The Sentencing Council's latest amendments to Very Large Organisations (VLOs) sentencing under the sentencing guidelines for Health and Safety, Food Safety, Food Hygiene, and Corporate Manslaughter offences, taking effect from 1 June 2025, demonstrate the incremental nature of regulatory change. For organisations with significant turnover, these changes signal higher financial exposure and the need for enhanced compliance strategies.
While the changes appear significant on paper, a closer examination suggests a more nuanced picture of these amendments, which codify existing judicial practice rather than introduce any significant transformation.
How are VLOs sentenced?
The current sentencing framework operates through a structured step-by-step process that begins with categorising organisations by turnover: micro (up to £2 million), small (£2 million-£10 million), medium (£10 million-£50 million), and large (over £50 million). However, there's a fifth, and more fluid category - VLOs whose turnover "very greatly exceeds" the £50 million threshold.
The sentencing process follows a systematic approach, in Step 1, Courts determine culpability (high, medium, or low) and harm (categories 1-3) based on specific factors outlined in each guideline. In Step 2, Courts use these assessments alongside organisational size to establish starting points and ranges from sentencing tables. For large organisations, these tables provide structured fine ranges, but VLOs operate outside this framework. Steps 3-7 then consider proportionality, aggravating and mitigating factors, totality, ancillary orders, and reduction for guilty pleas.
For a VLO, the sentencing guidelines in force before 1 June 2025 stated that "Where an offending organisation's turnover or equivalent very greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence."
This approach to sentencing a VLO recognises that organisations with turnovers very greatly exceeding £50 million cannot be adequately sentenced using standard large organisation parameters. However, there is no formulaic approach to determining how far outside of the fine ranges for large organisations a Court should go in sentencing a VLO.
In all instances, Courts must consider the organisation's overall means, the purposes of sentencing (including punishment and deterrence), and ensure fines are sufficient to "bring home to management and shareholders the need for regulatory compliance." This approach acknowledges that what constitutes an adequate deterrent varies dramatically with organisational scale.
The practical impact is significant as VLO classification can multiply fines several-fold compared to large organisation parameters.
The rationale for increased VLO penalties reflects several policy considerations as larger organisations typically have greater resources for compliance systems, their failures may affect more people, and meaningful deterrence requires fines proportionate to organisational capacity.
However, this can create apparent anomalies - consider two scenarios: a well-managed VLO with exemplary safety systems experiencing an isolated incident due to an unforeseeable equipment failure receives a larger fine than a smaller company that deliberately cut safety corners to reduce costs, purely due to financial capacity rather than culpability.
What are the key changes?
The amended sentencing guidelines introduce a notable language change where the previous guidance stated it "may be necessary to move outside the suggested range" for VLOs, the new guidelines direct that courts "should consider fines outside the range for large companies."
Despite the stronger language, the practical impact may be less dramatic than initially appears. Experienced practitioners know that judges already routinely sentenced VLOs outside large organisation parameters.
Determining VLO status remains complex - the leading authority, R v Places for People Homes Ltd [2021] EWCA Crim 410, established that while there's no "bright dividing line" between large and very large organisations, courts will "know one when they see one."
Recent case law reveals a pattern emerging from this apparent vagueness. Analysis of Court of Appeal decisions since Places for People shows organisations with turnovers below £300 million are unlikely to qualify as VLOs, while those exceeding £400 million probably will.
Despite the lack of definitive guidance on what constitutes a VLO or how exactly to approach sentencing outside the range, no mathematical formula or turnover threshold has been introduced, and the Sentencing Council deliberately avoided creating rigid boundaries in the recent amendments, maintaining that it will still be "obvious" whether an organisation qualifies as a VLO.
In practice, this language change simply steers courts towards consistency, while maintaining the flexibility that has characterised VLO sentencing.
The consultation responses
Consultation responses revealed predictable divisions as prosecutors welcomed the stronger language, defence practitioners raised proportionality concerns, and judges expressed mixed views about maintaining sentencing flexibility. This reflects ongoing tensions about whether corporate penalties should primarily reflect harm caused, deterrent effect needed, or organisational capacity to pay.
The unaddressed challenges
We outline the several long-standing issues that the amendments do not resolve in VLO sentencing which have troubled practitioners.
Financial complexity: Magistrates and judges increasingly need to become sophisticated economic analysts while the sentencing guidelines provide limited tools for that analysis, leading to difficulty in meaningfully assessing VLO financial positions beyond crude turnover figures. A £2 billion turnover tells you little about cash flow, debt obligations, capital requirements, or genuine discretionary income.
In particular, local authorities and charitable organisations, may have high turnover figures that bear no relation to their actual financial capacity or ability to absorb substantial penalties. Unlike private enterprises, their "turnover" often represents pass-through funding rather than genuine economic activity. The sentencing guidelines provide limited flexibility to treat these organisations with sufficient leniency to reflect their fundamentally different operational purposes.
Increased accountability: The Courts are required to pay attention to the emphasis on "bringing home to management and shareholders" the need for compliance. The risk is that the "bringing home" language becomes a default justification for substantial penalties that reflect organisational wealth rather than the seriousness of the underlying conduct.
VLOs operate in different accountability ecosystems than smaller companies. Board oversight, shareholder scrutiny, and media attention create additional layers of consequence that may justify different penalty approaches.
Increased exposure: Large organisations undertake more activities across more locations with more employees, statistically increasing their exposure to regulatory breaches regardless of compliance quality. Should penalty frameworks account for this reality?
Investment impact: VLO sentencing may affect international competitiveness. If UK penalties significantly exceed those in comparable jurisdictions, they may influence corporate location decisions and investment patterns.
What this means for your organisation
The message is clear - size will continue to matter in sentencing.
For VLOs, these changes, which limit the scope of legal argument to keep fines down, signal the continued importance of established best practices and the urgent need for proactive compliance review:
Documentation requirements: Organisations should systematically document their compliance investments, safety culture, and risk management approaches and ensure their safety investments are visible and measurable.
Proportionality arguments: While more challenging than before, legal strategies should robustly challenge the relationship between organisational size and appropriate penalty levels. This requires sophisticated economic analysis and clear articulation of the organisation's actual financial position beyond crude turnover figures.
How to prepare for the VLO sentencing reform
The amendments provide a framework for more principled VLO sentencing, but they don't guarantee it.
The real test won't be immediate changes in penalty levels - which may remain broadly similar - but whether the amendments contribute to more consistent and principled VLO sentencing over time. For practitioners, this represents continuity rather than disruption: the fundamentals of VLO defence remain unchanged, but the framework for presenting arguments about the appropriate approach to sentencing VLOs has narrowed.
While the amendments may represent evolution rather than revolution, given the heightened sentencing landscape for VLOs, organisations should urgently review their compliance frameworks and legal preparedness.
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