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Safeguard Magazine

Legal viewpoint—Sentencing clarified

Inconsistent approaches to sentencing under the HSW Act 2015 have produced uncertainty, but a recent High Court decision offers clarity, write GREG CAIN and MALLORY WARD.

The High Court recently heard three appeals – lodged by Stumpmaster Ltd, Tasman Tanning Co, and Niagara Sawmilling Co Ltd – against fines imposed by the District Court under the Act. The much-anticipated decision was released on 9 August and offers clarification that the proper sentencing approach that should be followed under the Act requires a four-step process.

STEP 1: ASSESS REPARATION

The Court explained that the increase in fine levels under the new Act should not lower the size of any reparation orders. Defendants can, therefore, expect these to remain largely the same.

STEP 2: FIX THE FINE

The Court must fix the fine, first by reference to the following guideline bands, and then must have regard to aggravating and mitigating factors.

  • • 
    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 to $1,500,000

In its decision, the Court accepted that a 25% reduction remains available for defendants for an early guilty plea (as was the case under the previous HSE Act 1992).

However, the Court was very critical of applying further “standard” discounts for other mitigating factors without considering the specific circumstances of each case, as doing so was not consistent with the Sentencing Act, and could result in outcomes being too low.

The Court went on to explain that a 30% discount should only be expected where all mitigating factors (reparation already paid, remorse, previous good record and co-operation) are present to a moderate degree, or one or more of them to a higher degree. As a result, defendants can expect that they will likely be required to produce evidence in respect of each mitigating factor, and a routine discount of 30% will not necessarily be accepted, even by agreement with WorkSafe.

The Court also commented that defendants with previous convictions should not receive the same global discount as those with no previous convictions.

STEP 3: FURTHER ORDERS

The Court must determine whether further orders under sections 152-158 of the Act are required. These include costs orders, adverse publicity orders, restoration orders, injunctions, work health and safety project orders, and training orders.

The Court commented on orders for costs payable to WorkSafe. It said that WorkSafe’s current approach of focusing only on lawyer litigation costs (and not investigation costs, for example) is modest, and the legislation likely “contemplates rather more cost recovery than that”.

STEP 4: PROPORTIONALITY

The Court must make an overall assessment of the proportionality and appropriateness of the “combined packet” of sanctions imposed by the steps above. The Court explained that this step includes the consideration of the defendant’s ability to pay, and whether an increase is needed to reflect the financial capacity of the defendant.

While the Court acknowledged that adjustments could be made to reduce the overall sanction for financial incapacity reasons, it clearly stated that those adjustments should not affect any reparation orders. Rather, they should be made to the level of the fine.

COMMENT

The degree of increase in fines has to some extent been over-stated in the various commentaries about the HSW Act, in the media and elsewhere. Most of the charges laid under the Act have related to the new category of offence, namely failing to comply with a duty and thereby exposing someone to a risk of death or serious injury or illness.

Under the now-repealed HSE Act 1992, most charges related to the lesser offence of failing to take all practicable steps to comply with a particular duty (exposure to a risk of death or serious injury/ illness was not required). This lesser offence, which still exists under the current Act, attracts lower maximum fines.

While the maximum fines have increased, in part the higher fines we are seeing are down to the new category of offence being utilised by WorkSafe.

This was a long awaited and clear decision, which offers much greater clarity in many areas of the sentencing process under the Act.

Greg Cain is a partner and Mallory Ward an associate with Kensington Swan in Wellington.

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