The New Sentencing Council Definitive Sentencing Guide :
Health & Safety, Corporate Manslaughter and Food Safety & Hygiene Offences : Part 2
In the first of these two articles on the new Definitive Guideline for sentencing in health and safety offences, we concentrated on the impact of the Guideline with regard to health and safety offences pursuant to the Health and Safety at Work Act 1974 (HSWA); that is ‘routine’ health and safety prosecutions, albeit giving rise to serious injury or death.
We now turn our attention to the impact of the Guideline in relation to the specific offence of corporate manslaughter, pursuant to the Corporate Manslaughter and Corporate Homicide Act 2007 (CMHA).
Accordingly, an initial distinction is required in the sense that the Guideline, by definition, deals with HSWA offences resulting in death (or serious injury), but it also deals with sentencing in regard to the specific offence of corporate manslaughter, as created by the CMHA. Experience has shown that albeit the CMHA was specifically enacted with the intention of increasing the number of prosecutions for a specific offence of manslaughter arising out of a death in the workplace or as a result of a manifestly unsafe system of work, the numbers of such prosecutions remain low. Moreover, the distinction between corporate manslaughter (as a separate and distinct offence) and health and safety offences causing death or serious injury suggests penalties for the former of an order of magnitude above the penalties for the latter.
This latter observation is, to a large extent, supported by the initial page of the Guideline, which provides for a range of fines for corporate manslaughter of between £180,000 to £20 million.
This compares to a similar fine range of £50 to £10 million in the context of HSWA offences (considered in our initial article).
Similar to the approach indicated in the Guideline with regard to HSWA offences, the Court is required to go through a number of stages or steps to arrive upon a suitable and proportionate fine in regard to any offence of corporate manslaughter.
Definitive guideline : Corporate manslaughter offences and sentencing
We will, as we did in our initial article, consider each stage in turn:
Stage 1 : Determining the seriousness of the offence (culpability and harm)
Readers will recollect that in the context of the Guideline with regard to HSWA offences, the Court was required to consider level of harm and level of culpability. In the context of corporate manslaughter, the Guideline indicates, from the outset, that such an offence, by definition, imports very serious levels of both harm and culpability; "every case will involve death and corporate fault at a high level" (Definitive Guideline, page 22), thus, the Court is required to approach matters in the context slightly differently and ask itself the following questions:
How foreseeable was serious injury? – predictably, the Guideline provides that the more foreseeable serious injury was, the more serious the offence. In this regard, a failure to heed appropriate advice from the regulator or information derived from ‘near misses’ or warnings from employees are all significant failings by an offender.
How far short of the appropriate standard did the offender fall? – the Guideline suggests that falling far short of the appropriate standard implies a high level culpability, which, to an extent, is (with respect) a statement of the obvious. Additionally, one of the cardinal ingredients of the offence itself is operating a system of work which falls "far short" of the required standard, thus, this requirement is somewhat circular (it is submitted) and, therefore, likely to arise (arguably) in almost all cases of corporate manslaughter.
How common is this kind of breach within the organisation? – in essence, the Court is required to determine if the incident arose from an isolated incident of non-compliance or was merely an example of a wider culture of non-compliance; the latter, obviously, is more serious. Thus, an organisation’s historic relationship with the regulator and any historic observations by the regulator as to bad practice will be important. Similarly, presumably, any other failings within the system of work highlighted by the regulatory investigation following the incident giving rise to the charge(s) will be of relevance.
Was there more than one death, or a high risk of further deaths, or serious personal injury in addition to death? – obviously, the greater the number of deaths, or the higher the risk of death generally, the more grave the offence.
Where the answers to the above questions suggest a high level of culpability, ie – where the answers in the majority of the questions indicate the higher level of culpability, the offence is a "Category A" offence.
Conversely, where most of the answers to the above questions indicate a low level culpability, this represents a "Category B" offence.
Immediately, one can anticipate argument between prosecution and defence as to the factual circumstances, or the effect of a certain piece of evidence on one or more of these questions. However, in theory, the Court should be able to determine whether it is dealing with a Category A offence or a Category B offence.
Stage 2 : Starting point (for fine) and category range
Consistent with the approach which was seen in the first of these two articles, having categorised the seriousness of the offence (albeit using a slightly different process from the HSWA offences Guideline), the Court is then required to consider where that level of seriousness of offence falls within an overall matrix of offences, having regard to the (financial) size of the organisation concerned.
As with the HSWA offences Guideline, the offending organisation is required to provide details as to its financial circumstances in the appropriate format. In the context of commercial organisations, as before, this is via the medium of audited accounts, dealing, usually, with the 3 preceding years of trading. Again, failure to provide this information sets up an inference on the part of the Court that the organisation concerned can pay “any appropriate fine”.
In the context of public sector organisations, as before, the Annual Revenue Budget (for the whole organisation) is the relevant source of financial information. The same advantages and disadvantages to this approach (see previous article), therefore, subsist.
Having provided these introductory comments, the Definitive Guideline then sets out the following guidance in terms of the categorisation of offences and, therefore, the range of fines to be expected. If only in terms of illustrating the considerable level of fines at the “top end” of this range is worthy of reproduction:
Large organisations - Turnover more than £50 million
Category A offences will attract a starting point of £7.5m with a range of £4.8m - £20m. Category B offences will attract a starting point of £5m with a range of £3m - £12.5m.
Medium organisations - Turnover between £10 - £50 million
Category A offences will attract a starting point of £3m with a range of £1.8m - £7.5m. Category B offences will attract a starting point of £2m with a range of £1.2m - £5m.
Small organisations - Turnover between £2 - £10 million
Category A offences will attract a starting point of £800,000 with a range of £540,000 - £2.8m. Category B offences will attract a starting point of £540,000 with a range of £350,000 - £2m.
Micro organisations - Turnover up to £2 million
Category A offences will attract a starting point of £450,000 with a range of £270,000 - £800,000. Category B offences will attract a starting point of £300,000with a range of £180,000 - £540,000.
Note : In the context of "very large organisations" (presumably with turnover above £50 million), the Guideline specifically indicates that the Court may move outside the suggested range to “achieve a proportionate sentence” and, in this context, the comments below as to the purpose of sentence are obviously relevant.
As with the HSWA offences Guideline, the Court is then required to consider the issue of specific aggravating and specific mitigating features in regard to the offence. The list provided within the Guideline in this regard is the same as that provided in the context of HSWA offences, however, for ease of reference, it makes sense to set out the same below:
Specific aggravating features are as follows:
Previous convictions, particularly those taking place relatively recently and for similar or identical offences.
Cost-cutting at the expense of safety.
Deliberate concealment of illegal nature of activity.
Breach of any Court Order.
Obstruction of justice.
Poor health and safety record (presumably, not confined to offences as such, but encompassing warning, prohibitions and improvement notices served by the enforcement authority).
Falisification of documentation or licences.
Targeting vulnerable victims.
Specific mitigating features include:
No previous or no relevant recent convictions.
Evidence of steps taken voluntarily to remedy the problem.
High level of cooperation with the investigation, beyond that which will always be expected in the context of a health and safety investigation.
Good health and safety record.
Effective health and safety systems in place.
Stages 3 and 4 : Stepping back and reflecting
Readers will recollect that the Court was required to undertake a similar exercise with regard to HSWA offences (see earlier article).
Stage 3 : Proportionality
As before, the Court is required to ensure that the overall fine to be imposed is proportionate to the overall means of the offender. In this context, given the differing nature of the offence (see above), somewhat different narrative considerations are set out in the Guideline and these are worth noting, specifically:
"Fines cannot, and do not, attempt to value human life in money. The fine should meet the objectives of punishment, the reduction of offending though deterrence and removal of gain derived through the commission of the offence. The fine 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."
In short, it is submitted, an organisation convicted of the offence of corporate manslaughter can, simply by virtue of the nature of the offence, expect to be fined a very considerable amount of money. The relevant ranges of fines (see above) indicate the position in this regard immediately. The very smallest fine for the very smallest "micro" organisation for an offence of this nature starts at £300,000, with an overall range of £180,000 to £540,000.
Obviously (see below), some adjustment can be expected to reflect profit as a factor of turnover, but, the starting point for fines in the context of this offence is to imply very significant sums of money. Equally, at the other end of the spectrum, an organisation with a turnover or budget in excess of £50 million can "expect" a fine of around £7.5 million (note : subject to other extenuating circumstances and factors).
As part of the "stepping back" process, as with the HSWA offences discussed in our first article, the Court is required to consider the intrinsic business of the organisation; that is whether it achieves a significant or less significant return on turnover in terms of net profit.
Equally, the Court is also required to take into account the power to allow payment of any fine by installments, conceivably, over a number of years. It is submitted that this factor, if anything, mitigates in favour of higher, rather than lower, fines because it enables the Court to consider a fine (a) consistent with the word of the Definitive Guideline (see above) and (b) which will continue to have an effect upon the offender over a number of years, thus, arguably, achieving the end of bringing home the effect of the offence to both shareholders and directors for an extended period of time.
Stage 4 : Other factors
In this context, the Court is required to consider the impact of the fine, both within the organisation (upon employees, etc) and outside the organisation (in terms of the local community). This is, once again, the same process as required at Stage 4 of the HSWA offences Guideline.
Moreover, as before, in the context of public sector organisations, the Court is required to "normally" "substantially reduce" the fine, if the organisation is able to demonstrate the proposed fine will have a "significant impact" on the provision of their services. As indicated in our previous article, this enshrines a right for public sector organisations to expect a reduction in the fine as compared to that levied upon a private sector entity. However, when one is considering significantly greater fines (for the offence of corporate manslaughter) and the general environment of austerity which public sector organisations operate within, it remains to be seen what the real impact of this reduction measure actually is.
Stage 5 : Other factors for reduction – assistance to the prosecution
For the reasons which were discussed in our first article, the impact of this measure remains open for debate in most normal cases.
Stage 6 : Reduction for guilty pleas
As previously discussed, section 144 of the Criminal Justice Act 2003 requires the Court to reduce any proposed fine to take account of a guilty plea with, in particular, a suitably early guilty plea being of the most impact.
In circumstances where a charge of corporate manslaughter is being laid against a Defendant organisation, together with, possibly, other charges under the HSWA, specific tactical considerations will come into play
For example, the Defendant will need to consider whether there is a viable discussion to be had in terms of pleas to HSWA offences in the context of a possible decision not to proceed with the corporate manslaughter offence. On the other hand, experience suggests that, currently, regulators are only considering corporate manslaughter as a charge in the most obvious of cases, thus, the opportunity for discussion and/or reduction of charges is likely to be minimal and time will be of the essence, in a sense, in terms of entry of a guilty plea to ensure maximum discount of sentence in due course.
Stage 7 : Compensation and ancillary orders
As with the HSWA offences, the Court is required to consider, in the round as it were, the question of Ancillary Orders in terms of the proposed fine to be imposed. In many ways, the same considerations arise with regard to the offence of corporate manslaughter as arose previously in the context of HSWA offences; notably, the fact that Compensation Orders are unlikely, in most instances, because of the fact that this is an aspect explicitly regarded as a matter for Civil Courts’ consideration.
However, readers may recollect that in the context of corporate manslaughter, the additional factor of Publicity Orders (see section 10 Corporate Manslaughter and Corporate Homicide Act 2007) arises. Thus, at Stage 7, the Court will also need to consider this additional factor/potential penalty.
The Guideline provides, in the context of Publicity Orders, that:
"A Publicity Order should ordinarily be imposed in a case of corporate manslaughter…"
Thus, in terms of any offence of corporate manslaughter, an offender can now ‘expect’ to be required to publish (at their own expense):
The fact of conviction.
Specified particulars of the offence.
The amount of any fine.
The terms of any remedial order (see below).
The Guideline goes on to specify that:
"The (Publicity) Order should normally specify the place where public announcement is to be made, and consideration should be given to indicating the size of any notice or advertisement required. It should ordinarily contain a provision designed to ensure that the conviction becomes known to the shareholders, in the case of companies and local people in the case of public bodies. Consideration should be given to requiring a statement on the offender’s website. A newspaper announcement may be unnecessary if proceedings are certain to receive news coverage in any event, but if an order requires publication in a newspaper, it should specify the paper, the form of announcement to be made and the number of insertions required… the prosecution should provide the Court in advance of the sentencing hearing, and should serve on the offender, a draft of the form of Order suggested and the Judge should personally endorse the final form of the Order."
Readers should also be aware of the power within section 9 of the Corporate Manslaughter and Corporate Homicide Act 2007 in terms of Remediation Orders.
As discussed in our initial article, in most instances, offenders will be required to have taken appropriate remediation steps before the sentencing hearing, or will risk not having the benefit of significant mitigation if they have not done so. However, in default of that, and upon application by the prosecution (only) a Remediation Order will likely be made.
Thus, the potential costs of any proposed remediation steps will need to be considered, and there is a potential further area of dispute between the parties as to the ambit of any proposed Remediation Order.
Stages 8 and 9 : Totality principle and reasons
As indicated in our initial article, the Court is required to consider the totality of penalty (in the context of multiple charges) and, perhaps of more interest in the context of corporate manslaughter, the Court is required, as a final stage of entencing, to give reasons for and explain the effect of the sentence.
The said reasoning is likely to be of potential assistance in terms of future cases of a similar character (in terms of taking a view as to likely fines), as well as any possible appeal as to sentence.
At the risk of stating the obvious, the likely fines to be imposed in the context of an offence of corporate manslaughter are very considerable. Practitioners in this field have long known that this offence was likely to bring with it a substantial monetary impact, not least because the “shape” of the offence was, from its earliest inception, one designed to impact in monetary terms, rather than in terms of custodial sentences upon individual directors.
In that regard, in appropriate cases, the Court is specifically empowered to impose a fine which could put the company out of business. This has previously been endorsed as an appropriate approach in Cotswold Geotechnical Holdings and, therefore, it is of limited surprise in the context of the new Guideline.
The new Definitive Guideline now provides a detailed manifesto for the imposition of significant fines and, moreover, indicates, in the starkest terms, that the size of potential fines will be very considerable indeed. Public sector organisations can take (some) comfort from the fact that there is a specific envisaged reduction in fines for them, provided they can adduce appropriate evidence of the impact of such fines upon the provision of services generally.
Perhaps of more concern to public sector organisations is the obvious reputational risk imposed by Publicity Orders and the wording of the Guideline which indicates that, generally speaking, such Orders would be the norm in circumstances of a conviction.
The figures considered in the Guideline in terms of fines underline immediately the need to obtain suitable, expert, legal advice in circumstances of any such offence being investigated or contemplated by the regulator.
Given that regulators are also (now) empowered to charge for their regulatory investigations, there can be no doubt that no stone will be left unturned, as it were, in terms of the investigation of incidents in the workplace involving serious injury or death. Moreover, in that context, we would recommend the obtaining of appropriate expert legal advice from the earliest possible moment, given the extent of penalties which are now contemplated, as discussed within these articles.
As with our initial article, if readers would like a copy of the new Definitive Guideline, or a discussion of the position generally, they are welcome to contact the writer via his email address.