Andrew Brammer and Sarb Bisla explore the complexities of criminal prosecutions for health and safety offences and the key role of a solicitor in defending them.
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Transcript
James Muller: Hello, and welcome to this Weightmans Safety Season of Podcasts.
James: Please do remember to leave any questions you have in the comments. In our eighth and final episode, we will be answering some of your questions from throughout the series.
Andrew Brammer: Hello, and welcome to this Weightmans health and safety podcast. In this session, we're going to be looking at health and safety offences and sentencing before the criminal courts.
Sarb Bisla: My name is Sarb Bisla and I work here in the regulatory team at Weightmans.
Andrew: My name's Andrew Brammer, and I'm one of the lawyers here in the regulatory team at Weightmans.
Andrew: So, in this podcast, we want to look at the practicalities of a company being convicted of health and safety offences in the criminal courts and really what happens in a criminal sentencing hearing in court.
Andrew: So just a quick recap. Where a company either pleads guilty or is found guilty after a trial of any health and safety offence, the company is then considered convicted of a criminal offence. It must therefore be punished for that offence because a company, as opposed to one of its directors, and more on that later, cannot go to prison, the only immediate punishment is an unlimited fine.
Andrew: So, where a company is convicted, the court must hold a sentencing hearing to determine the size of that fine. And it's this process that we're going to explore.
Andrew: And just let me give you some context. The Health and Safety Executive, and that's chief regulator for health and safety in the workplace in the UK, tells us in its 2022-2023 annual report that it launched 216 criminal prosecutions last year, with 203 of those cases resulting in the dutyholder, so company or individual, being found guilty or pleading guilty.
Andrew: That's a conviction rate of 94%.
Andrew: So, in this podcast, we're going to look at how do courts in England and Wales, sentence organisations and individuals for health and safety offences.
Andrew: Sarb, can you tell us about that?
Sarb: So, the sentencing council, which deals with sentencing in relation to a range of offences, issued definitive guidelines for sentencing health and safety offences in February 2016, and courts in England aware and Wales are required to take those guidelines into account before deciding on the appropriate sentence for any health and safety offence, where an organisation or an individual has either pleaded guilty to a health and safety offence or has been found guilty after contesting a prosecution at a trial hearing.
Andrew: Okay. So, do the courts have to follow the guidelines every time they sentence for health and safety offences?
Sarb: Well, the guidelines state that every court must follow the guidelines unless the court is satisfied that it would be not in the interests of justice to do so.
Andrew: Right. And how do the guidelines work?
Sarb: The guidelines, they set out a structure, including categories, routing points, and offence ranges, including the range of sentences appropriate for each type of offence. And within each offence, the council has specified a number of categories with corresponding ranges for sentences, which reflect varying degrees of seriousness.
Sarb: The council has also identified a starting point within each category range.
Andrew: And do the guidelines apply to individuals and people as well?
Sarb: Yes, they do. I mean, the guidelines apply to any individual offenders aged 18 and over. And in the context of health and safety offences, they can include a wide range of individuals such as directors, managers, supervisors, partners, sole traders, and also self-employed.
Andrew: Okay. So, when you look at a company, being sentenced in the criminal courts, what level of fines can the court impose?
Sarb: Well, the guidelines in fact confirm that an unlimited fine can be imposed regardless of whether the case is sentenced before a magistrates court or a crown court.
Andrew: Okay. So, applying the guidelines, as I understand it, the court needs to determine something called an offence category. How does a court do that?
Sarb: Well, under the guidelines, the court has to determine the harm category, by using, culpability and harm factors as set out in the guidelines.
Andrew: So, is culpability the extent to which the company failed to fulfil its legal duty?
Sarb: Yes, and the harm is just that the harm caused, but it's not all about harm. It's also more to do with the risk of harm. So that means the higher the level of culpability and the risk of harm, the greater the level of any fine that can be imposed.
Andrew: So, do the guidelines set out any different degrees of culpability? For organisations, for example.
Sarb: That's right. The guidelines, they set out four levels of culpability, the most serious being very high culpability, where there has been a deliberate breach of or flagrant disregard for the law. There is then high culpability where an offender has fallen far short of appropriate standards. For example, failing to put in, place measures that are recognised standards in the industry, ignoring concerns raised by employees or others or failing to make appropriate changes following prior incidents, exposing risks to health and safety.
Sarb: And also allowing breaches to subsist over a long period of time.
Sarb: The guidelines then, refer to medium culpability, where an offender fallen short of the appropriate standards in a manner that falls between high and low culpability or where systems were in place, but they had not been sufficiently adhered to or implemented.
Sarb: And then finally, you have low culpability where an offender did not fall far short of the appropriate standards. For example, because significant efforts had been made to address risks although they had been inadequate on this occasion. Or alternatively there had been no warning or circumstance indicating a risk to health and safety. Or, where failings were minor and occurred as a result of an isolated incident.
Andrew: Okay. So that's the position in respect of companies, but if I'm right, we've also talked about the fact that individuals can be sent for health and safety offences in the courts. So how does the court approach culpability for those people?
Sarb: Under the guidelines, there are set factors of culpability, which specifically apply to individuals. So, for example, for very high culpability, that can include where the offender intentionally breached or flagrantly disregarded the law.
Sarb: And for high culpability, it includes actual foresight of or wilful blindness to the risk of offending, but the risk nevertheless being taken.
Sarb: Medium culpability includes an offence committed through an act or an omission which is a failure to act, which a person exercising reasonable care would not have committed.
Sarb: And then finally, for low culpability, that includes the offence being committed with little fault with the factors being the same as that set out for organisations.
Sarb: Â And where there are factors present in a case that fall in different categories of culpability, the court under the guidelines has to balance the various factors to reach a fair assessment of an offender's overall culpability.
Andrew: Okay. So you've described culpability, but if I remember, you also mentioned something called harm. What's the court's approach to that?
Sarb: For health and safety offences, they are concerned with failures to manage risk, and they don't require proof that an offence caused any actual harm. The offence is in creating a risk of harm, and the courts are required to determine the seriousness of harm that was risked in a case, together with the likelihood of harm in order to arrive at a harm category.
Sarb: So just by way of example, under the guidelines, The appropriate harm category is one, which is the most serious, if there was a high likelihood of harm, and if the seriousness of harm risk was death, or significantly reduced life expectancy, or a physical or mental impairment resulting in lifelong dependency on third party care or basic needs.
Sarb: Now before assigning the final harm category, the courts also have to consider two other factors. Firstly, whether the offence exposed the number of workers or members of the public to the risk of harm, and the greater the number of people, the greater the risk of harm, And secondly, the courts also have to consider whether the offence was a significant cause of actual harm.
Sarb: If one or both of these factors apply, the court is given the discretion to move up a harm category if the court deems that appropriate.
Sarb: If the case is already in harm category one, and the court wishes to move higher, it can move up from allocated starting points.
Sarb: The harm category is worked out in a similar way, regardless of whether it is an organisation or individual being sentenced.
Andrew: Okay. Well, there's a lot of information there to grasp. Can I just try and recap it?
Andrew: So, when a court comes to sentence of company, it must look at how far below the required standard the company's actions fell, and we've called that culpability.
Andrew: And also what the likely harm might have been or was from that failure. And we've called that harm.
Andrew: So that then gives the court a harm category which determines the range of fines available to it. What else does the court have to look at, Sarb?
Sarb: So the what the court also look at, under the guidelines is the financial position of organisations, which is very relevant when the court sentenced for health and safety offences.
Sarb: So in terms of explaining that, an offender is expected to provide comprehensive financial information. For example, financial accounts covering a three year period for a limited company, or in the case of an individual, their disposable income after discounting their expenditure in order for the court to take that information into account.
Sarb: It is in the interests of an organisation or individual to provide financial information because the guidelines state that if a court determines that it has not been provided with sufficient information, the court will be entitled to draw reasonable inferences as to an offender's means from the evidence that it has had and the circumstances of a case, and which may include, in appropriate cases, an inference by the court that the offender can pay any fine.
Andrew: Wow. So, in the absence of information, the court can simply determine that the company can pay the fine set. If we wanted to try and challenge that, what kind of financial information will the court want us to focus on?
Sarb: Well to begin with, the courts should focus and under the guidelines, should focus on the annual turnover of an organisation. So, for example, there's various categories of organisations under the guidelines.
Sarb: And under the guidelines, an organisation is deemed be a micro organisation, if its turnover is less than two million.
Sarb: An organisation is deemed to be a small organisation if it makes turnover of between £2 million and £10 million.
Sarb: And then falls under the category of a medium organisation if it turnover is between £10 million and £50 million.
Sarb: And then you have large organisations which make a turnover of more than £50 million, although it's worth bearing in mind that an organisation can be deemed to be a very large organisation if it makes a turnover, which significantly exceeds £50 million. And in such cases, the guidelines confirm that it may be necessary to move outside of suggested ranges to achieve a proportionate sentence.
Andrew: Okay. So, by taking all of that information into account, the court will arrive at a starting point and something called a category range. Is that correct?
Sarb: Yes. There are different starting points and category ranges depending on the size of an organisation, its annual turnover, its level of culpability, and the appropriate harm category, So just by way of example under the guidelines for a large organisation with a high culpability and where the harm category is one, the recommended range of fine is between £1.5 million and £6 million, with a starting point for a fine in the sum of £2.4 million.
Andrew: Okay. So just to recap on that, we've got a large organisation, so that means a turnover of £50 million or more, a finding that that organisation fell far below the required standard in ensuring the safety of its employees and in doing that, created a risk of harm or caused actual harm, that could have resulted in death or lifelong dependency on others for care. And with those factors present, the court can then look at a fine from £1.5 million up to £6 million. Is that right?
Sarb: Yes. It is.
Andrew: Wow. Okay. So you've also mentioned the requirement to provide financial information. When I've presented financial information before in cases, I've used the company's accountant or an independent forensic accountant to prepare a report. Would you agree?
Sarb: Absolutely. Those are two very good ways to present financial information.
Sarb: The main point is that you must provide information about the financial circumstances of the company, and failure to do so might mean that the court simply decides that the company can pay any fine that the court determines.
Andrew: Sarb, what happens if an organisation has been achieving a high turnover but has a low profit margin?
Sarb: Well, the court will take this into account as part of its overall objective to impose a fine which is proportionate to the financial circumstances and overall means of an offender and what it can afford to pay. While also, at the same time, trying to balance that against the seriousness of the offence, the guidelines confirm that if an organisation has a small profit margin relative to its turnover, then a downward adjustment of a fine may be required.
Andrew: Are there any other factors that the court should take into account?
Sarb: Well the court should also consider the wider impact of any fine within the organisation or on innocent third parties such as whether the fine impairs the offender's ability to make restitution to victims. Any impact that the fine has on the offender's ability to improve conditions in the organisation, or to comply with the law, and also any impact on the employment of staff, service users, customers, and the local economy. But it does not include any impact on shareholders or directors.
Andrew: So just to be clear, the court doesn't take in into account the impact on shareholders or directors?
Sarb: No. And after taking all of the financial information into account, including the offender's ability to pay a fine, the court has the power to allow time for payment or to order the amount to be paid in instalments, if necessary, over a number of years. And this is why presenting that financial information is so important.
Andrew: Many times clients will say to me, can the court simply fine a company so much that it puts it out of business?
Sarb: Well, the guidelines state that the fines should be big enough to send a message to the shareholders and directors and shareholders about the duty to ensure safety in the workplace, but should not necessarily close that business down, unless the failings are exceptionally bad.
Andrew: Okay. So that's the position for companies, but what about the starting point and category ranges for individuals?
Sarb: As with organisations, there are different starting points and category ranges depending on an individual's level of culpability and the appropriate harm category. So just by way of example, under the guidelines, for an individual with very high culpability, and where the harm category is one, the recommended range of sentence is between one and two years custody. With a starting point of 18 months custody.
Sarb: And where the custody threshold has been passed, the guidelines state that the courts should consider whether a custodial sentence is unavoidable, and if it is, whether that sentence can be suspended.
Andrew: Okay. And when you mean custodial sentence, do you mean sending people to prison?
Sarb: Yes, effectively.
Andrew: Okay. Now, we've looked at all the factors, the big factors that the court has to take into account, but I've heard of a phrase of mitigating and aggravating factors. Can you just explain those for us?
Sarb: Yes. Under the guidelines, the court will take into account any aggravating or mitigating features in a case. And these can result in further adjustment within a category range and the starting point for a sentence.
Sarb: So, in some cases, having considered such factors, The guidelines give the courts a discretion to move outside of an identified category range.
Sarb: So giving examples of aggravating features, aggravating features that can result in the upward adjustment of a fine for an organisation include previous convictions, particularly convictions for previous similar health and safety offences, cost cutting at the expense of safety, deliberate concealment of illegal nature of an activity, breach of any court order, an obstruction of justice, and also poor health and safety record.
Andrew: Okay. As I understand it then from what you said, aggravating features can enable the court to impose a higher fine. Are there any other factors that could be used to the company's advantage?
Sarb: Yes. There are also mitigating features that can result in the downward adjustment of a fine. An example of mitigating features include no previous convictions or no relevant or recent convictions, evidence of steps having been taken voluntarily to remedy a problem, a high level of cooperation with the investigation, beyond that cooperation which will always be expected, a good health and safety record, effective health and safety procedures being in place, and also self-reporting, cooperation and acceptance of responsibility.
Andrew: And do the guidelines set out separate aggravating and mitigating features for individuals.
Sarb: Yeah. So, in terms of aggravating features, there are identical aggravating features set out for individuals.
Sarb: There are also similar mitigating features set out for individuals, but under the guidelines, with some additional mitigating features including good character and or exemplary conduct, inappropriate degree of trust or responsibility, an individual having a mental disorder or learning disability, where linked to the commission of the offence, serious medical conditions requiring urgent, intensive, or long term treatment, age, and/or lack of maturity where it affects the responsibility of the offender, and finally, the offender being a sole or primary carer for a dependent relative or relatives.
Andrew: Okay. Thank you. Sometimes a company might feel that the individual involved in a workplace accident failed to follow training or acted in a way that almost brought the accident upon themselves.
Andrew: Can a court be invited to look at the actions of a victim and whether or not they contributed to the accident?
Sarb: Well, that information whilst it can offer some mitigation, it may be limited on the basis that the guidelines specifically state that the actions of victims are unlikely to be considered contributory events for sentencing purposes, and that offenders are required to protect workers or others who may be neglectful of their own safety in a way which is reasonably foreseeable.
Andrew: And in terms of pleading guilty, what's the relevance of that in a sentencing hearing?
Sarb: The guidelines confirm that any organisation or individual that pleads guilty to a health and safety offence should receive credit for a guilty plea that's entered. So, that credit is a reduction in the sentence passed. An organisation or individual can receive full credit by way of a discount of up to a one third or 33% on their sentence if they plead guilty at the first available opportunity in their case. For example, at the first court hearing in their case where a plea is requested. That credit and discount available gradually decreases as the case progresses, and it decreases down to 10% if a guilty plea is entered on the first day or partway through a trial hearing.
Andrew: And Sarb, can the courts impose any other orders?
Sarb: Yes. Under the guidelines, the courts also have the power to award compensation where the offence has resulted in loss or damage and in most cases, the courts will also order that the offender, whether it be an organisation or individual pays the reasonable costs of the prosecution.
Andrew: And just to recap, we've seen that the courts can impose unlimited fines against a company. What powers does the court have in respect of individuals?
Sarb: Well, as well as impose a fine against individuals, the courts can also impose custodial sentences. And if the case proceeds to a crown court, the crown court has the power to impose a custodial sentence up to two years.
Sarb: Even in cases involving only low culpability, the guidelines set out that the courts can still impose a custodial sentence of up to 26 weeks, as well as fines and community orders if a high category of harm is applicable.
Sarb: In addition to prison sentences, the guidelines also give the courts the discretion to disqualify an individual from being a director of a company and the Crown Court can disqualify an individual from acting as a director of a company for up to 15 years.
Andrew: Thank you for that. So, we've looked at the process, but in the final analysis, what is the objective of any court when sentencing a company for help and safety offences?
Sarb: Well, the guidelines refer to various objectives, including punishment, deterrence, and the removal of any economic benefit gained through committing an offence, including through avoided costs, on the basis that it should not be cheaper to offend than to take the appropriate precautions.
Sarb: The guidelines state that the fine imposed must be sufficiently substantial to have a real economic impact, which will bring home, both to management and shareholders, the need to comply with health and safety legislation.
Sarb: The guidelines go on to state that in some bad cases, it may be an acceptable consequence if the fine has the effect of putting an offender out of business.
Andrew: So, we've looked at the process of sentencing companies and individuals for health and safety offences in the courts, but what levels of fine have been imposed against organisations in practice?
Sarb: So, there is evidence to suggest that there has been a considerable increase in the levels of fines imposed against organisations irrespective of their ties and there are examples that can be given of large fines imposed against organisations.
Sarb: In the 2022 prosecution of WH Malcolm Limited, the Court of Appeal considered a sentenced imposed by a Crown Court. The case involved a tragic accident where an 11-year-old boy and five of his friends, all aged between 11 and 14 met and went to the location of a bridge on the crick to Kilsby bridleway.
Sarb: The boy kicked his football and it went upon to the bridge. Now all six of the children climbed over a post and a rail fence and walked up the embankment and directly onto the track side. The boy climbed upon to the roof of a train that was parked underneath an overhead line, and tragically electricity arced, killing him instantly.
Sarb: Now the Court of Appeal agreed that there was inadequate fencing along where the trains were parked, providing easy access and an easy route to the overhead electrical lines. There had been previous incidents of trespass to alert the company to this. And the company received a fine of £6.5 million to be paid within five years. And this was despite the fact that the sentencing guidelines recommended a starting point for a fine in the sum of £2.4 million, with a range of between £1.5 to 6 million for a large company with high culpability, with the highest harm category being applicable.
Sarb: However, in that case, the judge decided to move up a category to very high culpability which is usually reserved for deliberate breaches of or flagrant disregard for the law.
Sarb: The company raised an appeal to the Court of Appeal and argued that the fine was manifestly excessive. However, the Court of Appeal found that the Crown Court judge was justified in their approach and that the fine of £6.5 million was proportionate and just.
Sarb: That decision further demonstrates the Court of Appeal will be reluctant to interfere with the large fines imposed on large organisations.
Andrew: So, the Court of Appeal accepted the judge moving outside the guidelines and actually imposing a higher than recommended fine in that case. Is that right?
Sarb: Yes.
Andrew: Okay. So, when we were looking at the process of sentencing in the criminal courts, we talked about harm as something that is based on risk alone rather than actual harm. So, are there any cases of big fines being imposed even when no one was actually harmed?
Sarb: Well, in cases, but it's by no means certain that a lower fine will be imposed in cases where there has been no injury, given that the guidelines focus on the risk of harm rather than any actual harm caused.
Sarb: And that is perhaps best demonstrated by the two cases against National Grid, and Excellent Pipeline Systems Limited, with both receiving significant fines.
Sarb: National Grid was fined £4 million and ordered to pay prosecution costs of over £91,000 in February 2022 for exposing residents and members of the public to risk of their health and safety.
Sarb: This was as a consequence of poor record keeping in respect of hundreds of high rise multiple occupancy buildings, which led to the absence of routine safety inspections, condition surveys, and routine maintenance of those buildings. And then in March last year, Excellent Pipeline Systems Limited, a major pipeline transportation company, was fined £2.3 million and ordered to pay over £150,000 in prosecution costs for safety breaches after its employees were exposed to risk of serious injury and even death while working on a leaking pipeline containing petrol under pressure.
Sarb: The Health and Safety Executive investigation into the incident found that Excellent failed to properly identify and control the risks associated with carrying out pipeline repair.
Andrew: So, in those two cases, we've got examples of courts imposing fines of over £6 million against the companies involved, but no one was harmed. Is that right?
Sarb: Yes.
Andrew: And are there similar examples of significant sentences being passed against individuals?
Sarb: Yes. A previous Sentencing Council impact assessment found that there has been a general rise in the number of immediate and suspended custodial sentences, as well as community service orders being imposed against individuals.
Sarb: This was most recently shown in the sentencing of two individual directors in May last year. The directors ran a metal recycling business where a wall toppled over and killed five agency workers who had been clearing a bay of metal filings to make way for scrap metal.
Sarb: The directors each received a nine month immediate custodial sentence in relation to four health and safety charges.
Sarb: So, with all of this being taken into account, Andrew, what, if anything, do you think we can learn from recent health and safety sentencing trends?
Andrew: I think it's fair to say that with the sentencing guidelines setting no maximum limit for a fine and also stating that imposing a fine which has the effect of putting an offender out of business is an acceptable consequence in exceptionally bad cases, it seems to me that there's even more scope for increased sentences on the horizon, especially for organisations that are categorised as very large organisations. And just to recap, those are with turnover significantly in excess of £50 million per year.
Sarb: So in terms of the guidelines and how they are set out, why, in your view, do organisations and individuals require legal representation if the sentencing process is all set out in detail in the guidelines?
Andrew: We know that fines are getting bigger and that the risk of prison sentences is becoming more likely, so the need for legal representation from an early stage is really vital to ensure at least five things.
Andrew: One, well informed decisions are made, whether to plead guilty or alternatively plead not guilty, and then how to maximise credit should we choose to please guilty?
Andrew: Two, seek to ensure that the case is presented fairly by the prosecution.
Andrew: Three to ensure that the court has all the best up to date information to make the right decision.
Andrew: Four to support you through the process and explain how it affects you or your company.
Andrew: And five, where relevant to work with your insurer to keep cost to you to a minimum.
Sarb: And then talking of insurers and insurance policies, if an organisation or individual, paid for an insurance policy, which includes legal expenses coverage, can the organisation or individual concerned still choose a solicitor of their own choice.
Andrew: Absolutely. And it's something that I think people don't know about, but companies are required to have insurance policies in place covering employers' liability and public liability.
Andrew: Such policies frequently provide cover and funding for legal expenses incurred in defending a prosecution at trial or alternatively pleading mitigation at a sentencing hearing. Where individuals such as directors face prosecutions for health and safety offences, there may be relevant cover and funding for the costs of representing the individuals and as the same policy or alternatively a separate directors and officer's insurance policy.
Andrew: So in these cases, insurers may try to insist that an organisation or an individual has to be represented by a firm of solicitors retained on that insurer's panel.
Andrew: However, it's important to know that an organisation or individual has the legal right to insist on their solicitor of choice. So you do not feel you have no options.
Andrew: Well, Sarb, thank you for all that information, and that's the end of our podcast on sentencing health and safety offences in the criminal courts. I hope you've found this useful and thank you for your time.
James: Thank you for that, Andrew and Sarb, and thank you all for listening to Weightmans safety season of podcasts.
James: The next podcast will be on health and safety: a forecast for 2024. So make sure not to miss that available from the 11 March.