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Eversheds comment: New Sentencing Guidelines for Health & Safety will increase fines and impact on shareholders

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    Commenting on new Sentencing Guidelines for Health & Safety, Corporate Manslaughter and Food Hygiene and Safety Offences David Young, partner at law firm Eversheds, says:

    “The overall effect of the guidelines is intended to be that for large organisations in particular fines will be much higher than has traditionally been the case, increasing the impact on shareholders and bringing fines more into line with those for economic crime cases such as competition law breaches.

    “Whilst the guidelines do not remove the discretion of the sentencing judge to reflect the circumstances of the particular case, nor do they eradicate existing sentencing practice such as a reduction in fine for an early guilty plea, they establish a new pathway to a starting point for the amount of a fine.

    “A large organisation being sentenced for high culpability and harm (a workplace fatality for example) can expect a range of £1.5m to £6m with a starting point of £2.4m (to be adjusted on the facts of the case). If the culpability is very high the range is £2.6m to £10m with an entry point of £4m. Nor is £10m a ceiling. Very large organisations with a turnover several times more than £50m potentially face fines considerably more than that.

    “The new guidelines for the sentencing of individuals will mean the lowering of the custody threshold in health and safety cases. Such prosecutions are comparatively rare but will be of concern to owner-managed businesses in particular.

    “The key question is impact, which will not be simply about the amount of the fine. It will need a change of approach both in risk management and then, if something does go wrong, to case preparation. It may increase an organisation’s desire to defend itself too.”



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