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Sentencing Guidelines for Health and Safety Offences – One Year On

Well, it has finally happened. 2016 saw the unprecedented events that nobody thought would actually happen – Brexit, Trump and, oh yes, the new Sentencing Guidelines for Health and Safety legislation.

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Some solicitors practicing in this area said that it was about time the fines for large organisations were increased so that there was a 'real economic impact' and the 'message was brought home not only to the managers of the company but also to its shareholders(*1). For too long this had simply not been the case. The Guidelines were championed as being the stick to redress this perceived injustice.

On the other side of the coin, it was thought that the imposition of the new Guidelines was just another stealth tax for large organisations as the 'blame' culture from the other side of the pond continued to sweep its way into the fabric of the UK's justice system.

One year on from the introduction of the new Sentencing Guidelines it is clear that the fines have increased and the large organisations have been hit hard. So too have many of the small and medium sized organisations. Consequently, therefore, the coffers of the Government have bulged like never before from Health and Safety fines!

With Merlin Attractions leading the way for fines after the Alton Towers investigation, the table below shows the number of £1m + fines over the past 12 months.

Company Size  Fatal? Fine (million) 
Merlin Attractions Very large No 5
Network Rail  Very large Yes  4
ConocoPhillips  Very large  No  3
Balfour Beatty  Very large  Yes  2.6 
Cristal Pigment (2 breaches)  Large  No  2.4 
Decco  Large  Yes  2.2 
Wilko  Very large  No  2.2 
Tata Steel  Very large  No 
Travis Perkins  Very large  Yes 
Warburtons  Very large  No 
G4S  Very large No  1.8 
CRO Ports London  Medium  No  1.8 
Scottish Power  Very large  No  1.75 
Foodles Production UK  Large  No  1.6 
Maria Mallaband Care Group  Large  Yes  1.6 
Embrace All  Medium Yes  1.5 
Kier MG  Very large  No  1.5 
Tarmac  Very large  Yes  1.3 
Parker Hannifin Large Yes 
National Grid Gas Very large  No 
Balfour Beatty CE  Large (group - very)  Yes 
UK Power Networks  Very large  Yes 
Watling Tyres  Medium  Yes 

 

The table truly demonstrates how the new Guidelines have bitten on the large and very large organisations. Prior to the new Guidelines, the seven figure fines were handed down at a rate of approximately 1 per year.

But, the organisations that I believe are being hit hardest and being left with the most impossible of dilemmas when it comes to defending a HSE prosecution are the small and medium sized organisations facing prosecution for non-fatal incidents. Whilst a large organisation may save themselves £1m, £2m or even £3m by pleading guilty and gaining the requisite credit, a smaller organisation when faced with the same level of culpability and harm may well be looking at a starting point and range in the Guidelines which is a) daunting to the say least, b) has the ability to put the Company out of business, c) is disproportionate to the level of offending and d) the credit for pleading guilty is less significant.

This has led to an increase in the number of defended cases. The same cases in the pre Guideline era would have pleaded guilty and been dealt with in the Magistrates Court. A commercial decision would have been made by the Managing Director safe in the knowledge that the financial penalty was affordable, lessons had been learned and the blot on the record was just penance. Indeed, the HSE enjoyed their 98% success rate as a result of this type of thinking. Gone are the days when an organisation would plead guilty on the basis that it must be guilty because the HSE only take cases that it can win!

The Guidelines have introduced a very real fear for small and medium sized organisations that even if they did plead guilty and obtain the requisite credit for the guilty plea they may still have to pay a fine where the starting point is £250,000+(*2). A prospect that could put them out of business. Yes, there are the 'step back' provisions in the Guidelines that enables the Judge to look at the financial position of the organisation – profitability, director's remuneration etc – but when the bottom of the range is £170,000 it is still a far cry from the average fine in the pre Guideline era.

Consequently, the advice to duty holders is changing. Test the prosecution evidence. Advance a defence of reasonable practicability. You never know with a jury. If found guilty after a trial then it is more than likely that your mitigation will have come out during the trial and some damage would have been inflicted on the Prosecution evidence – just how reliable was the injured person, how culpable was the subcontractor who gave evidence for the Prosecution? Maybe, just maybe, the fine will be lower than having pleaded guilty, mitigated for 30 minutes or so and credit received.

To the Managing Director, so many 'ifs' and 'buts' are unpalatable. These Guidelines were supposed to introduce more certainty to the Sentencing exercise. The evidence to date shows that certainty is a luxury that many small and medium sized Companies cannot afford. There will be more trials, more scrutiny of the HSE investigation, more resources needed within the HSE to cope. The result? A fairer approach of the HSE, a more realistic view of culpability and harm at the outset – possibly but shouldn’t that be happening anyway!

Surely, the Guidelines were not designed so the Prosecution could allege High Culpability Category 1 Harm, the Defence to say Low Culpability Category 3 Harm and the Judge to decide Medium Culpability Category 2 Harm. I have seen this happen on several occasions. However, for the Defence Solicitor, it is seemingly impossible to advise an organisation who looks to you for some semblance of certainty in these types of cases. The only way this can be achieved is if the Prosecution takes a realistic and accurate view at the outset which is based on the evidence.

The future? More trials for small and medium sized organisations. Perhaps (and optimistically!), more realistic and pragmatic prosecuting but, above all, more of the same given that the Court of Appeal appears not to intend to provide guidance on the interpretation of the Guidelines(*3).

However, two things to watch out for:
i. Firstly, the level of fines imposed on the very large organisation based on the reference in the Guideline to "where an offending organisation's turnover or equivalent very greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence." Will 2017 see Merlin knocked off the top of the leader board?

ii. Secondly, attempts by the Courts to sentence an organisation based on the turnover/financials of a 'linked organisation' ie, the Group or Parent Company…

Interesting times indeed.

Join our live webinar 

We would be delighted if you can join us on Thursday, 27 April 2017, 12pm - 1pm, for our webinar focusing on 'Regulatory Sentencing Guidelines One Year On'

Key topics will include:

Detailed analysis of the new Sentencing Guidelines for Health and Safety, Corporate Manslaughter and Food Safety and Hygiene offences from Simon Belfield, DWF LLP:

- Their impact over the past 12 months
- Review of recent cases - applying the guidelines to companies and individuals
- What we can expect in the future

Detailed analysis of Environmental guidelines from Tim Green, Outer Temple Chambers:

- Refresher course on the application of the environmental guidelines as applied to companies and their officers
- Review of recent case law applying the guidelines to large and very large companies.
- Analysis of restraint, confiscation and compensation in environmental enforcement
- Costs in environmental enforcement

The increasing importance of competent Health and Safety and Environmental advice.

The need to concentrate on compliance and prevention

To register please click here

References

*1 As stated by Scott Baker LJ in R v F Howe & Son (Engineers) Limited [1999] 2 Cr App R (S) 37
*2 If we take a small company, high culpability and cat 1 harm. This could be a fall through a roof, serious injuries sustained.
*3 R v Watling Tyre Service Limited [2016] EWCA Crim 1753

 

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.

Join our live webinar

We would be delighted if you can join us on Thursday, 27 April 2017, 12pm - 1pm, for our webinar focusing on 'Regulatory Sentencing Guidelines One Year On'

Regulatory Sentencing Guidelines One Year On

Simon Belfield

Senior Associate

I am 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.