Out-Law News | 28 Sep 2016 | 4:38 pm | 2 min. read
However, even higher fines could be imposed on the largest companies in the future in circumstances in which judges believe this is necessary in order to achieve a proportionate sentence, according to health and safety law expert Kevin Bridges of Pinsent Masons, the law firm behind Out-Law.com.
"For a very large company, where turnover 'very greatly exceeds' £50 million, the guidelines allow the courts to move outside the suggested sentencing ranges to achieve a proportionate sentence," he said. "Comments by sentencing judges in related cases suggest that, in appropriate cases, fines could be up to 100% of pre-tax profits, even if this exceeded £100m."
In this case, although the company's £400m turnover "would justify moving outside the suggested offence range", the judge said that he was able to achieve a 'proportionate sentence' within the range provided for by the sentencing guideline. He would have imposed a fine of £7.5m, but reduced this by one third as Merlin pleaded guilty to breaches of section 3(1) of the 1974 Health and Safety at Work Act at an earlier hearing. "This is some way north of the top of the range for this offence category," said Bridges. Offences such as this, which are determined to have a high culpability and harm category 1, have a fine range for large companies of £1.5 – 6 million. "Perhaps the aggravating features and the previous Warwick Castle conviction took the fine initially beyond the bracket, but it was brought back down to within it once credit for the timely guilty plea was applied."
"The next issue we await the courts to determine is when the 'very large' company categorisation will be applied, and the court be at liberty to move outside of the ranges in order to achieve a proportionate sentence," he said.
The Smiler crash of 2 June 2015 left 16 people injured; some of whom were left with very serious injuries, including two young women who had to have legs amputated. The carriage that they were in collided with a stationery carriage on the same track after engineers overrode the ride's control system without the knowledge and understanding to ensure it was safe to do so, according to the Health and Safety Executive (HSE).
According to an HSE investigation, the "root cause" of the crash was a lack of detailed, robust arrangements for making safety critical decisions, leading to a series of errors by staff when working with people on the ride. The same investigation found no fault with the track, the cars or the control system which usually prevents the cars from colliding when the ride is running.
Merlin made technical improvements to the ride and changed their systems following the incident, according to the HSE.
Under new sentencing guidelines for use in health and safety, corporate manslaughter and food safety and food hygiene cases, courts in England and Wales must now first assess the seriousness of an offence based on the offender's culpability and the risk of serious harm, taking into account a non-exhaustive list of mitigating and aggravating factors. Fines are taken from a range depending on the size of the organisation, based on turnover or the equivalent, and are designed to ensure much higher fines for the largest companies convicted of the most serious regulatory breaches.
"Fines once regarded as exceptional and reserved for the most significant disasters involving multiple fatalities, such as train derailments, now look likely to become the norm for the largest organisations, with a similar escalation in fines for smaller companies," said Bridges.
"For companies, putting in place and properly implementing comprehensive systems to prevent accidents or near misses is likely to have significant benefits. Not only do such systems reduce work-related ill health, but they also minimise the risk of costly health and safety enforcement action and the associated negative publicity," he said.