This guide was last updated in January 2018. It is based on the law of England and Wales unless otherwise stated.
The Definitive Guideline was issued by the Sentencing Council partly in response to continued public disquiet that sentences passed down to organisations and individuals for the most serious offences of this type had been too low.
The basic structure of the Definitive Guideline is tariff-based with specific starting points and ranges. Courts have to adopt a step-by-step approach to sentencing which involves:
An assessment of the overall seriousness of the offence (the offence category), by reference to the degree of culpability and risk of harm, as opposed to actual harm caused
The level of culpability is extremely important and provides fertile ground for argument/negotiation with the prosecution (see the G4S Cash Solutions Ltd case and the Whirlpool case).
It should not be forgotten that obligations in relation to health and wellbeing exist in tandem with those relating to safety and preventing accidents, with the penalties for breaches of these obligations the same as those for safety breaches (see Employers cannot pay lip service to workplace mental health issues).
This will give the court a starting point and range of possible fines
Different starting points and ranges apply depending on the size of the organisation, determined by reference to turnover or equivalent. For example:
- large organisations (those with a turnover or equivalent of £50 million or more) now face fines with a starting point of £4m and range of £2.6m to £10m on conviction for the most serious breaches of health and safety legislation. Even larger fines are likely where an offending organisation's turnover or equivalent very greatly exceeds £50m. Note that there has been criticism that the guideline offers little advice to judges when sentencing companies whose turnover "very greatly exceeds the thresholds for large organisations" (see the Whirlpool case);
- because fines are a function of turnover, they could have a disproportionate impact on companies where turnover is very large compared with the bottom line. However, pre-tax profit is relevant at a later stage of sentencing to ensure the fine is proportionate;
normally, only information relating to the organisation before the court will be relevant, unless "it is demonstrated to the court that the resources of a linked organisation are available and can properly be taken into account". For example when sentencing Tesco Maintenance Limited (TML) (a subsidiary of Tesco plc) for health and safety breaches leading to a fall from height, the court took into account the fact that not only was TML a subsidiary of Tesco plc but it also worked solely for Tesco plc making it essentially part of Tesco plc and so in that case allowing the court to sentence on the basis of the much higher Tesco plc turnover.
Mitigating/aggravating features must be considered.
Other features justifying an adjustment must be considered
These may include:
- whether the organisation's profit margin is large or small. With a turnover of £3.8 billion, Essar Oil was considered a very large organisation. However, on sentencing for an explosion at its Stanlow refinery which resulted from safety process failings, the court adjusted that downwards to a large organisation in view of its low profit margin;
- any economic benefit derived from the breach. In passing sentence at Aylesbury Crown Court against Thames Water, His Honour Judge Sheridan was reported to have said that "it should not be cheaper to offend than to take appropriate precautions";
- whether it is a charity or public body. Havering Borough Council was fined £500,000 when a worker was badly injured, which included a discount for being a public body. However, note that appeal arguments that this reduction should have been 50% failed;
- whether the organisation has assisted the prosecution or entered an early guilty plea. See also the Sentencing Council's Guideline for Reduction in Sentence for a Guilty Plea.
The fine should be fair and proportionate and meet the objectives of punishment, deterrence and removal of gain
In some cases, there may be justification for the fine putting the offender out of business.
Whether compensation and ancillary orders should be imposed
These may include:
- publicity orders (if convicted of corporate manslaughter – see the Monovan Construction Ltd case);
- hygiene prohibition orders.
In determining an organisation's size, the court will require it to provide significant financial information to the court so that an accurate assessment of its financial circumstances can be made. Information required will include:
- directors'/partners' remuneration/drawings;
- loan accounts;
- pension provisions;
- in certain circumstances, resources of a linked organisation may also be taken into account.
Failure to produce the required financial information may result in an assumption that any fine imposed by the court can be paid.
With fines in health and safety cases now directly linked to the risk of harm as a result of the failings rather than, as was usually the case previously, any actual harm caused, the Definitive Guideline marks a distinct shift in focus on sentencing. As expected, it has resulted in a huge shift in the punishment for offences, with hefty fines becoming the norm and immediate custodial sentences for individuals at fault on the rise.
In 2011, the £1m fine of a major retailer for asbestos exposure was considered exceptional. In 2014, fines for Network Rail and Sellafield of £500,000 and £700,000 respectively were subject to an appeal which, whilst ultimately unsuccessful, reflected the prevailing view at that time that these were large fines, even for significant corporate entities.
Under the Definitive Guideline fines of this level, and indeed many times greater, are becoming commonplace. Since February 2016, there have been 34 fines in excess of £1m. Notably, these fines are no longer reserved for cases involving a fatality: for example, Merlin Attractions Operations Ltd was fined £5m after passengers were injured in a rollercoaster collision, while Tesco Stores was fined £5m for a breach where no actual harm resulted. Moreover, comments by the judiciary suggest that fines of up to 100% of pre-tax profits could be imposed in appropriate cases - even if that results in tens or hundreds of millions of pounds; and even if the result is that, in the most serious of cases, the organisation goes out of business.
The Definitive Guideline also includes a similar step by step approach to sentencing individuals convicted of related offences which, again, have resulted in a significant rise not only in the sentences handed down but in the number of individuals prosecuted in the first place. Many of the sentences handed down have been for immediate custody.