Is Your Business a Very Large Organisation? Consultation on Sentencing Guidelines

The Sentencing Council has issued a consultation seeking views on a series of proposed changes to existing guidelines.

One proposed addition relates to the guidance within the guidelines on sentencing very large organisations (VLO).

This is in response to the Environment Agency (EA) raising an issue of fines where the offender is a VLO. The Secretary of State for Environment, Food & Rural Affairs endorsed the EA’s submission that the current wording in guidelines for sentencing a VLO is too limited and that courts would benefit from more and clearer guidance.

The EA also pointed out that “the majority of the VLO cases we prosecute are now being sentenced in the Magistrates’ Court rather than the Crown Court”. Consequently, the EA believes it would be preferable for some of these cases to be committed to the Crown Court for sentence.

The Council considers it “would be useful to encapsulate the guidance given by the Court of Appeal on sentencing a VLO in the relevant guidelines so that the information is clear, accurate and readily available to all guideline users.”

The current wording for very large organisations reads:

Where a defendant company’s turnover or equivalent very greatly exceeds the threshold for large companies, it may be necessary to move outside the suggested range to achieve a proportionate sentence.

The proposal is to expand this to include:

There is no precise level of turnover at which an organisation becomes "very large". In the case of most organisations it will be obvious if it either is or is not very large.

In the case of very large organisations the appropriate sentence cannot be reached by merely applying a mathematical formula to the starting points and ranges for large organisations.

In setting the level of fine for a very large organisation the court must consider the seriousness of the offence, the purposes of sentencing (including punishment and deterrence) and the financial circumstances of the offending organisation. Regard should be had to the principles set out under “General principles in setting a fine” above and at steps 5 to 7 below.

Particular regard should be had to making the fine proportionate to the means of the organisation, sufficiently large to constitute appropriate punishment, and sufficient to bring home to the management and shareholders the need for regulatory compliance.

As an organisation cannot be sentenced to a community order or imprisonment these proposals will not have any impact on prison or probation resources. However, the consultation notes that the change could result in higher fines in a small number of cases.

The Council asks whether the proposed wording relating to VLO sentencing is agreed, or for alternative suggestions.

The consultation closes on 27 November 2024. Full details can be found here. We will keep this under review and revert with an update once any further comment or guidance is issued by the Sentencing Council.