New Zealand: High Court decision on health and safety sentencing released

Last Updated: 11 August 2018
Article by Brian Nathan

Most Popular Article in New Zealand, August 2018

The High Court has released its decision on the appeals of sentencing in the District Court for health and safety prosecutions. This decision, Stumpmaster Ltd v WorkSafe New Zealand; The Tasman Tanning Company Ltd v WorkSafe New Zealand; Niagara Sawmilling Company Ltd v WorkSafe New Zealand [2018] NZHC 2020, will be the equivalent of Hanham and Philp under the previous legislation.

The High Court upheld the higher fines that we have seen awarded in the District Court since the Health and Safety at Work Act 2015 (HASWA) came in to force. They also raised concerns about the extent of discounts being applied to those fines for mitigating factors.

The effect of the High Court's decision means that it will be important for a defendant to respond immediately and appropriately to any incident. Greater consideration will be placed on exactly how a defendant assisted the people affected by any incident.

The higher level of fines also means that a defendant will need to consider their ability to pay a fine, which will potentially result in higher costs for defending a prosecution, if evidence from an accountant is required.

The general sentencing approach

The High Court has decided that the approach to sentencing under HASWA requires four steps:

  1. Assess the amount of reparation;
  2. Fix the amount of the fine by reference first to the guideline bands and then having regard to aggravating and mitigating factors;
  3. Determine whether further orders are required, including an order for payment of WorkSafe's costs, adverse publicity orders, or restoration, project, or training orders; and
  4. Make an overall assessment of the proportionality and appropriateness of the total sentencing, including considering the defendant's financial capacity.

The High Court noted that the defendant's financial capacity could result in either the reduction of the fine, or an increase so that a fine will not be treated as a licencing fee.

Starting points for fines

The District Court decisions appealed against were all for a breach of section 48, which has a maximum fine of $1.5 million. The High Court has retained similar proportionate levels as under Hanham and Philp, which had the top of each band at 20, 40, 70, and 100 per cent. The new four guideline bands for fixing the fine are:

  • Low culpability, up to $250,000
  • Medium culpability, between $250,000 and $600,000
  • High culpability, between $600,000 and $1,000,000
  • Very high culpability, $1,000,000 plus.

Mitigating factors

After the starting point for a fine is fixed, the court then considers whether there are any aggravating and/or mitigating factors to increase or lower the fine, respectively.

The High Court determined that it also needed to review the level of discounts routinely being given for reparation already paid, remorse, co-operation, and a previous good record. The High Court reviewed the discounts which had been allowed for these factors in the decisions to date, which ranged between 25 and 45 per cent. They decided that:

"Such routine standard discounts give cause for concern and have distorted the sentencing process by so reducing the starting points that outcomes become too low."

It has long been the court's position that a 1:1 credit should not be adopted for reparation payments. As it is now likely that a starting point of $500,000 to $600,000 will be common, a 10 per cent reduction for reparation is likely to be greater than the amount of reparation paid. Although not recommending an overall amount, the High Court said that:

"By way of general guidance, we consider a further discount of a size such as 30 per cent is only to be expected in cases that exhibit all the mitigating factors to a moderate degree, or one or more of them to a high degree. That is not to place a ceiling on the amount of credit, but to observe a routine crediting of 30 per cent without regard to the particular circumstances is not consistent with the Sentencing Act."

The High Court noted that:

"In this area of credit for reparation, we consider the efforts of the defendant to assist a victim from the outset merit particular noting. Those are times of greater stress and uncertainty for the victim and family, and genuine efforts to assist from the outset are reflective of the matters for which this extra credit is given."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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