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Major sentencing shake up proposed with turnover-linked fines

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Organisations convicted of breaches of health and safety law could face a significant increase in fines, with large employers facing bills of up to £10m for the most serious offences under guidelines being consulted on by the Sentencing Council.


Under the proposals judges will base fines on the turnover of the company – a marked departure from the current sentencing regime – with employers being placed into four bands: micro, small, medium and large. 
 
Large employers with a turnover of more than £50m convicted of a health and safety offence stemming from a fatality could face fines of between £180,000 and £10m, depending on culpability. Small organisations with a turnover of between £2m and £10m could expect to receive a fine of between £25,000 and £1.6m.
 
The 14-week consultation is also seeking views on proposals to drastically hike the level of fines for corporate manslaughter cases. The plans would see large companies guilty of the most serious offences face penalties of between £4.8m and £20m, depending on mitigating or aggravating factors, with a starting point of £7.5m. Small companies could expect to receive a fine of between £540,000 and £2.8m.
 
According to the current guidelines for corporate manslaughter, fines will “seldom be less than £500,000 and may be measured in the millions of pounds”. To date however, only one of the eight successful corporate manslaughter prosecutions has attracted a fine of £500,000 or more.
 
The review is taking place in part over concerns that some penalties imposed have been too low, particularly with large organisations convicted of the most serious offences.
 
Sentencing levels for lower level offences are unlikely to change, according to the council, because they are seen as already proportionate.
 
The consultation states: “The council has adopted within the guideline the established principle that the fine should be sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with legislation and achieve a safe environment for workers and members of the public.”
 
The new guidelines, which will apply only to England and Wales, will bring sentencing of safety-related offences into line with environmental crimes, with tiered penalties for different sizes of organisation, adjusted for level of harm risked and culpability.
 
The consultation comes against the background of a Court of Appeal case in January that dismissed appeals by Network Rail and Sellafield to have fines reduced for health and safety and environmental offences.
 
Judges in the High Court stated the importance of identifying a level of fine that takes the financial circumstances of the offender into account. Network Rail’s fine of £500,000 for a collision at an unmanned level crossing, which caused serious injuries to a child, and Sellafield’s fine of £700,000 for disposing of radioactive waste at a landfill site were deemed to be appropriate given the companies have turnovers of £6.2bn and £1.2bn respectively. 
 
Sentencing Council member Michael Caplan QC said: “We want to ensure that these crimes don’t pay. They can have extremely serious consequences and businesses that put people at risk by flouting their responsibilities are undercutting those that maintain proper standards and do their best to keep people safe.
 
“Our proposals will help ensure a consistent approach to sentencing, allowing fair and proportionate sentences across the board, with some of the most serious offenders facing tougher penalties. This is a consultation: we are interested in hearing feedback on our proposals so we can develop sentences which people understand and have confidence in.”
 
In addition to concerns that fines have been too low, the council says the reforms are being introduced due to a lack of comprehensive guidance for sentencers. While there is a guideline covering corporate manslaughter and fatal health and safety offences, there is no specific guidance on sentencing non-fatal health and safety offences.
 
The council said the majority of judges and magistrates seldom deal with health and safety and corporate manslaughter cases, and therefore lack experience in sentencing. Existing guidance also only covers offences committed by organisations, not individuals.
 
Under the proposals, individuals guilty of health and safety offences will face either a fine based on a proportion of their weekly earnings or up to 18 months in prison for the most serious cases.
 
In what will become a far more detailed and comprehensive set of guidelines than those currently in place, offending companies will be placed in one of four bands: micro, with a turnover of up to £2m; small, with a turnover of between £2m and £10; medium, a turnover of up to £50m; and large, with a turnover of more than £50m.
 
The proposals will see judges ascertain three pieces of information before they decide upon a fine, the first being “seriousness of harm risked” – with a fatality usually falling in the highest of the four categories – based on seriousness and likelihood of harm. Judges will also be asked to consider the level of culpability, again with four categories ranging from low to very high.
 
Once the judge has information on turnover, and has taken into account the two factors above, they will be able to ascertain the starting point. Adjustments will then be made for aggravating and mitigating circumstances.

 

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