If the LIBOR rigging scandal has taught the state anything about regulation, it’s that fining large organisations can be lucrative. In 2014, the FCA handed out almost £1.5 billion in penalties compared with just £5 million in 2007.
Judging by the new food safety sentencing guidelines which were published earlier this month, this is a fact that may not have escaped the Sentencing Council’s attention.
Under the new guidelines, the courts will now be able to impose sentences of up to £3 million on a company for the most serious food safety offences. Michael Caplan QC who is a member of the Sentencing Council says of the new guidelines:
“We want to ensure that these crimes don’t pay. They can have extremely serious consequences and businesses that put people at risk by flouting their responsibilities are undercutting those that maintain proper standards and do their best to keep people safe.”
The level of fine depends on a number of factors including the level of actual or potential harm caused by the breach, the level of culpability of the company and most interestingly it’s turnover; with companies that have a turnover of more than £50 million a year being exposed to the highest sentencing regime, with a substantial starting point of £1.2million.
Rather than focussing only on the offence itself, judges and adjudicators will be told to consider the size of the company when deciding the appropriate level of fine. The Sentencing Council are blatant in their reasoning: in addition to a fine reflecting the seriousness of the offence, it should also remove any economic gain that may have been achieved by corner-cutting and have ‘a real economic impact’ on the company. Michael Caplan QC who is a member of the Sentencing Council has said that there have been concerns that the sentences previously imposed on large organisations have been too low.
Perhaps we are seeing the success of regulators in imposing mammoth fines on banks influencing the attitude of the authorities to other profitable organisations in the criminal courts. Whilst the diversion of funds from company profits to the state and its institutions may seem attractive, the courts need to be careful that they don’t kill the geese that lay the golden eggs.
If the LIBOR rigging scandal has taught the state anything about regulation, it’s that fining large organisations can be lucrative. In 2014, the FCA handed out almost £1.5 billion in penalties compared with just £5 million in 2007.
Judging by the new food safety sentencing guidelines which were published earlier this month, this is a fact that may not have escaped the Sentencing Council’s attention.
Under the new guidelines, the courts will now be able to impose sentences of up to £3 million on a company for the most serious food safety offences. Michael Caplan QC who is a member of the Sentencing Council says of the new guidelines:
“We want to ensure that these crimes don’t pay. They can have extremely serious consequences and businesses that put people at risk by flouting their responsibilities are undercutting those that maintain proper standards and do their best to keep people safe.”
The level of fine depends on a number of factors including the level of actual or potential harm caused by the breach, the level of culpability of the company and most interestingly it’s turnover; with companies that have a turnover of more than £50 million a year being exposed to the highest sentencing regime, with a substantial starting point of £1.2million.
Rather than focussing only on the offence itself, judges and adjudicators will be told to consider the size of the company when deciding the appropriate level of fine. The Sentencing Council are blatant in their reasoning: in addition to a fine reflecting the seriousness of the offence, it should also remove any economic gain that may have been achieved by corner-cutting and have ‘a real economic impact’ on the company. Michael Caplan QC who is a member of the Sentencing Council has said that there have been concerns that the sentences previously imposed on large organisations have been too low.
Perhaps we are seeing the success of regulators in imposing mammoth fines on banks influencing the attitude of the authorities to other profitable organisations in the criminal courts. Whilst the diversion of funds from company profits to the state and its institutions may seem attractive, the courts need to be careful that they don’t kill the geese that lay the golden eggs.