Where now for the future of sentencing guidelines?

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With new sentencing guidelines for safety offences out for consultation later this year, could we see new a new approach to setting the level of fines?

We have got used to a relatively stable landscape of health and safety sentences. There have been a few subtle changes and a general perception of rising sentences, but nothing sufficient to make headlines and lead directors to say “we really need to get health and safety right to avoid punishment”. However, changes are coming and they could be radical enough to impact on behaviour.

The most significant change in health and safety sentencing in recent years came from the Health and Safety (Offences) Act 2008. This introduced imprisonment for up to two years for mainstream offences under the Health and Safety at Work Act 1974. I don’t think this change impacts preventive behaviour before an accident, although the potential for imprisonment certainly concentrates the mind for my clients when they face investigation.

The other changes came as a result of the introduction of the new corporate manslaughter legislation. That prompted a review of sentencing by the Sentencing Council covering fatal accidents.

Most notably, there was a suggestion in the consultation leading up to those guidelines that fines for corporate manslaughter should be based on a percentage of the defendant company’s turnover. They were looking at a 5% turnover figure for the starting point fine. I took part in that consultation and argued for my clients that its effect would be unfairly punitive on companies operating in low-margin, high-hazard activities, such as construction.

An alternative suggestion of basing a fine on the level of profit – rather than turnover – is also fraught with difficulty. It might seem fairer but should loss-making companies get a free pass from the most serious fines?

The published sentencing guidelines for health and safety offences causing death didn’t include the radical 5% turnover suggestion and adopted a more traditional approach.

But percentage fines are used for other offences. Breaches of competition law carry fines based on a percentage of turnover, which certainly sends the message to boardrooms that compliance with competition law is essential. Many people think it sends the wrong message that a serious breach of health and safety law receives so much less punishment than a decision to fix prices illegally in a tender bid.

It is the job of the Sentencing Council to seek parity across the various criminal offences. They have introduced turnover-based sentences recently for environmental offences. There is a clear trend in their approach, with much higher recommended fine levels for larger turnover organisations.

So, when they come to draft their proposed sentencing guidelines for non-fatal health and safety breaches, are they just going to go for an old fashioned recommendation of levels of fines, with a list of aggravating and mitigating features along the lines we have seen before?

Or will they take the more radical step of prescribing levels of fines based upon a percentage of turnover or profit? Such levels can still be adjusted upwards or downwards by the usual aggravating and mitigating features.

We will know much more in November 2014 when the guidelines will be out for consultation. I expect there will be a recommendation for turnover-based fines and I will be speaking to clients and taking part in that consultation. We will have to wait and see whether the ensuing guidelines change boardroom behaviour, particularly at the largest companies for whom turnover-based fines may have greatest impact.

The learning points for senior management are nothing new – they need to set the right tone at the top and be trained on what the law expects them to do in order to keep themselves and the organisation on the right side of the law.

Dr Simon Joyston-Bechal is the director of Turnstone Law



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