certainty in a significant number of cases: in 2014 680 sentences were handed down for offences which would now fall within the Guideline. The court is required to follow the Guideline, unless it would be contrary to the interests of justice to do so.

The Guideline, which will apply to all the main health and safety offences, will provide judges and magistrates with a system according to which the facts of a case can be fed in to a decision "matrix" to help them come up with a fine to suit the individual circumstances of the offence. The system is broadly similar to the system established in environmental sentencing guidelines already introduced on 1 July 2014.  Both lawyers and operators have found this type of system to be logical and helpful, and courts appear to have interpreted the guidelines sensibly and reasonably.

Some ambiguities have been clarified since the Guideline was consulted on, including an explanation of some of the culpability levels. Significantly, the word "voluntary" has been added in relation to remedial steps taken by an offender, meaning an organisation may not be able use a remedial step which formed part of an improvement notice as mitigation. This underlines the need for discussions with the regulator as soon as non-compliance is recorded, in an attempt to voluntarily agree measures which can then be used in mitigation.

Another important point is that the Guideline states that organisations are required to have remedied failings involved in the offence and a failure to do so by the date of sentencing means they will be "deprived of significant mitigation". This underlines the importance of opening a dialogue with the regulator as soon as possible and certainly in good time before any sentencing hearing. 

How does the Guideline work?

Under the Guideline, the court has a nine-step approach (reproduced at the end of this note) to follow in order to calculate a sentence. The stages include determining the category of the offence (for both culpability and harm risked), establishing the harm risked, ensuring the fine fulfils the objectives of sentencing and considering other factors.

The four categories of culpability are similar in some respects to – but not the same as – the environmental sentencing guideline categories of culpability (low, negligent, reckless, and deliberate).  The harm categories range from the highest at 1, which involves death or physical impairment with lifelong dependency on third parties for care of basic needs, to the lowest at 4.

For large organisations the sentencing matrix ranges from £3,000 for a harm category 4 offence with low culpability to £10 million for a harm category 1 offence and very high culpability.

As with the environmental guideline, once the court has come up with a figure, it will then take into account aggravating and mitigating features such as deliberate concealment of the activity, poor health and safety record, falsification of documents, as well as matters such as no previous convictions, evidence of steps taken to remedy the problem and effective health and safety measures in place.

The consequences

Perhaps the most important consequence of the Guideline will be a greater degree of predictability and certainty when it comes to forecasting the size of fines which are likely to be imposed on conviction. 

The Guideline will also probably have the effect of increasing the average size of fines, especially for large and very large companies. The Guideline makes clear that fines must be sufficiently substantial to have a "real economic impact which will bring home to both management and shareholders then need to comply with health and safety legislation".  This hard-hitting approach to sentencing has been given judicial backing in a number of important recent sentencing decisions under health and safety and environmental law. For example, in R v Thames Water¹ in June 2015 a fine of £250,000 was issued after a guilty plea was entered for an offence arising from the discharge of untreated sewage into a brook flowing through a nature reserve. The Court of Appeal said not only should the fine be upheld, but it was lenient and the court would have been prepared to uphold a much higher fine.

It is also possible that the Guideline will increase the level of fines for non-fatal accidents. Whilst enforcement has traditionally been outcome focused, it is worth noting that one of the purposes of the Guideline is to punish employers and companies that expose employees or third parties to risk.  Accordingly, an organisation that has exposed someone to a very severe risk of death should receive almost the same fine as if a death had occurred. The very high culpability category requires "deliberate breach of or flagrant disregard for the law".

Another consequence – especially important for defendants within corporate groups – is that courts are likely to scrutinise company financial information more closely in reaching a decision on sentence.  Parent company accounts, for example, could be deemed relevant for sentencing purposes if the prosecution is of the view that resources of a parent company are available to the offending company and can properly be taken into account.

The risk that company accounts and other information relevant to the financial means of the employer company may be closely scrutinised in any sentencing hearing should encourage companies to review their corporate activities and ensure they are happy with the way their business is structured.  For example, one issue to check in large corporate groups is whether, in the event of a prosecution, exposure to health and safety fines would be "ring fenced" within the relevant business division or would potentially affect a wider business group. 

Finally, companies can use the Guideline to build contingency plans, e.g. strategies to ensure that, if the worst does happen, they can take quick and decisive steps that are consistent with the Guideline to mitigate exposure to fines. This can be an important exercise in liability mitigation since fines cannot be insured, so will always go to the bottom line.

Step-by-step sentencing

Footnotes

^{1 R v Thames Water [2015] EWCA Crim 960}

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