Bell Gully Partner Tim Clarke and Solicitor Charlotte Joy discuss the recent High Court decision in Stumpmaster & Others v WorkSafe New Zealand, which was the court’s first decision on the correct approach to sentencing under the Health and Safety at Work Act 2015.
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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) 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 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 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.
Partner Tim Clarke leads the employment team and provides expert advice on all aspects of employment law including disciplinary and personal grievance hearings, restraints of trade and the protection of goodwill and confidential information, restructuring and redundancy proposals, exit packages, employment law implications arising on the sale or transfer of all or part of a business, all aspects of relationships between employers and unions, and Privacy Act and Human Rights Act issues. An experienced health and safety lawyer, Tim advises clients on creating and maintaining a safe workplace, including systems, policies and procedures that ensure compliance and minimise risk, through to managing health and safety investigations and prosecutions. Tim is also a sought after advisor in the growing area of privacy law.
The Legal 500 Asia Pacific 2018 names Tim as a leading lawyer in employment and is praise for applying “a litigator’s perspective to health and safety matters”. Clients say Tim is “approachable” and “commercially focused”, according to The Legal 500 Asia Pacific 2017. It ranks him as a leading lawyer in employment, while the previous edition described him as a “formidable advocate”. Tim is also listed as one of the leading New Zealand labour and employment specialists by Who’s Who Legal. Chambers Asia Pacific 2018 ranks Tim as a leading lawyer noting he is recognised for the quality of his advice on health and safety matters including Worksafe issues. In 2016, Tim was appointed to the Health and Safety Law Committee by the Council of the Auckland District Law Society. Contact Tim at tim.clarke@bellgully.com
Solicitor Charlotte Joy works in the Employment and Health and Safety team. She has worked on legal issues based on personal grievances, redundancies, employee performance, corporate due diligence, collective bargaining, general employment law compliance and health and safety compliance. Charlotte strives to continue to develop a good work ethic by being flexible and approachable. She enjoys opportunities to work in teams and enjoys the challenge of leadership roles. Contact Charlotte at charlotte.joy@bellgully.com
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