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Corporate manslaughter and health and safety: fines to increase

22/01/2015

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United Kingdom

The Government has recently launched a consultation regarding the level of fines for corporate manslaughter and health and safety offences.

The Government has recently launched a consultation regarding the level of fines for corporate manslaughter and health and safety offences.  The consultation is the first step towards fulfilling the Government's desire significantly to increase the level of fines, as well as consistency, for corporate manslaughter and health and safety related offences.

The same old story

The Corporate Manslaughter and Corporate Homicide Act 2007 (the "Act") made it onto the statute books after years of lobbying for an effective criminal deterrent following a number of failed prosecutions arising out of high profile disasters such as the Herald of Free Enterprise in 1987.  Its primary purpose was to make it easier to obtain manslaughter convictions against companies, particularly large companies, which were practically impossible to convict under the old law of corporate manslaughter.

The Act was followed by sentencing guidelines which set out the Government's intention for significant fines to be imposed on companies found guilty of corporate manslaughter or for breaches of health and safety legislation which led to someone's death.  The guidelines noted that for corporate manslaughter the "appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds."  In similar fashion, for health and safety offences which caused someone's death, the guideline stipulated that "the appropriate fine will seldom be less than £100,000 and may be measured in hundreds of thousands of pounds or more."

The Act and the sentencing guidelines have largely been ineffectual.  It will soon be seven years since the Act came into force and yet there have been relatively few prosecutions under the Act and none of any truly large organisations[1].  In those cases where there have been convictions, fines have been relatively low and none have thus far exceeded the suggested minimum of £500,000.  Fines for health and safety offences causing death do regularly exceed £100,000, but there have been very few truly significant fines[2].

Try again

Against this background and growing consternation at the absence of eye-watering fines which will shock businesses into paying closer attention to their health and safety obligations, the Government has decided to try to reinvigorate prosecutors and the Courts by introducing fresh new sentencing guidelines.  The intention again is to increase the level of fines for corporate manslaughter and health and safety related offences, whilst also seeking to achieve a better level of consistency in sentencing.

The draft guidelines link sentencing to the financial means of a company, with the company's turnover being the starting point for a fine.  The guidelines set out a range of fines which will be appropriate, and an appropriate starting point for the fine.  By way of illustration, for serious corporate manslaughter offences:

Turnover of company

Range for fine

Starting point for   fine

More than £50m

£4,800,000 - £20,000,000

£7,500,000

£10m - £50m

£1,800,000 - £7,500,000

£3,000,000

£2m - £10m

£540,000 - £2,800,000

£800,000

Under £2m

£270,000 - £800,000

£450,000

 

Where a company's turnover significantly exceeds £50m, it is possible that the Courts will move beyond the range suggested in the table above.

A similar system is also proposed for offences under health and safety legislation, with the maximum range for companies with a turnover of more than £50m running between £2.6m - £10m and with a starting point of £4m.

Conclusion

In many ways the new dawn expected by the introduction of the Act and new sentencing guidelines has failed to materialise.  There have been relatively few corporate manslaughter prosecutions, none of large organisations, and the fines for corporate manslaughter and health and safety offences leading to death have not been at the levels anticipated.

These failures have not gone unnoticed and the introduction of the draft sentencing guidelines is meant to address this.  Certainly, if they are implemented in their current form then one can expect fines to increase, especially for companies with large turnovers.  The consultation closes on 18 February 2015[3].

Rhys Griffiths is a partner in our Dispute Resolution Group.  If you would like to discuss any of the issues highlighted in this article then please do not hesitate to contact him at rhys.griffiths@fieldfisher.com or 020 7861 4546.


[1] A link to our tracker of all prosecutions under the Act.

[2] A link to our tracker for health and safety fines.

[3] The consultation.

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