High Court Guideline Sentencing Decision for Health and Safety Prosecutions
Stumpmaster & Ors v Worksafe New Zealand  NZHC 2020
Since the Health and Safety at Work Act 2015 (HSAWA) substantially increased the maximum penalty for health and safety offences, there has been inconsistency in the District Court’s approach to setting fines. This has prompted several defendants to appeal the fines awarded against them. Yesterday, the High Court released its long-awaited decision which clarifies the correct approach to sentencing under the new Act and sets new guideline culpability bands.
Approach to sentencing
The Court has kept the general approach to sentencing that was established in Department of Labour v Hanham and Philp Contractors Ltd. However, because the HASWA adds a number of potential orders available to the sentencing court, the Court says a four-step approach is now required:
(a) assess the amount of reparation;
(b) fix the amount of the fine by reference first to the guideline bands and then having regard to aggravating and mitigating factors;
(c) determine whether further orders under ss 152–158 of HASWA are required (regulator’s costs, adverse publicity orders, restoration orders, project orders, court ordered EU, injunctions and training orders); and
(d) make an overall assessment of the proportionality and appropriateness of the combined packet of sanctions imposed by the preceding three steps. This includes consideration of ability to pay, and also whether an increase is needed to reflect the financial capacity of the defendant.
The Court remains of the view that what actual harm occurred is a relevant and important feature in fixing placement within the bands. That a defendant is “lucky” no-one was hurt does not absolve it of liability under s 48, but the actual harm caused is still a relevant sentencing factor in determining how serious the offence was.
In regard to the culpability bands, the Court has maintained the existing model of the graduated approach in Hanham.
There were three main approaches that the Court considered: WorkSafe’s four-band proposal, a six-band model, and an approach which assessed the particular case by reference not to the specific bands but to comparable decisions. The parties in these appeals all suggested the four-band approach be adopted and the Court agreed.
The High Court was attracted to the broad generalised assessments achieved by the four bands rather than creating a requirement on courts to definitively place the offending within a tighter grouping. It says that “the bands are only intended as guidelines and sentencing will always be a case specific exercise.”
The new guideline bands for fixing a fine under the HASWA are as follows:
low culpability: Up to $250,000
medium culpability: $250,000 to $600,000
high culpability: $600,000 to $1,000,000
very high culpability: $1,000,000 plus
Impact on reparation
The Court has confirmed that any increase in fine levels should not lower the size of reparation orders. Whether they stay the same or increase, the proportionality assessment at step four will control the overall penalty. Further, if, as it seems likely, adjustment for financial incapacity is increased, the approach settled in Hanham and continued in this case will ensure any such adjustment is made to the level of the fine and will not affect the reparation order.
Comment – Bradley Alcorn
The High Court’s decision to follow the Hanham approach, with some adjustments, is a positive step. Insurers will be familiar with the approach to sentencing under Hanham and the Health and Safety in Employment Act 1992 and this decision helps to clarify the approach under the HASWA which, until now, was anything but clear.
As the Court notes, each case will turn on its own facts, but this decision means that defendants and their insurers will now have greater certainty as to what factors will be relevant for sentencing, how those factors will be considered and how fines will be calculated. This means a defendant can better determine the penalties it might expect to face at sentencing and better assess its options, such as whether it may wish to pursue an enforceable undertaking as an alternative to prosecution.