CCA Response to SAP consultation on sentencing for manslaughter and health and safety convictions (Mar 2008)

INTRODUCTION

In its consultation paper, the Sentencing Advisory Panel set out its proposals for guidelines for the sentencing of organisations convicted of corporate manslaughter and health and safety offences. It proposes: (a) the factors that should influence a court’s assessment of the seriousness of a particular manslaughter or health and safety conviction; (b) what should be the aims of sentencing; (c) how the courts should determine what level of fines should be imposed, and (d) the circumstances when a publicity and remedy orders should be imposed, and the forms they these may take.

This is the response of the Centre for Corporate Accountability (CCA). The CCA is a charity concerned with promoting worker and public safety – with a particular focus on the role of state bodies in the enforcement of health and safety law and the investigation and prosecution of work-related death and injury. It runs Britain’s only national advice service for families bereaved from work-related deaths on investigation and prosecution issues, and has been involved in advocacy and policy work on law enforcement and corporate criminal accountability issues. It has been particularly involved in working on and around the corporate manslaughter bill.

Aims of sentencing
The CCA does not have any specific comments on the sections dealing with the aims of sentencing set out in paras 33 to 38, and 44 to 49. However, we would like to emphasise the significant differences that exist between (a) a health and safety offence relating to a death and (b) a corporate manslaughter offence – differences which do not appear to be fully appreciated in the document (see table 1). These differences partly explain why, even under the new legislation, prosecutions for the offence of corporate manslaughter are likely to be a rarity compared for with those for health and safety offences – even though the latter are, in an absolute sense, low in number.

Table 1: Comparison of health and safety and manslaughter offences.

Calculating Levels of fines
The SAP proposes that when a court sentences an organisation for manslaughter, the court should impose a fine of between 2.5% and 10% of the organisation’s turnover. The court should first take the ‘baseline’ figure of 5% of the organisation’s turnover and then, depending on the existence and extent of various mitigating or extenuating circumstances, increase the fine up to 10% of the turnover or reduce it down to 2.5%.

In relation to convictions following health and safety offences resulting from deaths, the proposed range of fines the court should consider would be between 1% to 7% - with 2.5% being the baseline figure.

As part of considering this proposal the CCA undertook some research on (a) the current relationship between fines and company’s turnover and gross profits, and (b) what effect the SAP’s proposals would have on the levels of fines and the relationship to a company’s profits. The results of this research is attached.

The CCA has the following views about the proposals relating to the calculation of the fine:

1. The CCA agrees with SAP’s proposal that there needs to be a much more consistent link between criteria that reflect the company’s wealth and the level of fine imposed.
   
   
2. The CCA also agrees, for the reasons provided by the SAP itself, that turnover should be the main criterion that should be used by the courts to assess the company’s wealth and that the fine should primarily be linked to a percentage of the turnover of the company.
   
   
3. The CCA does not however consider that the range of 2.5 - 10% of the company’s turnover is anywhere near an appropriate range for a convictions for corporate manslaughter. This is for the following reasons:
   
   
   • Manslaughter is one of the most serious criminal offences – perhaps second only to murder. The gravity of the sentence that a court should impose upon a convicted organisation should reflect the gravity of the sentence which the court can impose upon an individual. When individuals are convicted of manslaughter, the most likely sentence is imprisonment and in relation to work-related deaths, the most serious penalty so far imposed upon an individual has been 7 years imprisonment. There is no reason why, in the future, sentences will not be even higher. The CCA does not consider - nor can we see how any fair minded person could consider - that a fine of 10% of a company’s turnover has any where near the same level of impact upon the company, nor impact in terms of ‘social message’, as a sentence of 7 years imprisonment has upon an individual.
     
     
   • It appears from the report that the only reason the Panel considers that 10% of an organisation’s turnover should be the highest possible expected sentence that could be imposed by the court is that this is the maximum fine that can be imposed by the Office of Fair Trading (OFT) when imposing penalties on companies that have infringed competition law. However, the CCA believes that this is a highly inappropriate comparison:
     - the OFT is dealing with administrative offences not criminal offences. This is an administrative fine imposed through administrative means, not a criminal case proven in court beyond reasonable doubt;
     - the crime of manslaughter is clearly by far a more serious offence than an infringement of competition law;
     - the OFT is dealing with financial crimes; they are not offences involving a death of a person.
     
     
   • Therefore, in the CCA’s view, it would be simply inappropriate for a company convicted of corporate manslaughter to be sentenced by a crown court for the most serious corporate manslaughter at the same level as an administrative body would be fining for a serious competition infringement. There must be a very significant gap between these two – otherwise the criminal law and, in particular the new offence of corporate manslaughter, would risk losing a great deal of public credibility.
     
     
   • Our analysis (set out in our research report) shows that although the fines at 10% of the turnover would be much larger than those imposed by the court for health and safety convictions following a death, in most of the cases represent less than half of one year’s profits.
     
     
   • The levels of fines that a court can impose following a conviction must have a significant deterrent effect in terms of both specific and general deterrence. The proposed percentages do not achieve either end.
     
     
   • It seems that in determining the percentage range, the Panel has in some unspecified way, taken into account the fact that a publicity order would be imposed upon the company. The CCA disagrees that the fine range should have been affected by this. This is because there is no certainty, that the publicity order will result in any further negative impact upon the company beyond which the normal publicity of a trial would provide.
     
     
4. As a result of the above points, the CCA thinks that the starting point for convicting a company for manslaughter should be 25% - with the range being between 15% and 40%. 15% is proposed on the basis that there should be a clear distance between fines that can be imposed administratively for infringement of competition law, and those following convictions of corporate manslaughter at the end of a criminal hearing and due process. In addition the CCA thinks that no fine should be less than two years of a company’s gross profit; that is to say that the minimum fine should be the gross profits of a company in two years. This is in effect the minimum fine discussed by the panel in its consultation document - but rather than linking it to a particular figure, it is linked to the profits of the company.
   
   
5. It should be noted that the profits of a company, can roughly be equated to an individual’s net earnings in a year, deposited in a saving’s account; and just as it would be inappropriate for a person to be able to simply write a cheque to pay a fine for manslaughter, so it should not be appropriate for a company. Indeed, in those cases where financial incentives are deemed either intentionally or unintentionally, to have produced the offence in question then, consistent with the philosophy behind the ‘proceeds of crime’ agenda currently driven by Government, it would be inappropriate for a company to be seen to be able to retain profits accrued across the period in which an egregious offence was produced, detected, then proven.
   
   
6. The CCA proposes that any fine imposed by the court would not need to be paid immediately; it should be able to be paid over a period of time. This would ensure that large fines can be imposed – reducing the risk of a company having to make workers redundant or reducing the money it would otherwise spend on safety.
   
   
7. The CCA also thinks that the proposed overlap between the levels of fines that could be imposed following corporate manslaughter and health and safety offences is simply not appropriate. The proposals would allow a company convicted of corporate manslaughter to be fined 2.5% of turnover, and a company convicted of health and safety offences,7% of turnover. This fails at all to reflect a clear difference that exists between these two offences: one involves proof of gross negligence, proof of causation, of senior management failure; and all tests must be proved beyond reasonable doubt. Health and safety offences, by contrast, do not require proof of causation or of senior management failure, and can be proved under a reverse burden of proof (see table above). In the CCA’s view there needs to be clear blue water between the levels of fines that can be imposed following corporate manslaughter conviction and a health and safety conviction.
   
   
8. Therefore in relation health and safety offences, the CCA’s view is that the range should be between 2.5 and 10% of the turnover, but not less than the last years profit.
   
   
9. The CCA is also of the view that when the court is considering what sentence should be imposed upon a subsidiary company, it should be able to take into account the existence and financial situation of the ultimate parent company. This is important to ensure that companies will not divide up their more hazardous activities into lots of different tiny companies simply to avoid a serious sentence if convicted of manslaughter. The court should be given a discretion to take this into account – and some guidance should be provided.
   
   
10. It is not clear from the proposals whether the SAP thinks that public bodies should be treated in entirely the same way as private companies – though the absence of any remarks about any special process for them suggests that this is the view of the panel. Whilst we agree that public bodies should be harshly penalized for commiting the offence of corporate manslaughter it is the view of the CCA that  imposing fines of this magnitude could well result in public bodies being unable to undertake public services. We therefore think the fines for public bodies should be significantly smaller percentages of turnover. Therefore, there are good grounds for considering a range of other, non-financial, penalties for bodies other than companies established to make a profit.

Publicity Orders
The CCA supports the approach of the Panel that the order should be imposed in every case of conviction. We also think that the panel needs to give guidance to the courts not only on the circumstances in which the order should be imposed but also on the options ‘for the order’ – that is to say the four options sets out in paragraph. 81. We also support the approach taken in paragraph 82.