Corporate manslaughter fines are to be “softened” just 18 months after the new offence became law, it has emerged.
The Sentencing Guidelines Council, which ensures consistency, said earlier this week that the level of fines for breaching the Corporate Manslaughter Act should not directly be linked with the firm’s turnover or profit, as originally suggested.
Organisations found guilty of corporate manslaughter could be fined millions of pounds, and rarely below £500,000, the council said in a consultation paper, but this figure could be far short of any amount that matched up to 10% of a convicted company’s turnover.
David Beckenham, health and safety consultant at Norton Rose law firm, said: “There does seem to have been a softening in the suggested approach for fines under the Corporate Manslaughter Act.”
He added the fines would not be on a par with those following conviction under competition laws, which are linked to the convicted company’s turnover.
“However, the suggestion that fines should seldom be below £500,000 means that the average fine will still be 10 times greater than it currently is,” he said.
The Sentencing Guidelines Council also said that the new sanction of Publicity Orders, forcing companies and organisations to make a statement about their conviction and fine introduced under the Act, should be imposed in virtually all cases.
Beckenham said: “The Council’s comments in respect of publicity orders should ring alarm bells given the potentially detrimental effect this could have on a company’s share price.”
The Corporate Manslaughter Act, introduced on 6 April last year, created a new offence for prosecuting companies and other organisations for gross failures in the management of health and safety with fatal consequences. The first prosecution under the Act is due to be heard in February 2010.
The Sentencing Guidelines Council consultation closes on 5 January 2010.