FEATURE
LEGISLATION FOCUS
Jonathan Grimes, health and safety specialist from Kingsley Napley LLP, take a look at the new health and safety industry guidelines to be effective from February this year.
At the end of last year the Sentencing Council published new guidelines on the sanctions to be imposed on companies found guilty of corporate manslaughter, health and safety and food safety and hygiene offences.
The guidelines will not apply in Scotland. However, as most health and safety laws apply across the UK they may well be considered by the Scottish courts.
The new guidelines cover the most commonly sentenced health and safety offences and food safety offences. Offences that come under the guidelines are very varied and could include a building firm that causes the death of an employee by not providing the proper equipment for working at height or a restaurant that causes an outbreak of e. coli poisoning through unsafe food preparation.
GREATER CONSISTENCY Previous guidelines only covered corporate manslaughter and health and safety offences causing death. Since they are more comprehensive the new guidelines should provide for greater consistency in sentencing going forward.
Companies with a turnover of more than £50M can expect to be fined up to £20M for corporate manslaughter offences and up to £10M for the most serious health and safety breaches. For “micro” organisations, with a turnover of up to £2M, convicted of an offence of lower culpability, the starting point is £300,000 with the range beginning at £180,000.
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The existing corporate manslaughter guidance says that the “appropriate fine will seldom be less than £500,000 and may be measured in the millions of pounds”. In the few cases sentenced since the corporate manslaughter offence came into force, fines have tended to fall short of the minimum.
A THOROUGH APPROACH The new guidelines require the court to adopt a more structured approach. Thus, the court will start by considering how serious the harm is and will then take a financial starting point based on the annual turnover of the business which has caused the harm. After this, the court will consider mitigating and aggravating factors. The impact of any fine will be viewed in the light of other considerations, including proportionality and the organisation’s ability to improve its standards to comply with the law. A fine within a specified range will then be applied.
In light of the above, a convicted defendant organisation will be required to provide to the court comprehensive accounts for the last three years in order that its financial status can be accurately assessed. Companies and partnerships must provide annual accounts and courts will pay particular attention to turnover, pre-tax profits, assets and directors’ remuneration, loan accounts and pension provision. Should a court not be satisfied that sufficient reliable information has been provided it may infer that the offender can pay any fine.
Individual company directors found guilty of "consent, connivance or neglect" in relation to the offence will face potentially unlimited fines and prison sentences of up to two years.
The Sentencing Council says that fine levels should be large enough to have an economic effect that would bring home to an organisation the importance of operating in a safe environment.
UNWANTED SIDE EFFECTS Clearly, it will take time after February to assess the new guidelines' real effects particularly- whether the new fine levels do act as a deterrent to companies cutting corners in health & safety as the authors intend. One unanticipated consequence of an increase in the range of fines is that companies may choose less often to plead guilty and more often to defend allegations in order to avoid severe financial penalty. Where a company is likely to be sentenced to a very significant fine whether or not it pleads guilty, it may be more attracted to the prospect of defending the allegation - even on quite poor odds - than it would have been in the past.
Whatever the effects of the new guidelines, companies need to be prepared. Evidence of having correct procedures in place will no longer be considered a mitigating factor. The new guidelines are designed to hit companies hard when breaches occur.
www.kingsleynapley.co.uk 19
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