21/04/2015
The consultation process concerning new sentencing guidelines for Corporate Manslaughter came to an end on the 18th February 2015. The guidelines aim to ensure the fines levelled by the court for corporate manslaughter convictions are severe enough to create a deterrent impact. The guidelines will also provide greater consistency in the sentencing of unusual cases of corporate manslaughter.
Fines of up to £20 million have may be levied against organisations with a turnover of £50 million plus.
Background to the Proposed Sentencing Guidelines
The Corporate Manslaughter and Corporate Homicide Act (the Act) 2007 is considered a landmark piece of legislation. Prior to its enactment, a company could only be found guilty of manslaughter following the successful prosecution of an individual acting as the ‘controlling mind' of the organisation
When the Act came into force in April 2008, it clarified the criminal liabilities of a company as a separate legal entity in cases where a sever breach of health and safety resulted in a loss of life.
Sixteen cases have now been brought under the Act, including the horrific case of Kayak manufacturer Pyranha Mouldings, which was prosecuted after a worker was trapped in an industrial oven and died of his injuries in 2010.
Commentators are predicting that the number of corporate manslaughter cases will increase under the Act in the future. Standardised guidelines that allow judges to follow clear sentencing procedures will assist the courts in applying fair and just sentences across the board for what are often complex cases with unique factual circumstances.
What the Proposed Sentencing Changes will Mean for Businesses
Although the guidelines make it clear that ‘A fixed correlation between the fine and either turnover or profit is not appropriate’ due to the circumstances of individual organisations varying so much, the courts will be required to take into account the organisation's size when deliberating on an appropriate sentence. The guidelines suggest that the court takes into account three years worth of accounts when deciding the extent of the fine to be issued.
When assessing the financial consequences of a fine the court will be required to take the following into consideration:
- The effect on innocent employees
- The effect on services to the public. Although the guidelines state that public services such as hospitals and police must be treated the same as a private company and suffer punitive fines if their breach causes death, the court may decide to adjust the level of fine and how it is administered if public service and/or safety are likely to be compromised
The considerations of shareholders and directors will not normally be considered relevant when evaluating what sentence to pass.
In summary, the objective of the proposed new guidelines is as follows:
- The fine must reflect the seriousness of the offence
- The court should take into account the financial circumstances of the offender
- Sentencing needs to reflect the extent to which the offender fell below the required standard
- Fines are to be at a level that achieves a fair and proportionate degree of punishment and deterrence
- A corporation should be prohibited to from gaining financially from the breach
The new sentencing guidelines are expected to be published in late 2015/early 2016.
If you require any further clarification on any of the points mentioned in this article, please contact our office on 0207 993 6960.
Fisher Scoggins Waters is a leading construction, engineering and manufacturing litigation firm, specialising in disputes and disasters. For further information on this article or any of our litigation services, please contact us on: +44 (0) 207 993 6960.