A £2million reminder of the soon to be implemented Sentencing Guidelines

A UK gas distribution company has been fined £2 million for breaching the Health and Safety at Work etc Act 1974. Are judges pre-emptively applying the new Sentencing Guidelines and is this what we should expect when the Sentencing Guidelines officially come into force in February?

One of the UK’s biggest gas distribution companies has been fined £2 million for breaching section 3(1) of the Health and Safety at Work etc Act 1974 (HSWA). A fine of this severity raises questions as to whether judges are pre-emptively applying the new Sentencing Guidelines which are only due to come into force from 1 February 2016, and in turn, what level of fines we can expect to see imposed when the guidelines officially take effect. This case serves as a sign of times to come and provides companies with a clear warning of the increasing penalties they may face for breaches of health and safety.

The facts

In April 2014, an 11 year old boy and two friends were crossing a canal using a pipeline running on the outside of a bridge. The boys were able to climb on to the pipe from a ramp running from the road to the canal tow path. As they were crossing, the 11 year old body fell from the pipe into the canal below and died.

It was deemed that the company had failed to properly protect the exposed pipeline from the risk of injury from falls from the pipeline. The company had a procedure in place for inspecting this type of pipe crossing, and requirements for providing measures to prevent access. However, their records incorrectly showed the pipe was buried within the bridge rather than exposed on the outside of the bridge. Consequently, the crossing had not been subject to any inspections and had no access prevention measures fitted.

The company was fined £2,000,000 after pleading guilty to breaching section 3(1) HSWA and was ordered to pay £36,102.90 in respect of the prosecution’s costs.

The Sentencing Guidelines

Under the current Sentencing Guidelines, where the offence is shown to have caused death but is not corporate manslaughter, ‘the appropriate fine will seldom be less than £100,000 and may be measured in hundreds of thousands of pounds or more.’ Clearly, the fine imposed here goes above and beyond what would have historically been anticipated.

However, under the new guidance, £2 million is a figure that could easily be imposed given the size of the company involved. The company’s turnover for 2014/2015 was £15.2 billion which would certainly categorise them as a ‘very large organisation’ as it greatly exceeds the £50 million or more threshold for ‘large organisations.’ In this case, the offence would likely fall into harm category 1 as the seriousness of the harm risked was death and there was a high likelihood of that harm arising. It is arguable that the culpability of the company would be deemed to be high, as the prosecution could suggest that there was a serious failure within the organisation to address risks to health and safety.

Applying the new guidance, the starting point for this offence would be £2.4 million with a category range of £1.5 million to £6 million for a large organisation. Given the size of the organisation, the courts could consider it necessary to move outside and above this suggested range to achieve a proportionate sentence.

The future

The level of fine imposed in this case seems to demonstrate that court sentences have been impacted by the reasoning underpinning the guidelines, and that some may now be actively applying them. Although published on 3 November 2015, the new Sentencing Guidelines only officially come into force from 1 February 2016.

Legally, the guidelines should not be considered or applied until their implementation in February and judges should not be influenced by the guidelines until then. On the other hand, it could be argued that a judge may seek to apply the guidelines as a codification of existing good practice (albeit that in reality the guidelines represent a quantum leap in terms of fines by linking them to turnover).

The new Sentencing Guidelines are intrinsically linked to a company’s turnover and although the fine imposed here was a substantial one, it could have been considerably higher given the size and turnover of the company involved and the range of fine that could be imposed even for a large rather than a very large company.

With less than a month to go until the new Sentencing Guidelines come into effect, this case serves as a timely reminder that fines imposed will significantly increase and that those companies with the highest turnover will be hit the hardest, particularly those in high turnover low profit sectors where turnover may not be the most representative measure of a company’s resources.

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Author:Amanda Lea

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.

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.