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Corporate Manslaughter Fines to Increase to £20m

5 November 2015
 November 5, 2015

Major companies convicted of corporate manslaughter will face fines of up to £20m in order to replace sanctions that are deemed to be insufficient.

The guidelines, unveiled by the Sentencing Council, also state that firms with a much bigger turnover than £50m could be hit with even bigger fines for blatant safety breaches.

The new guidelines will come into effect on 1 February 2016. It introduces a wider range of fines for offences and an increase in the maximum amounts that can be imposed on organisations. Fines for companies found guilty of health and safety, food safety and food hygiene offences will be significantly increased.

Current guidance indicates the starting point for a corporate manslaughter offence should be £500,000. However, the new guidelines increase the maximum penalty imposed to £20m.

Organisations with a turnover of between £10m and £50m could face fines of up to £7.5m, firms with a turnover of between £2m and £10m would see a maximum fine of £2.8m while firms with a turnover of less than £2m could see fines hit £800,000.

Recent prosecutions under the existing Corporate Manslaughter and Homicide Act 2007 have resulted in fines of between £385,000 and £600,000. The number of cases brought under the Act have steadily increased since it came into force in April 2008.

The Sentencing Council states that fines should be large enough to have an impact that would bring home to an organisation the importance of operating in a safe environment. The guidelines for judges in England and Wales are being strengthened because existing sanctions were felt to be too low to act as a deterrent.

Judges and magistrates can still impose punishments outside the recommended range if they believe they are dealing with an exceptional case. Indeed, individual company directors found guilty of consent, connivance or neglect could receive potentially unlimited fines and prison sentences of up to two years.

Laura Cameron, a partner and head of regulatory law at Pinsent Masons, believes directors will now be encouraged to prioritise health and safety cases.

“UK Plc has been sent a clear message today that the regulatory authorities expect health and safety to remain a key corporate priority,’ she said. “Boardrooms across the country will be taking note, and if they are not already doing so, directors should be pushing health and safety issues to the top of their agenda.
“The increase in penalties for serious offending has been introduced because in the past, some offenders did not receive fines that properly reflected the crimes they committed. The council wants fines for these offences to be fair and proportionate to the seriousness of the offence and the means of offenders.”

Michael Caplan QC, a member of the Sentencing Council, believes the new guidelines will provide greater consistency for offences.

“These guidelines will introduce a consistent approach to sentencing, ensuring fair and proportionate sentences for those who cause death or injury to their employees and the public or put them at risk.
“These offences can have very serious consequences and it is important that sentences reflect these.”