For criminal offences committed after 12 March 2015, the Magistrates' Court is no longer constrained by maximum fines for the vast majority of offences.
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No. 11) Order 2015, has finally brought into force sub-sections (1), (2) and (4) of section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
This removes the cap on fines of £5,000 or more and limits on the sentencing jurisdiction of magistrates in England and Wales for many regulatory offences. Offences under the Health and Safety at Work etc Act 1974, and the regulations passed under that act, for example, previously had a maximum permitted sentence in the Magistrates' Court of £20,000.00 per offence. For offences committed after 12 March 2015, that limit has been abolished. The position is now the same as for cases sentenced in the Crown Court where the fines available are already unlimited.
Fines below £5,000 (whether expressed by reference to the standard scale or fixed fines) will continue to be capped.
The legislation is clearly designed to allow more cases to be completed more quickly in the Magistrates' Court, saving court time and allowing the Crown Court to focus on more serious, indictable offences that can only be sentenced there.
What effect will this change have on sentencing corporate defendants for regulatory offences?
First, lay magistrates tend to be inexperienced at dealing with regulatory offences. They often have few comparator cases to refer to, especially if there are multiple defendants or if the case is complex. This could lead to inconsistency and an increased possibility of excessive fines. This in turn will lead to more appeals. It will be more difficult for a defendant to receive clear advice about likely sentence which in turn will make the decision about whether to plead guilty or not guilty more difficult.
Second, it is inevitable that fines will increase. Magistrates treat the statutory maximum fine as a benchmark and it influences their decision, especially where the prosecutor is willing to confirm that they agree that the case can be dealt with by the magistrates. Remove the limit and magistrates will start to impose far higher sentences, especially for corporate defendants with large turnovers.
Sentencing guidelines were issued in July 2014 for environmental offences and a consultation has just ended on similar guidelines for health and safety offences, corporate manslaughter and food safety and hygiene offences. Such guidelines are intended to improve consistency but the guidelines are complex and the court will need to be taken through them carefully.
Defendants will need to consider very carefully, and at an early stage, how to proceed. More defendants may choose to plead not guilty as the commercial reason to plead guilty provided by the maximum sentence has been removed.
It may be that a judgment is needed about whether it would be better to plead not guilty and request a trial in the Crown Court in order to get the case before a judge, and then subsequently change the plea to guilty, even though that would prejudice the credit available for an early guilty plea.
There is no doubt that sanctions for regulatory offences, particularly for larger corporates, will increase substantially in the future. Many regulatory offences are strict liability and easy to commit. It is therefore more important than ever to identify regulatory risk and then manage it in order to prevent incidents, breaches, investigations and prosecution.
If a prosecution is brought, the strategy and tactics needed to achieve the best possible outcome will be critical.