Sentencing the elephant: New guidance, same grey area for VLOs

Background

The Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline (“the Guideline”) was introduced in February 2016 in response to growing concerns that fines for health and safety offences lacked consistency and failed to reflect the seriousness of these breaches. The Guideline aimed to bring greater transparency and structure to the sentencing exercise for Judges who are often unfamiliar with sentencing health and safety offences. This marked a pivotal shift, with the level of fines increasing year on year, with six-figure fines now a regularity.

However, there was a notable grey area within the Guideline when it came to sentencing very large organisations (“VLOs”) as the Guideline offered no upper limit or structured approach for sentencing entities whose turnover “very greatly exceeds” the £50 million benchmark for a large organisation. This left the courts relying on broad discretion and case-by-case judgment, inevitably leading to unpredictability for VLOs and judicial improvisation.

The issue came to a head in several landmark cases, prompting calls from legal practitioners, regulators and industry bodies for a more structured approach. In response, the Sentencing Council included the matter in its 2024-2025 consultation (“the Consultation”), seeking to bring clarity to a problem that has long operated in the shadows of the Guideline.

The Consultation and Response

The Consultation emerged as part of the Sentencing Council’s fourth annual consultation on miscellaneous amendments, which launched in October 2024 and closed on 27 November 2024. This followed concerns raised by the Environment Agency (EA), supported by the Secretary of State for Environment, Food & Rural Affairs, who contended that the existing guidance was too limited and lacked clarity for courts dealing with VLOs. The Sentencing Council invited responses from a wide range of stakeholders, including legal professionals, regulators, the judiciary and the public. The proposal sought to expand the existing wording to reflect the nuanced approach required when dealing with organisations whose turnover “very greatly exceeds” the £50 million threshold, to ensure that fines have sufficient impact to promote compliance, without being arbitrary, in line with the ethos of the Guideline.

Eversheds Sutherland’s EHS Team contributed to the Consultation by garnering the views and opinions of leading practitioners – both Solicitors and Barristers – who also have decades of experience in representing corporate clients subject to prosecution by the Health and Safety Executive (HSE), EA and other regulatory bodies. As practitioners with first-hand experience of the sentencing exercise undertaken by both Magistrates’ and Crown Courts across England and Wales, we wanted to provide reliable data to the Sentencing Council in support of our response. Our cross-practice surveys revealed that 48% of the respondents felt that courts struggled with deciding whether an organisation was a VLO in the first instance. Additionally, 80% of respondents believed that courts struggled with deciding what constituted a “substantial upwards adjustment” as required at Step 3 of the Guideline.

The Sentencing Council published its response to the Consultation on 28 May 2025. The response outlines that, from 1 June 2025, Step 2 of the Guideline will include the following guidance to assist Judges when sentencing VLOs:

“Where an offending company’s turnover or equivalent very greatly exceeds the threshold for large companies, courts should consider fines outside the range for large companies it may be necessary to move outside the suggested range to achieve a proportionate sentence.
 
There is no precise level of turnover at which an organisation becomes "very large". In the case of most organisations it will be obvious if it either is or is not very large. 

In the case of very large organisations the appropriate sentence cannot be reached by merely applying a mathematical formula to the starting points and ranges for large organisations.
 
In setting the level of fine for a very large organisation the court must consider the seriousness of the offence with reference to the culpability and harm factors above and the aggravating and mitigating factors below, the purposes of sentencing (including punishment and deterrence) and the financial circumstances of the offending organisation. Regard should be had to the principles set out under at steps 3 and 4 below. 

Particular regard should be had to making the fine proportionate to the means of the organisation, sufficiently large to constitute appropriate punishment depending on the seriousness of the offence, and sufficient to bring home to the management and shareholders the need to comply with health and safety legislation.” 

In short, the Guideline restates that, where an organisation’s turnover very greatly exceeds the threshold for large organisations, Judges should consider moving outside the standard fine ranges to achieve a proportionate sentence. It clarifies that VLO status is not linked to a fixed turnover figure, as it is considered that in most cases it will be “obvious” – meaning the subjective interpretation of what is “obvious” to the sentencing Judge remains.

However, the Guideline now makes clear that fines for VLOs should not be calculated using a simple formula based on turnover; instead, courts must take into account the seriousness of the offence, the organisation’s financial circumstances and the need for punishment and deterrence.

The elephant in the courtroom

Sound familiar? It should - this update largely formalises the approach courts have already been taking in practice. The Sentencing Council’s update gladly adds a layer of formal recognition but it feels to be less a revolution and more a rubber stamp on existing judicial practice and case law.

In R v Places for People Homes Ltd [2021] EWCA Crim 410, the Court of Appeal famously likened the identification of a VLO to spotting an elephant: “you know one when you see it”. It also reaffirmed that whilst the Guideline provides a structured approach for micro to large organisations, it offers no formula for VLOs, leaving Judges to rely on instinct and precedent.

Similarly, in R v Whirlpool UK Appliances Ltd [2017] EWCA Crim 2186, the Court of Appeal rejected any “mechanistic extrapolation” of fine levels based on turnover multiples. Instead, it emphasised that sentencing must remain flexible and proportionate, even if that means moving well beyond the Guideline ranges.

The Sentencing Council’s update is undoubtedly a step in the right direction, although, it does feel somewhat like a missed opportunity to those seeking a more principled and predictable framework. That said, we welcome the inclusion of clearer language emphasising that fines should be proportionate to the seriousness of the wrongdoing and based on a careful assessment of culpability, harm and financial circumstances. The revised wording has added clarity, even if modest, and provides a more transparent foundation for future sentencing decisions. It also reinforces the principle that justice should be measured not just by size, but by substance.

For now, when it comes to sentencing VLOs, it seems the more things change, the more they stay the same.

If you would like to discuss the implications of the updated Guideline for VLOs, including how it may affect your organisation, please contact a member of the team for further advice and support.