Sentencing Guidelines°

1. Sentencing Guidelines° Steffan Groch

2. Background to the Proposals Chronology and background to the Change • February 2010 – Sentencing Council Guidelines for Corporate Manslaughter & Health and Safety Offences Causing (our emphasis)Death • 2012 - Section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 • January 2014 - R v Sellafield and Network Rail • July 2014 – Updated Environmental Sentencing Guidelines in force – in particular see the guidance issued to the EA • November 2014 – Current guidelines consultation opens (closed 18 February 2015) • There is a piecemeal and often inconsistent approach to sentencing for these offences

3. Statistics – Health and Safety Offences Health and Safety Offences • 2013 Sentences: 273 – against organisations 146 – against (adult) individuals • 2013 Fines: £46,009 – average fine for organisations 50% of organisations received fines of less than £8,000 5% of organisations received fines of more than £225,000 £4,325 – average fine for individuals

4. Statistics – Food Safety and Hygiene Offences Food and Hygiene Offences • 2013 Sentences: 56 – against organisations 222 – against (adult) individuals • 2013 Fines: £1,785 – mean fine for organisations 5% of organisations were fined more than £5,000 £810 – average fine for individuals 50% of individuals were fined less than £500 5% of individuals were fined more than £2,500

5. Aims/Overarching Issues • Punishment and Deterrence • Low Fines – although it is accepted that not all cases are treated too leniently • Focus on large organisations and the most serious offences • Economic impact on management and shareholders • R v Southern Water • Ensuring consistency • Lack of guidance

6. The Guidelines°

7. Structure of Guidelines - Corporates • Similar approach to Sentencing Guidelines for Environmental offences • Guidelines set out for: • Health and Safety Offences: Organisations and Individuals • Corporate Manslaughter • Food Safety and Hygiene Offences: Organisations and Individuals • Multi-stage approach to reach the appropriate level – in effect, a tariff based approach • So what are the stages….

8. Structure of Guidelines - Corporates

9. Structure of Guidelines - Corporates Stage 1 - Determining the offence category: Culpability

10. Structure of Guidelines - Corporates Stage 1 - Determining the offence category: Harm (H&S offences)

11. Structure of Guidelines - Corporates Determining the offence category: Harm (FSH offences)

12. Structure of Guidelines - Corporates Starting Point and Category Range • Categorisation based upon turnover: • Large £50m plus • Medium £10m – 50m • Small £2m – 10m • Micro £0 – 2m • Size + Culpability + Harm = Starting Point and Range • Aggravating/mitigating factors – nothing new • New starting points vs sentencing trends to date: • Health and Safety offences • Food Safety & Hygiene offences

13. Structure of Guidelines - Corporates Is fine proportionate to means? • Flexibility to adjust the fine to the offender’s particular circumstances • Court must also consider the principles of sentencing • If it finds reason for doing so, the sentencing court can move outside the ranges proposed at step two Steps 4 to 9 • Further reflection upon fine and possible means of adjustment

14. Structure of Guidelines - Individuals • Range of sentencing options available • Guidelines include specific guidance on fining individuals Points to note • Culpability classed as either Deliberate, Reckless, Negligent or Low • Penalties and interaction with other sentencing options • Fines ranging from 25% to 700% of weekly income; • Manager on £60,000 pa found guilty of a reckless health and safety breach resulting in long term physical impairment could receive fine of £8,000 • Manager on £60,000 pa found guilty of a negligent food safety breach resulting in a serious adverse effect on human health could also receive fine of £8,000

15. Corporate Manslaughter • Guideline currently in force for Corporate Manslaughter (“CM”) and Health and Safety Offences resulting in fatality – to be replaced • Changes to sentencing of HS offences require change to CM offences • Step 1 – assessment of Seriousness • Step 2 – Financial assessment and Starting Points • Steps 3 to 9 – largely similar to those outlined above

16. Corporate Manslaughter

17. Case Studies: How cases would be treated under the new regime Health and Safety offences R v Network Rail • Turnover of £6.2 billion and profit of £780,000,000 – although a ‘not for dividend’ company • Serious accident at a level crossing – poor visibility and no telephone • 10 year-old son of the driver suffered life-changing brain damage • The company pleaded guilty and was fined £500,000 Guidelines • Assessment: Large, High Level Culpability, Category 1 Harm • Starting point: £2,400,000 (albeit reduced at stage 3)

18. Case Studies: How cases would be treated under the new regime R v X • Company turnover of c.£7,000,000, although part of a group structure • Serious physical and psychological injuries after exposure to chemical substances – death was foreseeable • Systematic failures; absence of any risk assessment for activities • The Company pleaded guilty and was fined £10,000 plus costs of c. £700 Guidelines • Assessment: Small, Medium Level Culpability, Category 2 Harm • Starting Point £54,000

19. Moving Forwards°

20. Considerations for the Future What practical lessons can be learnt from the guidelines/discussions today: • Safety and Food Safety & Hygiene, as it already is within your respective organisations, is a key concern. • Potential fines for health and safety/food safety & hygiene offences will increasingly move them up the boardroom agenda. • Particularly for ‘large’ organisations under the guidelines, potential levels of fine for these and CM offences change the nature previous fines: • What needs to be taken away from day? • Reappraisal of risk register and implications: • Level of reserve and financial planning – banking covenants, lending and credit worthiness, shareholder scrutiny etc; • Impact upon EL/PL Insurance and premiums: greater need to demonstrate risk management systems and work collaboratively with Insurer/Brokers – Insurer funding models? • Consideration of organisational structure; sufficient concern to justify creation of separate entities to contain risk?

21. Considerations for the Future • Greater focus upon issues of corporate governance • Initiated by judgments in Sellafield and Network Rail, but necessitated by culpability assessment in guidelines; need for demonstrable board level involvement • Continued need to ensure individuals are aware of their duties; both individually and as a key element of organisational compliance • Increased need for robust incident management procedures • Greater financial exposure at ‘lower end’ of spectrum (and implications for future culpability assessment) necessitates coherent company approach • Change in appetite to defend cases? Implications for the approach to internal investigation from outset • Fee for Intervention invoices for H&S offences, or challenging Improvement Notices etc; be wary • Appetite to defend cases / Newton hearings