From early 2016, organisations found guilty of serious health and safety offences, including corporate manslaughter, could face much tougher penalties under proposed new sentencing guidelines.
The Sentencing Council’s proposed changes suggest larger financial penalties could be on their way, particularly for very large organisations with a turnover in excess of £50 million. It is thought that these guidelines will be applied retrospectively to cover incidents that occurred before the date on which the guidelines come into force.
New health and safety fines could be issued according to a tariff system, with the magnitude of the fine related to organisational turnover as well as the seriousness of the offence. The proposal lays out a likely fine ‘range’ for small, medium and large organisations.
Penalties with "economical impact"
In one of the most radical changes, the guidelines suggest removing an upper limit for the largest organisations. Instead, if a company’s turnover “greatly exceeds” the £50 million threshold for large businesses, then the penalty could be increased so as to have a “real economic impact”. It is thought that this could open the door for colossal penalties to be imposed on big corporations.
The Sentencing Council has indicated that its guidelines will mirror the environmental guidelines, which came into force in July 2014. One recent environmental court case involving utilities giant Thames Water illustrates how the health and safety guidelines might be applied. During proceedings in the Court of Appeal, judges rejected the water company's appeal against its £250,000 fine and said that they "would have no hesitation in upholding a very substantially higher fine."
By proposing stricter penalties and effectively removing an upper limit to fines for those most serious crimes, the Sentencing Council is trying to force organisations to think more carefully about their commitment to health and safety .
The role of supply chain compliance
This increases the business case for improving health and safety policies, training and compliance, particularly the difficult task of managing health and safety compliance across the supply chain.
"It's more crucial than ever before that companies have robust compliance procedures, " said Gary Plant, Managing Director of supply chain compliance specialist Altius. "This might mean swapping archaic spreadsheet-based compliance systems for more agile software systems which provide total supply chain visibility and a complete health and safety compliance audit trail that is easily accessible and retrievable should a company end up defending itself."
Photo Credit: Sentencing Council