Tougher sentencing guidelines for health and safety offences in England and Wales take effect from 1 February 2016.
The new arrangements will apply to all cases heard after that date, irrespective of when the offence was committed.
Among the significant changes being made is a move from penalties based on profits to penalties linked to turnover. The move is designed to stop companies appearing smaller to the Courts than they in fact are, by making only make a small profit on paper, whilst still having a very large turnover. From 1 February, the Courts will be taking turnover into account when deciding sentencing.
In a nine-stage process, the Courts will have to consider issues including aggravating and mitigating factors, levels of culpability and harm. This process then dictates the punishment.
Offending companies will be placed in one of four bands depending on turnover:
- Micro – with a turnover of up to £2 million
- Small – a turnover of between £2million and £10million
- Medium – up to £50million
- Large – more than £50million
The rise in fines under the new rules is substantial. Take, as an example, the starting threshold recommended for all corporate manslaughter convictions which was previously £500,000.
From 1 February, fines for a category A (high culpability) offence committed by a large organisation will range between £4.8million and £20million. Meanwhile, medium sized companies, similarly found guilty, could be looking at a fine of between £1.8million and £7.5million, whilst small companies could face a fine of between £540,000 and £2.8million.
Jeremy Sirrell, a specialist in Health and Safety Law at Palmers said: “The changes are designed to bring greater consistency to penalties imposed by Courts across the country and to comparable businesses. The potential for higher penalties is in line with government policy and is designed to encourage all employers to effectively manage and comply with their duties.”
He continued: “Another significant change, is that the guidelines specifically take account of exposure to risk of harm. Where previously a sentence has reflected the outcome of an offence, from February the fact of the “exposure” to the risk of harm will be considered, whether or not an injury has occurred. For example, where an employee has fallen off a ladder and suffered minor injuries, the guidelines could categorise this as a risk of death rather than looking at the actual injury e.g. a broken wrist.”
Jeremy added “The new sentencing guidelines have the potential to prove very costly to business when you consider that every year over 600,000 workers are injured in workplace accidents. Businesses should be motivated to ensure their health and safety policies, procedures and management programmes are fit for purpose. Their risk assessments should be thorough and complete with action taken to make improvements where these are identified as necessary.”