New sentencing rules for corporate health & safety offences explained

Sentencing guidelines for corporate health and safety offences are about to get a lot more complicated but the message is clear:  risk managers need to be prepared for significant increases in fines. Stephen Barnfield of Hill Dickinson explains.

Every year brings more bad news for businesses unlucky enough to find themselves the focus of a safety investigation. Corporate manslaughter, prison terms for directors, revised guidelines for fatal accidents and sternly rejected appeal cases all point the same way: fines and sentences are on the increase.

The latest development will be the introduction of comprehensive sentencing guidelines covering all safety and food safety offences. The Sentencing Guidelines Council concluded their consultation process at the end of February and finalised guidelines are anticipated in late summer / autumn.

Why do we need new guidelines? If appeal cases are being rejected, does that not suggest that judges are getting it right?

A common complaint of businesses that receive substantial fines is a lack of consistency in sentencing. Identical accidents sentenced on the same day in different courts can sometimes result in wildly differing fines – not in terms of pounds and pence, but in terms of the number of zeroes.

On the one hand, small companies often feel that large corporations get away with it:  ‘What’s £40,000 to them?’ they say. On the other hand, however, large corporations feel that any punishments they receive rarely fit the crime: low-to-medium risk accidents that result in no actual harm can result in fines at the high end of six figures.

The response from the Courts has always been uniform: each case is dealt with on its own merits and it would be impossible for them to set a tariff that takes into account every variable – personal circumstance, levels of management culpability, degrees of risk, degree of harm and so on.

The new guidelines, however, aim to do just that. But how will they achieve this supposedly impossible feat?

If implemented as suggested, the guidelines will replace the old, sensitive ‘à la carte’ approach to sentencing with the judicial equivalent of a complex and convoluted take-away menu where you can only order from column C if you have two items from table M. And a special house sauce.

Currently, a Court would approach a case in the round, taking into account all the circumstances whilst also acknowledging the presence of any aggravating features (such as grave consequences, profit motive or gross disregard).

In the future, however, a Court applying the guidelines will have to go through a series of multi-stage tests. They will have to cross refer against various matrices such as:

• likelihood of harm;
• seriousness of harm risked;
• levels of culpability;
• financial standing.

This will allow them to identify an appropriate ‘bracket’ before considering whether the bracket makes sense in terms of the company’s current finances and ‘wider impacts’.  ‘Wider impacts’ in this case refers to matters such as unjustified harm whereby hundreds of employees might suffer if a business fails irrespective of whether their conduct had anything to do with the offence in question.

If it sounds complicated, it is.

Courts are well used to – and very good at – encapsulating a vast and broad range of circumstances in their decision making regarding sentencing. They are able to reduce weeks of evidence into a short speech and calculate a final figure relatively easily.

Under the guidelines however, much more importance will be attached to each stage of the assessment – whether the likelihood of harm is high; whether the harm risked is level A, B or C; whether culpability falls into the high or medium band. Each stage is likely to be argued and dissected at length, with each argument more abstract and technical than the current approach.

Take, for example, the case of a medium sized organisation (turnover £10 – 50m) committing a medium culpability case involving serious (category 1) harm – for example an employee crushed by a reversing lorry where there was inadequate pedestrian segregation. Application of the matrices yields a ‘starting point’ of £540,000 with the bracket ranging from £300,000 to £1,300,000. A quick scan of HSE press releases over recent years reveals larger organisations being fined much less than that in identical circumstances.

It is clear that the ‘starting point’ brackets for fines are significantly higher than current experience would suggest. It is also clear that the brackets are also sufficiently broad to leave plenty of scope for dissatisfaction on grounds of inconsistency. Overall, companies should be prepared for higher fines once the guidelines come into force. 

How such a system might work in practice remains to be seen. Will the new multi-staged approach lead to greater consistency in sentencing or will it simply mask inconsistencies and make it impossible to compare cases in a meaningful way?

Stephen Barnfield is senior associate at Hill Dickinson.

Stephen Barnfield - Hill Dickinson