UK: Guidelines For Sentencing Corporate Entities Which Cause Death

Last Updated: 15 June 2010
Article by Howard Watson

On 27 October 2009 the Sentencing Guidelines Council ("SGC") published their long awaited Consultation Guideline. The SGC has stepped back from the headline proposal of the Sentencing Advisory Panel ("SAP") that the fine should be linked to turnover. This bulletin considers the new proposed Guidelines which are now subject to consultation until 5 January 2010. Thereafter, once the responses have been considered, final Guidelines will be published for use by the Crown Court.

Sentencing corporate entities for causing death following a prosecution under the Corporate Manslaughter and Corporate Homicide Act 2007 or the Health and Safety at Work etc Act 1974 ("HSWA") has been in the headlines ever since the SAP proposed the fine should be linked to turnover. The SAP advised the SGC that in cases involving prosecution for corporate manslaughter involving a gross breach of a duty of care creating a very high risk of death, the starting point should be 5% of annual turnover with a range of between 2.5% and 10%.

The SGC, however, has concluded that a turnover approach could inadvertently risk an unfair outcome and would create an incentive to corporates to adjust their corporate structure to seek to reduce the fine. Another reason given is that a turnover approach would be difficult to apply to public bodies.

In its place broader guidelines are proposed. Against the background that the level of fine must be such that it is punitive and sufficient to have an impact upon the defendant the Guidelines recommend:-

  • The appropriate fine in the case of a conviction for corporate manslaughter "will seldom be less than £500,000 and may be measured in million of pounds"; and
  • In the case of a conviction for causing death under the HSWA "The appropriate fine will seldom be less than £100,000 and may be measured in hundreds of thousands of pounds or more".

The reason for the wide band for cases resulting in a conviction under the HSWA is because it is recognised the range of seriousness of offences causing death prosecuted under the Act is likely to be much greater than those cases prosecuted under the Corporate Manslaughter legislation, which is reserved for the most serious breaches.

In the usual way a plea of guilty will attract a reduction in the sentence (of up to 1/3).

The broad wording of the Guidelines, assuming they are adopted, means that in practice the current convention of the prosecution and defence referring the judge to fines in other similar cases is likely to continue. Until cases prosecuted under the Corporate Manslaughter legislation reach sentencing, the real impact of these Guidelines is unlikely to be known.
The Guidelines seek to provide a route map for judges to follow in seeking to determine a suitable fine. The Guidelines state that the seriousness of the offence should ordinarily be assessed first by considering:-

  • How foreseeable was serious injury?;
  • How far short of the applicable standard did the defendant fall?;
  • How common is this kind of breach in this organisation?; and
  • How far up the organisation does the breach go?

Having determined the seriousness the judge should then consider aggravating and mitigating circumstances. These will include:-

Aggravating

  • More than one death, or very grave personal injury in addition to death;
  • Failure to heed warnings or advice, whether from officials or employees or other persons;
  • Cost-cutting at the expense of safety;
  • Deliberate failure to obtain or comply with relevant licences, assessment or observation by independent authorities with a safety responsibility; and
  • Injury to vulnerable persons.

Mitigating

  • A prompt acceptance of responsibility;
  • A high level of co-operation with the investigation, beyond that which will always be expected;
  • Genuine efforts to remedy the defect;
  • A good safety record; and
  • A responsible attitude to safety, such as the commissioning of expert advice or the consultation with employees or others affected by the organisation's activities.

The Guidelines recognise that the fact that an organisation is a large one does not in itself aggravate the offence, and that a large organisation may be more at risk of committing an offence than a small one simply because it conducts many more operations. That recommendation, if implemented, will remove the potential injustice that the turnover approach to sentencing would have had which would not have recognised the greater risk that larger organisations face. However, the Guidelines seek to achieve a balanced approach with the warning that:-

"In some instances, a large organisation may have less excuse for not dealing properly with matters affecting safety, since it may have greater access to expertise, advice and training resources".

The size of an organisation is relevant as to its means and the Guidelines recommend the court should request the company's published accounts for a three year period, including the year of the offence. In considering the financial consequences of a fine, the Guidelines specifically state that any effect upon shareholders will not normally be relevant. The SGC has taken the view that those who invest in and finance a company take the risk its management will result in financial loss.

Finally, the Guidelines recommend that in the case of a conviction for corporate manslaughter publicity orders requiring the publication of the fact of conviction, specified particulars of the offence, the amount of the fine and the terms of any remedial order should ordinarily be imposed. The purpose of the publicity order is to ensure the conviction becomes known to shareholders and the Judge will be required to consider whether, in addition, a statement on the defendant's website is required.

These Guidelines represent a more balanced approach to sentencing corporate entities for the most serious health and safety breaches which cause death. They leave a great deal of discretion to the sentencing judge and as there has never been a tariff level of fine for serious offences, the fines imposed in individual cases will continue to depend upon the particular facts of the case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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