Newsletters Criminal Regulatory 23rd Mar 2018

Impact of a death on fines for Health and Safety Offences [Whirlpool UK Appliances Ltd v R (Upon the prosecution of Her Majesty’s Inspectors of Health and Safety) [2017] EWCA Crim 2186]

[Whirlpool UK Appliances Ltd v R (Upon the prosecution of Her Majesty’s Inspectors of Health and Safety) [2017] EWCA Crim 2186]

The Court of Appeal has ruled in a judgment delivered by the new Lord Chief Justice that where death results from a breach of ss2 and 3 of HSWA 1974 the sentencing court should move from what would otherwise be the starting point in the appropriate harm category to the top of the range of the next harm category. In many cases this will result in a potential increase in the fine of hundreds of thousands or even millions of pounds.

Whirlpool was a company with an excellent health and safety culture and no previous convictions for safety failings. It employed Clive Dalley, a very experienced, self-employed fire alarm and telecoms contractor, to work on the fire systems at its Yate factory. He was working on a raised platform, close to an overhead conveyor system.

A maintenance team was also in the factory, working on the conveyor. Mr Dalley was required to tell them when he was working so that they would not turn it on. At one point he told them he was going for a coffee before starting work. He forgot to tell them he had returned, and they started the conveyor. Part of it knocked over the platform, killing Mr Dalley.

The Company pleaded guilty and was fined £700,000 with full credit. They appealed against the fine on the grounds that the judge had set the starting point (£1.2m) too high in the context of the Definitive Guideline, and that he had taken too little account of the Company’s inconsistent profitability.

The Court of Appeal redid the fine calculation from scratch.

It was agreed that the case fell into harm category 3 because it was a Level A risk (of death), but there was a low likelihood of harm and the risk was only to Mr Dalley (Step One).

Step Two would normally be to consider the Company’s turnover. The Court started by considering what the fine would have been if the turnover had been £50 million – the start of the “Large” company category. Culpability was low – there had been a lot of attention paid to the risks of this job, although not in the detail required. Following the table, that produced a starting point of £35,000 and a range of £10,000-£140,000.

The effect of the death was then applied. Noting that a consistent theme of recent sentencing policy was substantially to increase the sentence to reflect a fatality, the Court stated that the fact of death would not only justify moving up a harm category but going to the top of the next range. That increased the starting point by £215,000 to £250,000.

Applying this principle, the effect is magnified at higher culpability or harm levels. The same exercise would move the starting point for a low culpability, harm category 2 offence from £100,000 to £700,000, or a medium culpability, harm category 3 from £300,000 to £1.5 million. While the multiple involved stays relatively steady (mostly around a five or six-fold increase) the absolute difference climbs rapidly. When you get to a very high culpability, harm category 2 offence, moving the starting point to the top of the range for harm category 1 adds an extra £8 million pounds to the fine.

Having reached the £250,000 starting point the Court then considered the effect of the Company’s turnover which, at £700 million, was 14 times the bottom of the “Large” company starting figure. Whirlpool clearly qualified as a “very large organisation” for the purposes of the Guideline. In this case it was decided to move the company up one more harm category which took it into the range for a low culpability, harm category 1 offence with a range of £180,000 to £700,000.  The Court was clear, however, that this was not a linear arithmetic exercise and, having considered a range of factors, £500,000 was adopted as the starting point. Finally, a £50,000 discount was applied for strong mitigation and, once credit for plea was factored in, the original £700,000 fine was quashed and replaced with a fine of £300,000.

For Whirlpool, the calculation ranged over figures in the tens or hundreds of thousands of pounds. That reflected the fact that their failing amounted to no more than lacking a system which could cope with normal human frailty, a fateful moment of forgetting. However, as illustrated above, in a case where culpability or harm assessments are less sympathetic, the difference a death makes to the fine could be measured in millions.

Ben Rich

Ben is developing his practice in health and safety. In 2016-2017 Ben spent over a year instructed in a complex health and safety case involving two sets of charges for separate incidents. After obtaining a number of expert reports on fire and gas safety and making sustained representations one case was dropped entirely. The second was the subject of a guilty plea on a detailed basis after which the company, with a turnover of nearly £200 million, was fined in the tens of thousands.

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