NEW SENTENCING GUIDELINES FOR HEALTH & SAFETY OFFENCES ? CRIME SHOULD NOT PAY
NEW SENTENCING GUIDELINES FOR HEALTH & SAFETY OFFENCES
– CRIME SHOULD NOT PAY
New sentencing guidelines for safety offences and corporate manslaughter took effect on 1 February 2016.
This article looks at the key features - and how companies should respond. Courts will have to consider the following:-
Culpability
This may be
Very high, where there is a deliberate breach of or flagrant disregard for the law.
High, if it falls far short of the appropriate standard. For example ignoring industry standards, failing to heed concerns when raised, failing to act on previous incidents allowing breaches to subsist over a long period of time and where there are serious systemic failings.
Medium, defined as between “high” and “low”!
Low, where there were significant efforts…. to address the risk although they were inadequate or there was no prior event or warning indicating a risk. Failings must be minor and not systemic.
Harm
Traditionally prosecutors have been mainly preoccupied with the outcome of an incident but the new guidelines now also look at the risk of harm.
The net effect is to bring cases that could have been fatal or serious into the “high harm” category. Many health and safety incidents have the potential for death or serious injury and prosecutors are likely to highlight this fact. A leading QC said a client fined £25,000 in 2015 would now face a fine running into millions under the guidelines. This is a dramatic statement and time will tell. However there is no doubt courts will now look at the seriousness of the risk taking behaviour, not just the result.
Turnover
The guidelines include case studies such as a near miss scaffolding collapse in a high street. Company turnover was £3 million. It was a medium culpability case with a high risk of “level B” harm, a medium risk of “level A” harm (death or a lifetime of dependency) but not involving large numbers of people. The starting point was £24,000 and category range £12,000 - £100,000.
Aggravating and Mitigating Factors
These are
Aggravating:-
Cost cutting
Deliberate concealment
Breach of court order
Obstruction of justice
Poor record
Falsification of documents
Deliberate failure to obtain or comply with relevant licences
Exploiting vulnerable victims
Mitigating:-
No previous convictions
Remedial steps taken
Co-operation with investigation (beyond that which will always be expected)
Good H&S record
Effective H&S procedures
Self reporting, co-operation and acceptance of responsibility
The court applies these factors within the “category range” and may make further adjustments to consider:-
Profitability
Profit margin
Benefit derived from the offence
Whether the fine could put the offender out of business – but sometimes this is an acceptable consequence
impacting third parties such as employees
How will the guidelines be applied?
New guidelines for environmental offences were looked at by the Court of Appeal in 2015 giving us an idea of what is to come. Thames Water allowed untreated sewage to enter an SSSI. The fine was £250,000. The court said objectives of punishment, deterrence and the removal of gain (for example …not to expend sufficient resources in modernisation and improvement) must be achieved by the level of penalty imposed. This may well result in a fine equal to a substantial percentage, up to 100% of the company’s pre-tax net profit….. even if this results in fines in excess of £100 million.
These comments involved a huge utility company, but warn us fines equal to a substantial percentage of a company’s net profit are a distinct possibility, particularly as guideline fines for health and safety are set higher than for environmental offences.
How should organisations respond to the new sentencing guidelines?
For a £2 - £10million turnover company the “high” or “very high” culpability starting points for category 1 harm are £250,000 and £450,000 respectively, in sharp contrast with the starting points of £45,000-£160,000 for “low” to “medium” culpability cases. For big companies with high turnovers the difference in starting points between high and law culpability can be huge. Therefore all organisations should study the definitions of culpability and the aggravating factors and make sure the definitions could not be applied to them. Particular attention should be paid to systems of monitoring and review so issues are never left unaddressed. Avoid allowing breaches to subsist over a long period of time which is an indicator of high culpability. The new guidelines expect to see directors and senior managers proactively leading health and safety so organisations should also study HSE guide Leading Health and Safety at Work (INDG417rev1).
If you have a question on this topic or any other health & safety, environmental or regulatory issue affecting your business please call our regulatory team for a free initial discussion.
Andrew Clarke can be reached at a.clarke@gullands.com or on 01622 689733.
05.02.15