Sentencing Guidelines for New Zealand's Health & Safety at Work Act 2015

Posted by Craig Thornton

Video Background

In this video, Susan Rowe, Partner at Buddle Findlay discusses what we can learn from the High Court's recent first decision on sentencing under the Health and Safety at Work Act 2015.

The old approach was a three stage process, now the courts have added in an extra stage. Susan discusses each of these stages with some great examples.

These examples give a guide on what to expect for those companies who have breached the Health and Safety legislation. 


Watch this 12 minute video to find out everything you need to know. 


Video Transcription

Hello, I’m Susan Rowe from Buddle and Findlay.

I would like to talk to you today briefly about the Health and Safety at Work Act and some sentencing guidelines that the courts have recently given us.

You might be aware that the Health and Safety at Work Act is two years old now. But up until recently we didn’t have any strong guidance from the court about how the court was going to approach sentencing.

So there’s been about eighteen cases to date under the new Act. But it wasn’t until the last two months the High Court was able to give us some really strong guidelines.

So we’re going to talk about that case, it’s called Stumpmaster and WorkSafe NZ and it’s really three cases that were bundled together that go under that one name.

So in that case the court took the opportunity to work out how it was going to approach the Health and Safety Work Act sentencing guidelines. And they said that well it’s probably similar to how they approached it under the old Act but instead of a three stage process they’re going to add in another stage.

So there’s four stages that the court look at. We’re going to talk about each of those four stages.


1. Reparation

So the first is reparation. And the court starts with that, looking at how much money the victim should receive and to be fair there was not a lot of change to reparation principles.

So that’s going to be approached in the same way that the courts have always approached reparation.

Probably the changes were to the next three stages in the process.


2. Guideline Bands

So the first real change was to the guideline bands.

You’ll probably remember that the guidelines have increased somewhat, about six times what they use to be under the old Act.

So there’s there’s four key starting points that the court will look at to assess.

The four bands are low culpability, now you’ll remember that use to be only up to $50,000 for a company and that’s gone up. The courts said they’re going to start at $0 - $250,000.

After low there’s medium culpability. That used to be from $50,000 - $100,000 and that’s increased as well. That’s now $250,000 to $600,000.

High culpability has increased and it’s now sitting between $600,000 - $1,000,000.

And there’s also very high culpability which is $1,000,000 - $1,500,000.

So after fixing reparation the court then decides where are you sitting on those scales and they’ll look to WorkSafe to determine and say where they think that you’re sitting.

So after fixing those guidelines and looking at the starting point, the court then takes into account aggravating and mitigating factors.

And that’s probably where the court and the Stumpmaster case made the most changes.

So there used to be some pretty set guidelines that the courts would take. There’s always a 25% discount for an early guilty plea and the court did say yes that will still remain so it’s still going to be 25%. The earlier you plead guilty is important, you’ll get a good discount for that still.

The bit that the court took a close look at was really the global discounting that was going on at this point.

Previously the court would assess all the mitigating factors together. That is, things like your efforts to address the nature of the problem.

The steps you’ve shown to fix the problem, how early that you assisted the victim, anything I suppose, the good things you’ve done after the accident or the incident.

It used to be that the court would look at all those good things and say that’s probably about a 30% discount, and quite often WorkSafe will be quite happy to go with a 30% discount if you’d shown that you had done, you know taken reasonable steps to mitigate what had happened. And what the court said in the Stumpmaster (case) was that they didn’t like a blanket, broad percentage discount being applied in every case.

So they were quite critical of the way that WorkSafe had been applying that standard 30% discount. They said they wanted to see WorkSafe examine each of those mitigating factors more closely, and they said that really you’re not going to get a 30% discount unless you can show that you have several of those mitigating factors to a reasonably high degree. Or at least one of the factors to a very high degree.

Probably most significantly they said that you’re not going to get 30% discount anymore if you’ve got a previous bad record. If you have a recent history of, and by recent anything sort of in the 3-5 year mark, is probably going to count against you.

So I guess the key to take away there is that the courts are going to be more rigorous in looking at these mitigating factors, and it’s probably you’re not going to get so easily the large global 30% discount for being good and taking good steps after an accident that you did in the past.

You’re really going to have to, I guess be able to show WorkSafe and the court that you have actually taken steps:

  • You’ve helped the victim really early
  • You’ve identified what went wrong
  • You’ve taken steps to ensure that the accident or incident won’t happen again.

They also looked at, what the approach of a standard reduction or I guess a discount to reparation that was occurring. Sometimes there was sort of a dollar for dollar reduction in the fine, dependent on how much you paid the victim for reparation.

The courts said really it didn’t like that sort of standardised exact percentage being applied across the board for discounting down. Simply because of the amount you paid for reparation. It was going to take just a careful look at how much reparation was paid, and look at, in terms of not just the dollar amount. The reparation should broadly sort of reflect the help that the victim needed. And how early on that payment and that help was given.


3. Consider Other Orders

We’ve talked about the first two stages. That’s the reparation and the guideline bands the court looks at.

So if we just take the third stage, that’s where the court wants to look at any other orders that it feels are appropriate. And they’ve now got much wider tools that they can use. There’s quite a number of orders that the court can use.

But interestingly out of all of the cases, of which I said there’s been about 18 up until the last month. They haven’t actually used anything other than one order under section 1.5.2 that you pay the costs of WorkSafe.

So in terms of what you’ll regularly get, you’ll now always get an order to pay those costs of WorkSafe. WorkSafe have been quite good in terms of the amounts that they’ve been seeking, very reasonable. I mean, they do have the ability to seek far greater amounts than they have But they’ve kept them reasonable amounts of their expenses so you’ll need to factor that in in terms of when you’re looking at risk in addition to reparation and fines.

There are other orders the court can make, some of them are adverse publicity orders, orders for restoration, there are injunctions, training orders which would be quite interesting.

I recently heard a District Court Judge talk about how he thought the District Court would start to use those new orders but the right opportunity just hasn’t presented itself just yet.


4. Holistic, Overall Approach

So they’re the first three stages that the court will look at.

After considering all the other orders that the court might use, they then turn to the final stage and that’s a more holistic, overall approach.

The court steps back and looks at the amount of reparation, the amount of the fine and works out is that appropriate. Is it a reasonable amount you need to pay for the actual incident?

Now at this point in time the court can look at your ability to pay.

This is a really important step because what’s happened in the last eighteen cases is that that’s definitely been something the courts looked at. In around ten cases, they have reduced the fine at this stage after hearing evidence about the defendant’s ability to pay.

It is really important that if your company has got a limited amount of funds or restricted ability that you show the court and give evidence on that point. Unless you put that evidence forward they’re not going to consider it. But out of those ten cases where they were reduced, there were 3 cases where the fine was reduced to zero.

You can see that it could be a useful way of actually getting your risk factor down. The court will basically take the approach that the point of the Health and Safety at Work Act is not to put companies in to liquidation, as a result of these accidents and incidents. What they want are companies to learn from their mistakes. Take the steps to ensure that accidents don’t happen again. But they’re not wanting small businesses to go under because of an accident so they will be reasonable in that regard.

So overall, after laying down those general guidelines, the court and Stumpmaster looked at the three cases that it had before on an appeal.

And what they did was they moved the amounts around the fine internally, by that I mean that they broke down the starting point, what the band was, they looked at the discounting factors and they moved the amounts around.

So in many instances out of the three cases they decided that the discounting factors weren’t accurate. They kept the 25% discount for an early guilty plea but they didn’t like the 30% or the high or the 25% discounting factors that had been applied. They wanted to make a smaller amount for discounting. This was particularly where one or two of the defendants in those three cases had had very similar or recent accidents in the last three years.

Overall though the general amounts that were awarded by the High Court didn’t differ too much from the District Court.

What that shows us is that out of all the previous sort of eighteen cases, before the court had these new guidelines, they were still hitting the mark quite well, they were still reasonably accurate. The way they got to that end result might have been slightly different, but the overall amounts were the same. And what that shows us is that we can still use those eighteen cases as rough guidelines as to what you might still get if you had a similar accident or incident.

It’s not that this case has come along and changed everything, it just shows that while there are some more structured guidance, the overall amounts are going to be similar to what’s been handed out in the last two years since the Act came into place.

So that’s really the guidance that the courts given us in Stumpmaster.

I think that its helpful in the sense that we all now know what the starting point is. They’ve been very clear on the bands. And they’ve been a lot clear on telling you how you’re going to get those discounts for early guilty pleas. And more importantly for any mitigating or aggravating factors that might happen.


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