Miscellaneous amendments to sentencing guidelines 2024 - Sentencing very large organisations - Ministry of Justice

Sentencing very large organisations

The issue

In response to last year’s consultation (which included proposed changes to the environmental guideline for individuals), the Environment Agency (EA) took the opportunity to raise an issue of fines where the offender is a very large organisation (VLO). The EA submitted that the current wording in guidelines for sentencing a VLO is too limited and that courts would benefit from more and clearer guidance. This submission was endorsed by the Secretary of State for Environment, Food & Rural Affairs.

The EA also drew attention to: “the fact that the majority of the VLO cases we prosecute are now being sentenced in the Magistrates’ Court rather than the Crown Court”. The EA expressed the view that it would be preferable for some of these cases to be committed to the Crown Court for sentence.

The proposed change

The Council considered that it is undesirable for courts routinely to need to have recourse to case law in order to apply a sentencing guideline and that 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 in the environmental guideline for organisations reads:

Very large organisations

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 say:

Very large organisations

Where an offending 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.

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.

There is similar wording relating to sentencing very large organisations in the following guidelines:

If adopted, the expanded wording would also be added to these guidelines (suitably adjusted to take account of different numbering of steps etc.).

The allocation of either way cases to magistrates’ courts or the Crown Court is governed by the Allocation guideline (produced by the Sentencing Council) and by Criminal Practice Directions (made by the Lord Chief Justice last updated in 2023). Matters relating to the Criminal Practice Directions and their application are outside the Council’s remit, but the Council did consider that it would be helpful for the Allocation guideline to cross refer to the relevant practice direction (see the section on the Allocation guideline).

The impact

An organisation cannot be sentenced to a community order or imprisonment and therefore these proposals will not have any impact on prison or probation resources.

As the proposed change to guidelines reflects current case law, the impact of the change is likely to be minimal. However, it is possible that the change could result in higher fines in a small number of cases.

13. Do you agree with the proposed addition of wording relating to sentencing very large organisations? If not, please provide any alternative suggestions.