New guidelines recommend fining guilty firms a minimum of £500,000, irrespective of size
Fears have been raised that new sentencing guidelines for firms found guilty of corporate manslaughter could push small and medium-sized businesses under.
Under new guidance published this week by the Sentencing Guidelines Council, an earlier proposal that firms should be fined between 2.5% and 10% of turnover has been replaced by a recommendation that companies should be fined a minimum of £500,000, irrespective of their size.
Colin Finch, health and safety officer for Paul Strank & Sons Roofing, said the rule was unfair. He said: “Health and safety is hugely important, but fines this big could signal the end for some firms.”
Brian Berry, director of external affairs at the Federation of Master Builders, said: “About 70% of firms have a turnover of £500,000 or less – even a fine of £100,000 could wipe out most SMEs.”
Simon Joyston-Bechal, a partner in law firm Pinsent Masons, who is representing Cotswold Geotech, the first company to be tried under the legislation, warned that the new fines could hit smaller firms hardest. “The updated proposals are much more welcome for larger corporates,” he said.
Meanwhile, contractors convicted under the Corporate Manslaughter Act could be forced to publicise their guilt, according to the quango’s new advice.
This would require them to send accounts of their offences to customers, shareholders and the press. The text of the disclosure would be drafted by the Health and Safety Executive.
Firms could also be forced to advertise their guilt on their websites for three months.
Kirsty Gomersal, a director in the regulatory team of law firm Cobbetts, said: “The negative publicity that this would generate could push a struggling company over the edge.”