Sentencing Council consultation paper published

Could this be the biggest shake up on health and safety offence guidelines for over 30 years?

On 13 November 2014, the Sentencing Council (the Council) published a consultation on sentencing guidelines for health and safety, corporate manslaughter and food safety and hygiene offences (the Guidelines). If adopted these will be the biggest shake up on health and safety offences since the 1970s. A copy of the consultation paper can be found here.

Key to those proposals, the Council is seeking to link fines to the turnover of the offenders for offences relating to health and safety, corporate manslaughter and food safety and hygiene. The Guidelines provide starting points and ranges for fines which, if implemented, could result in significantly increased fines, especially for large companies.  

It is fair to say that the proposed guidelines are complex and require an analysis of additional things such as “harm”, “culpability”, “quantifiable financial savings” and the like. Without question however these guidelines will prove a challenge to the prosecution and defendants.

Whilst the Guidelines would not cover Scotland, they are likely to be taken into consideration by Scottish courts, especially in the case of health and safety as the legislation is UK wide.  

Of further note is the potential application of these current proposals. Previous sentencing guidelines upon implementation have applied to all sentences awarded after a certain date, regardless of the date of offence. It is therefore expected that the Guidelines will also be implemented in this manner. This means that offences currently being investigated may well be sentenced under the new regime.

Review of the published consultation

We have reviewed the consultation and our detailed analysis can be found below. To navigate to the section most relevant to you, please use these links:

Health and safety offences ›

Corporate manslaughter ›

Food safety and hygiene offences › 

Health and safety offences

The Guidelines apply to the main health and safety offences for companies and individuals under the Health and Safety at Work etc. Act 1974 (HSWA), as well as the large number of health and safety regulations covered by HSWA. The proposed scope of the Guidelines covers organisations as well individuals in varying capacities including directors and employees.

In order to redress the balance between small companies and larger ones, the Council has determined that fines should not be reduced from the levels currently being imposed on smaller organisations, but that fines on large organisations should be larger to reflect the substantial means of these offenders, and to send a message to management and shareholders. This means that larger companies, especially those with turnover of £50 million or more, can expect to see a significant increase in penalties handed out by the courts.    

When a large organisation:

  • has a turnover of £50 million or more;
  • has had a is a serious incident, which is given the highest harm category (category 1); and
  • are held to have very high culpability

then the fine range would be between £2.6 million - £10 million. The highest level of culpability will apply where it is found that an organisation has deliberately breached or had a flagrant disregard for the law.

The proposed assessment of harm is not as simple as looking at the resulting impact of the incident, although this will be a key consideration. Instead, a two stage test has been proposed. The first stage will require the assessment of the risk of harm that was created by the offence. This will enable an initial harm category to be determined. However, the court will also then need to consider further factors to make the final category determination.

Even where an organisation is considered to be a micro organisation, with a turnover of not more than £2 million the starting point for a fine following commission of an offence resulting in harm category 1, where the company is found to have very high culpability, is £250,000.

Corporate manslaughter

The Guidelines cover corporate manslaughter and would replace the existing sentencing guidance to ensure there is consistency with health and safety offences. The Council has split corporate manslaughter into two categories – more serious (category A) and less serious (category B).  

For micro organisations, the fine starting points for corporate manslaughter are in fact lower than those currently contained within the Corporate Manslaughter and Health and Safety Offences Causing Death Guidelines. Within the Guidelines reference is made to the fact that only micro and small organisations have to date been convicted of corporate manslaughter, and it is clear that those sentences have been considered when producing the Guidelines. Therefore, for a micro organisation convicted of a category A offence, the starting point is £450,000, whilst for a category B offence, the starting point is £300,000.

However, for large organisations for a category A offence the starting point for the fine is £7.5 million. For medium organisations (which are those classed as having turnover of £10 million - £50 million) the starting point for a category A offence is £3 million. Such fines, if introduced, would mark a dramatic increase in the level of fines larger organisations convicted of corporate manslaughter would be liable for.

Food safety and hygiene offences

Currently, there is very little specific guidance for sentencing food safety offences, and often in such cases the courts extract applicable principles from sentencing in cases involving health and safety.

Whilst the Council does not intend that its proposal will mean an increase in fines on larger organisations committing lower culpability offences, it anticipates that its proposal will result in higher starting points for more serious offences committed by larger organisations. Therefore, companies which turn over more than £50 million are at risk of paying far higher fines than have been awarded historically, should they be charged with food safety or hygiene offences.  

In food safety and hygiene cases, the accused is often charged with a number of offences. The Guidelines reinforce the need for the court to consider whether the total sentence is just and proportionate.

DWF’s response to the Consultation and January 2015 round table discussion

DWF's initial view is that linking fines to turnover is problematic, not least in that it will require the courts to better understand corporate group structures. Turnover is a crude starting point so inevitably detailed accountant reports and accompanying explanation will be required in order to ensure that courts have apply proper consideration to those sentencing factors.

Increasing fines could also serve as an inadvertent deterrent to overseas organisations wishing to trade in the UK. 

That being said, another view point could be that other regulatory offences have turnover as a starting point, so why should health and safety offences be any different?

Proposed changes of this breadth and magnitude require careful consideration from all of those parties affected. DWF will therefore be holding round table discussions to collate a response to the consultation. These will be taking place on:

  • 21 January in Leeds
  • 27 January in London
  • 29 January in Manchester

If you are interested in attending one of our round table events or should you have any questions please do not hesitate to contact our events team.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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Steffan Groch

Partner and Head of Regulatory - Head of Sectors

I head up DWF's national Regulatory team as well as leading the firm’s ‘go to market’ sector expertise. I am also Chair of the UK Health and Safety Lawyers Association.

Paul Matthews

Partner - Head of Regulatory (Yorkshire and North East)

I am a Partner in the Regulatory team and a corporate defence specialist who provides up-front regulatory compliance advice and representation to businesses and senior managers in relation to investigations and prosecutions by regulatory bodies.