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Acquisition of another company is an effective way to grow your business. Ensuring a successful transaction is all about the detail. You need to know exactly what you are buying.

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A company’s articles of association are of paramount importance; they are the key constitutional document setting out the basic management and administrative structure of a company.

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Tougher Sentences for breaches of Health and Safety Law – new guidelines came into force 1st February 2016

Yesterday, the 1st of February 2016, the Sentencing Council Guidelines for Health and Safety...

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Tougher Sentences for breaches of Health and Safety Law – new guidelines came into force 1st February 2016

4th February 2016

News : Uncategorised

Yesterday, the 1st of February 2016, the Sentencing Council Guidelines for Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene came into effect….here is a useful link http://www.sentencingcouncil.org.uk/publications/item/health-and-safety-offences-corporate-manslaughter-and-food-safety-and-hygiene-offences-definitive-guideline/

Published back in November 2015 they apply to all such offences, committed by Companies or Individuals, sentenced after the 1st February 2016 – no matter what date the offence took place.

Until now the only sentencing guidelines to help Courts in this area related to corporate manslaughter and health and safety offences causing death. These new guidelines provide much more comprehensive and detailed guidance for a much wider range of offences. They are important because Courts must follow them when sentencing for this type of offence.

One of the aims of the Sentencing Council is to eradicate inconsistencies in sentencing in this area which they attribute to the fact that these type of cases are comparatively rare such that often the Courts, Magistrates Courts in particular, have struggled to sentence fairly and proportionately.

In addition, since 2014 the Magistrates have had the right to impose unlimited fines so that, at least in theory, more cases of this nature that might otherwise have been heard in the Crown Court may now be dealt with in the Magistrates Court.

HOW DO THE NEW GUIDELINES WORK?

The guidelines work much like other sentencing guidelines that Courts are well practiced at applying. As a starting point the Court looks at the level of harm caused by the breach. However, this is not just the actual harm caused in any given accident but rather the risk of serious harm. For example, let’s say that a builder falls 3ft from a 30ft ladder which is not properly fastened and breaks his ankle – the Court will take into account the fact that he could have fallen a much greater distance and even been killed. In other words they could (or arguably should, if properly following the guideline) categorise this as a high degree of harm where there was risk of death or life changing injury.

Next the Courts look at the level of culpability of the offender – i.e how much blame can be attributed to the individual or organisation. The court will place an offender on a sliding scale from very high culpability (deliberate or flagrant breach) to low culpability (minor failings in an isolated incident).

Having decided what category the offence falls into by reference to those 2 factors of “harm” and “culpability”, the Court will then look at the size of the organisation – looking principally (but far from exclusively) at its turnover. One crucial part of the sentencing exercise is to check whether any proposed fine is proportionate to the overall financial means of the offender – to quote directly from the guideline “The fine must be sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation”. Organisations are categorised from micro (turnover up to £2million), small (turnover up to £10 million), medium (turnover up to £50 million) to large (turnover £50 million +), with fines ranging from £50 to over £20 million! Companies are required to provide a wealth of financial information so that, whilst the turnover of a company is considered when determining the starting point for the level of fine, the guidelines require the court to consider the overall resources of a company (or even linked companies) to determine more precisely the appropriate level of fine.

Once that is determined the Court looks at other aggravating and mitigating factors. An example of an aggravating feature would be a similar previous conviction, and an example of a mitigating feature would be a particularly high level of co-operation with the Health and Safety Executive or Food Standards Agency Investigation.

The court would then consider applying a reduction in sentence for an early guilty plea if appropriate, such a reduction could amount to up to 1/3rd off the sentence.

There are separate guidelines for individuals as opposed to organisations but they work in a very similar way and, in the same way that the guidelines bring in a hike in sentencing for large companies in particular, they also serve to increase the risk of a custodial sentence for individuals facing sentencing for such offences.

WHAT DOES THIS MEAN IN PRACTICE?

Only time will tell how the new guidelines will play out in Court, but as mentioned above it is clear that larger companies will now face significantly heftier fines than before, with sentencing ranges for large organisations of up to £10 million for serious health and safety breaches and £20 million for corporate manslaughter. For very large companies the Courts can go beyond even these amounts if deemed necessary to properly impact the organisation. It also means that Courts will, more than ever before, specifically look at what could have happened not what actually did happen where there is a breach of health and safety legislation. So any Company or Individual facing sentence for this type of offence must do all they can to ensure that:-

a)the Court correctly and fairly categorise them in terms of harm and culpability

b)they provide the Court with all relevant information, for example evidence of health and safety policy, procedure and training as well as detailed financials

c)they demonstrate to the Court, and robustly argue, all relevant mitigating features – for example active co-operation with the investigation

In other words it means getting the right legal advice and representation as soon as possible because these new guidelines mean that the stakes have never been higher.

SO WHAT SHOULD I DO ABOUT IT?

You know that old adage – “prevention is better than cure” – well it has long since applied to all things health and safety – and even more so now these new tougher sentencing guidelines are in force. So, whether you are a small building contractor or the director of a multi million pound turnover business, the advice must be to sort out your health and safety policy, procedures and training as a matter of priority. If necessary get expert help to do this. However, if you face a Health and Safety Executive or Food Standards Agency investigation or worse, prosecution, seek expert legal advice immediately.

Daniel Brooks – Partner and Head of Criminal and Regulatory Law at Poole Alcock LLP.

Daniel Brooks is a Higher Court Advocate with significant experience of defending clients in all aspects of Regulatory Defence including prosecutions for alleged breaches of Health and Safety legislation. For more information feel free to visit his profile on our website and read the testimonials.

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