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In the latest news we look at Corporate Manslaughter where fines can to rise to £20m.
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Corporate Manslaughter: Fines to rise to £20m
Monday 25th January 2016
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The Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Sentencing Guidelines, produced by the Sentencing Council, come into force on 1 February 2016 and will apply to any organisations and offenders aged 18 and older, sentenced on or after that date, irrespective of the date of the offence.
Pursuant to Section 125(1) of the Coroners and Justice Act 2009 when sentencing offences committed after 6 April 2010 every court must follow the relevant sentencing guidelines, unless satisfied that it would be contrary to the interest of justice to do so.
These new guidelines supersede the 2010 Sentencing Guidelines which set out that fines in fatal accident cases would ‘seldom be less than £500,000’ in corporate manslaughter cases, or £100,000 in cases involving breaches of the Health & Safety at Work Act 1974.
The 2016 guidelines set out a clearer set of sentencing criteria and attempt to guide the judiciary through a set of steps – in a similar way to more mainstream criminal sentencing guidelines – for consideration when fixing fine levels and deciding on the lengths of custodial sentences.
1. Sentencing organisations - cases involving breaches of the Health and Safety at Work Act 1974 Sections 2 and 3 and breach of Health and Safety regulations
The guidelines set out that the applicable sentencing range is anything between £50 and £10 million pounds. However, the guidelines give both the Magistrates and Crown Courts the power to impose an unlimited fine. The Courts are directed to make an assessment as to offenders’ culpability by reference to various familiar factors. Where breaches were flagrant or deliberate, culpability will be high; conversely, where breaches were minor and isolated culpability will be lower.
An assessment of harm is then undertaken, requiring a consideration of both the seriousness of the harm risked by the breach; and the likelihood of that harm arising, allowing the Court to arrive at a ‘Harm Category’ between one and four. The starting point fine and the category range is then set out in tabular form, dependent upon the turnover of the relevant organisation.
For larger organisation – defined as those with a turnover of more than £50m – a case involving high levels of culpability and a high harm category has a starting point of £4m with a sentence range of between £2.6m – £10m. The guidelines also make it clear that if the relevant turnover significantly exceeds the £50m figure then it may be appropriate to exceed the upper range of the fine bracket.
For businesses with a turnover of over £ 50 million even a low culpability and low harm category offence has a starting point of £10,000 and a range of between £3,000 and £60,000 under the new guidelines.
For medium size businesses – defined as those with a turnover of between £10m and £50m broadly the worst case under these guidelines is between £4m and £10,000.
The usual range of sentencing considerations apply such, credit for plea, the presence of aggravating or mitigating features etc.
2. Sentencing Individuals – cases involving breaches of the Health and Safety at Work Act 1974 sections 2, 3, 7, 37 and breach of Health and Safety regulations.
The guidelines set out the maximum penalty when tried in the Crown Court as an unlimited fine and/or 2 years’ custody and when tried in the Magistrates Court an unlimited fine and/or 6 months’ custody
The same broad principles apply in assessing culpability and harm, along with the same offence features and discounting principles. The Court is directed that in breaches at the high culpability and high harm end of the spectrum custodial sentences of between 12 and 24 months should be imposed. At the lower end of the spectrum are community orders and fines ranging from 25% - 700% of weekly income.
3. Corporate Manslaughter – cases involving breaches of section 1 of the Corporate Manslaughter and Corporate Homicide Act 2007.
These matters are triable only on indictment and carry a maximum penalty of an unlimited fine. The range as set out in the guidelines is a fine of between £180,000 – £20 million.
The Court is asked to direct itself towards considering four questions:
- How foreseeable was serious injury?
- How far short of the appropriate standard did the offender fall?
- How common is this kind of breach in this organisation?
- Was there more than one death, or a high risk of further deaths, or serious personal injury in addition to death?
Broadly, where the Court considers that the answers to the above questions indicate a high level of harm or culpability within the context of offence the offence will be treated as a ‘category A’ offence and otherwise, a ‘category B’ offence.
Following an assessment of the company’s turnover the Court is invited to arrive at a fine in accordance with the following table:
(Turnover of £50m+)
|A||£7,500,000||£4,800,000 - £20,000,000|
|B||£5,000,000||£3,000,000 - £12,500,000|
(Turnover £10m - £50m)
|A||£3,000,000||£1,800,000 - £7,500,000|
|B||£2,000,000||£1,200,000 - £5,000,000|
(Turnover £2m - £10m)
|A||£800,000||£540,000 - £2,800,000|
|B||£540,000||£350,000 - £2,000,000|
The guidelines also suggest that where it is proper to do so an assessment of assets available against which the Court may impose a fine may include assets of ‘linked organisations’. Although there is no further guidance on this issue, this may be an attempt to overcome the difficulties that can arise when the Courts are dealing with subsidiaries of larger companies which are no longer trading, or companies who are deemed to have engineered the insolvency of one company whilst establishing another similarly named company in order continue business and to seek to avoid any potential fine.
These guidelines represent another step in the continued push for the attention and accountability of those who own and operate businesses. The guidelines set out considerably higher fines than have previously been imposed in corporate manslaughter and health and safety cases although in the main in those previous cases the constraint on sentencing may well have been the means available to the company against which a fine could be levied.
The message remains, as it has been some time, that: “fines must be sufficiently substantial to have a real economic impact which will bring home to management and shareholders the need to achieve a safe environment for workers and members of the public affected by their activities.”
If you would like more information about corporate manslaughter or to discuss any issues you may have please contact: