Following the launch and review of their fourth annual consultation, the Sentencing Council for England and Wales has now published an amended version of its Sentencing Guidance, that came into force on the 1st of June 2025.

The Sentencing Council recognised concerns that current guidance did not provide sufficient clarity on sentencing Very Large Organisations (“VLO”). The concern was initially raised by the Environment Agency, with the support of Defra’s Secretary of State, who thought the wording was too limited and Courts needed clearer guidance to deal with VLOs.

With these amendments, VLOs found guilty of serious offences such as corporate manslaughter, health and safety breaches, environmental offences and food safety and hygiene breaches should expect substantially higher fines.

However, a fixed definition of a VLO (or a specific financial threshold to define when an organisation becomes a VLO) has still not been provided with these amendments. Any sentencing Judge will retain the discretion and subjective interpretation of the guidance as to when it is “obvious” that a company is a VLO.

This leaves some room for uncertainty for organisations as to how any sentencing exercise may be conducted and how any sentencing Judge may seek to move “outside the range”.

In an important decision[1], the Court of Appeal addressed the term VLO, set out principles to sentencing very large organisation, which is largely decided case by case. In this case, the Court applied the VLO definition to a business with a turnover of £250 million, which could be taken as the starting point to consider an organisation as “very large”.  

Under the Guidance, large organisations are defined as those with an annual turnover of £50 million or more. Until now, Courts have had discretion to impose fines outside the standard ranges for organisations with a turnover “very greatly” exceeding the threshold for large companies, but this discretion was leading to unpredictability for VLOs. These amendments reflect the commitment of the Council to impose proportionate penalties to companies’ financial means.

The key amendments include:

  • Stronger judicial guidance: Wording has been amended to strengthen judicial consideration: “Courts should consider fines outside the range for large companies to achieve a proportionate sentence”. With this amendment, Courts should actively consider the financial scale of a VLO when setting fines.
  • Reinforced sentencing principles: Wording has been amended to emphasise that fines should be proportionate to the seriousness of the offence and based on an assessment of culpability, harm and financial means, to constitute appropriate punishment.
  • Earlier consideration: The changes are now included in step 2 of the sentencing process (rather than in step 3 as previously), meaning that the starting point to consider the organisation turnover is now at an earlier stage and will therefore directly influence the initial fine calculation.

To mitigate the exposure to large fines and reputational risk, companies should consider early regulatory compliance and proactive risk management.

[1] R v Places for People Homes [2021] EWCA Crim 410