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Corporate manslaughter sentencing guidelines move a step nearer
28 October 2009
The publication of sentencing guidelines for corporate manslaughter and health and safety offences where a death has occurred have moved a step closer.
After a considerable delay, the Sentencing Advisory Panel (SAP) has completed its role in advising the Sentencing Guidance Council (SGC), and published its advice.
In turn, the SGC has published its views by way of a further consultation document – and once that consultation concludes, sentencing guidelines to be used by sentencers will be issued.
The fact the proposed guidelines differ from SAP's advice in the crucial area of linking fines to turnover is of considerable significance.
SAP recommended that fines be linked to a percentage of turnover, but the SGC disagrees, stating that a ’fixed correlation between the fine and either turnover or profit is not appropriate’.
It believes that the circumstances of defendant organisations and the financial consequences of the fine will vary too much, and could lead to companies structured in different ways attracting fines that are vastly different.
The SGC also believes that a fixed correlation might provide ‘a perverse incentive to manipulation of corporate structure’.
In place of a link to turnover, it suggests that a court not only looks at both turnover and profit, but also at assets. It also believes courts should consider the financial effect of the consequences of a fine ‘on the employment of the innocent’.
A court should not consider the effect on shareholders or directors, but should consider whether the level of fine would put the defendant out of business, but it is acknowledged that in some cases ‘this may be an acceptable consequence’.
The SGC does consider the level of fines, and whilst not setting a tariff as such, states that for corporate manslaughter, an appropriate fine would seldom be less than £500,000, and may be measured in £millions.
For Health and Safety at Work Act offences that are shown to have caused death, the appropriate range is between £100,000 and ‘hundreds of thousands of pounds or more’.
As part of the penalty, the Corporate Manslaughter Act allows for the making of a publicity order, and SAP went into great detail in its advice about the size of advertisements ordered and where they should be published.
The SGC’s consultation – whilst seeing such orders as part of the penalty and a deterrence and punishment – is not so prescriptive. Orders specifying content would be made by the judge along with directions about where the public announcement should be made, with the aim of making shareholders and the public aware.
The court may stipulate the form of any newspaper advertisement and the number of insertions required, and that the statement be placed on the defendant’s website for a period of time.
Whatever the final outcome, levels of fines for offences involving death will be much larger than those seen in recent years.
It should not be forgotten that corporate manslaughter prosecutions can be for failings other than those in the field of health and safety. Product liability is an obvious area, but any breach of a duty of care where there is a commercial activity leading to death is likely to trigger an investigation.
Any organisation yet to consider the substantial risk posed by this legislation to its financial wellbeing – and very existence – must sit up and act immediately.
There really is no room for complacency. Shoosmiths has represented many organisations investigated following fatal incidents, and they all have one thing in common: none believed such a tragedy could happen to them.
Don’t be next.
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