First HSWA appeal confirms existing sentencing approach and sets guidelines for fines

Friday 10 August 2018

Authors: Tim Clarke and Charlotte Joy

​​​A long-awaited High Court decision has confirmed the approach sentencing courts should take when fixing fines under health and safety legislation, clearing up inconsistency in decisions by the District Court that has emerged since the new laws first took effect two years ago.​

The High Court's first decision on the correct approach to sentencing under the Health and Safety at Work Act 2015 (HSWA), delivered yesterday, provides greater certainty to WorkSafe and the regulated community by confirming the existing approach to sentencing. It also maintains the existing model for fines, and attaches values to the range of fines that may be given.​

Background

Stumpmaster & Others v WorkSafe New Zealand [2018] NZHC 2020 involved three appeals by companies against fines awarded by the District Court under the HSWA. Since the first District Court sentencing in August 2017​ we have seen an inconsistent approach by the District Court which has not provided clear guidance for defendants. Given this uncertainty, a Full Court of the High Court was convened to hear the three appeals together, review the existing sentencing guidelines and provide guidance for sentencing.

Approach to sentencing

The High Court confirmed that a court's approach to sentencing remains the same, with one minor modification to reflect a further range of orders that a sentencing court must consider. 

The sentencing process now involves four steps.

  1. Assess the amount of reparation to be paid to any victim.

  2. Fix the amount of the fine by reference to culpability bands, and then adjust the starting point for any aggravating and mitigating factors.

  3. Determine whether further orders are required (e.g. adverse publicity orders, training orders, or payment of WorkSafe's costs).

  4. Make an overall assessment of the proportionality and appropriateness of the total imposition of reparation and fine on the defendant.

The last step requires the sentencing court to consider the defendant's ability to pay the fine, and whether an increase in the fine is required to reflect the financial capacity of the defendant. A defendant's ability to pay the fine has featured prominently in early decisions under the HSWA.​

Sentencing bands

The various District Court decisions have differed in the number of culpability bands which may be used to identify a starting point for the fine, and the values attached to those bands. In Stumpmaster the appellants claimed that the fines awarded by the District Court were excessive and represented a six-fold increase across the range, and the sentencing court had not taken a principled approach. 

While all parties to the appeal agreed that a four-band approach was appropriate, there were differing views as to the range of each band. After hearing argument, the High Court fixed the new guideline bands as follows:​

Low culpabilityUp 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

The Court considered the list of relevant factors in the HSWA for establishing the starting point were covered by existing considerations, and therefore these factors essentially remained the same. Once a starting point for the fine is established with reference to the culpability bands, any aggravating or mitigating factors should then be taken into account. 

Other notable points

The High Court was concerned that standard discounts for mitigating factors were routinely given, and said that more analysis was required before large discounts should be available. It stated that a discount of 30% should only be expected in cases that exhibit all the mitigating factors (payment of reparation, remorse and co-operation with WorkSafe, remedial action taken, and favourable safety record) to a moderate degree, or one or more of them to a high degree. 

Importantly, the High Court stated that genuine efforts to assist the victim and family from the outset merit particular noting, and should result in credit. Discounts for these mitigating factors are separate from the 25% discount which may be available for defendants who enter an early guilty plea.

Despite the HSWA being modelled on Safe Work Australia's Model WHS Law (which has been adopted by states and territories across Australia), the High Court was not persuaded it should look to Australian decisions for guidance on the level of fines.

Finally, the High Court said any increase in the level of fines should not lower the size of reparation orders. These awards are compensatory to victims and are governed by the Sentencing Act 2002, rather than HSWA.​

Our experienced employment and workplace ​safety team regularly advises employers on how to comply with the HSW Act. If you or your business has any questions regarding any of the issues raised in our article, please contact one of our team​ or your usual Bell Gully adviser. 


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Tim Clarke

    Partner Auckland
  • Rachael Brown

    Partner Wellington
  • Rob Towner

    Partner Auckland
  • Liz Coats

    Senior Associate Auckland
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