R (HSE) v Whirlpool UK Appliances Ltd

In the spring of 2017, I wrote a piece dealing with a case in which I conducted the Prosecution, that was heard at Bristol Crown Court – R (HSE) v Whirlpool UK Appliances Limited, in which the defendant company had been sentenced to a fine of £700,000 after a fatal accident at its factory in Yate. I highlighted the issues arising in respect of the sentencing of very large organisations and the lack of assistance to be taken from the Health and Safety Offences Sentencing Guideline.

As anticipated the sentence was appealed. It was heard before the Lord Chief Justice and on 20 December 2017 the judgment was handed down (R v Whirlpool UK Appliances Ltd) [2017] EWCA CRIM 2186). The sentence was reduced to a fine of £300,000 and whilst that particular result was chiefly as a result of the Sentencing Judge’s assessment of culpability (low) and the likelihood of harm (low), interesting aspects of the judgment are to be found:

  1. On the issue of the effect of a fatality on the identification of and placement within a harm category;

  2. The application of the Guideline in respect of very large organisations; and

  3. The relevance of profitability.

At paragraphs 30 and 31 of the judgment, the Court considers step one (part two) of the Sentencing Guideline and, in particular, the consequence of the significant harm caused being one of death. The Court reiterated that the Guideline recognises that significant cause of harm justifies a substantial move away from the starting point to the top of the category range or beyond. The Court concluded that, given the need for a substantial increase in sentence in such cases, the fact of death would actually justify a move to the top of the next category range. Accordingly, using the large company tabulation, the Court indicated the starting point in a low culpability, harm category three case would be £250,000 (this being the top of the range for harm category 2).

The Court then considered the calculation of fines for organisations that justified the description “Very Large”. The Court noted that there is something of an arithmetic approach within the Guideline as it seeks to demark the categories from “Small” through to “Large”; namely that there is a five-fold difference between the upper and lower limits of turnover within the “Small” and “Medium” categories. Indeed, this fact has been used by practitioners to extrapolate arguments on where the starting point for very large organisations might be found. In this case, however, the Court explained that the guideline did not provide an upper limit for large organisations when it could have done, preferring to simply state that the turnover of a very large organisation would be one that “very greatly exceeds” the threshold for large organisations. The Court noted its own observations in R v Thames Water Utilities Ltd [2015] EWCA CRIM 960, that there should be no mechanistic extrapolation for levels for large companies. The Court emphasised that even when an organisation’s turnover very greatly exceeded £50 million, a sentencing court was not obliged to move outside the range; simply that it “may” do so. Thus the Court did not wish to create an artificial boundary or encourage an arithmetic approach, indeed earlier in the judgment the Court referred back to the words of Mitting J in Thames Water in which he stated “in the case of most organisations, it would be obvious that it either is or isn’t very large. Doubtful cases must be resolved as and when they arise”. In this instant case, turnover of £700 million was regarded as clearly placing the origination in the very large category. Therefore, having already indicated a starting point of £250,000 within the large organisation table, the Court considered how to raise that to reflect a very large turnover figure. For some assistance the Court looked at the next harm category up with a range of £180,000 – 700,000. This was the approach also taken in R v Tata Steel UK Ltd [2017] EWCA CRIM 704. Having done so the Court took the starting point in the instant case to £500,000.

Having then reduced this to £450,000 to take account of mitigating factors, the Court considered step three of the Guideline and the impact of the organisation’s profitability. The Court stated that “an organisation with a consistent history of losses is likely to be treated differently from one with consistent profitability (paragraph 38)”. The Court also noted that fines could properly increase for highly profitable companies. In the instant case, recent losses were due to exceptional items and the Court saw no reason to reduce the fine in these circumstances.

Credit for an early guilty plea therefore took the Court to a final figure of £300,000. The Court remarked that this was unusual due to the finding of the low culpability and low likelihood of harm, using this to illustrate how the Guideline could properly be used to provide appropriate fines reflecting the individual circumstances of each case.

So it is that the boundary between “Large” and “Very Large” organisations remains undefined and practitioners are discouraged from taking an arithmetic approach in their submissions. Accordingly, there remains great scope for efforts to be made in mitigation not least upon the impact of harm caused, the application of the “very large” label and how to reflect this in an appropriate uplift in sentence. The impact of death on the movement of a case to the top of the next harm category may well cause concern for those cases where culpability and likelihood of harm are higher than they were in the instant case, as the effect on the potential fine is more than considerable!

Since this judgment was handed down, “flexibility” in the application of the Guideline appears to have been the watchword.

R (HSE) v Martin Baker Aircraft Ltd [2018] Lexis Citation 13 Lincoln Crown Court (Sentence 23/2/18)

A case involving the death of a Red Arrows pilot when his ejection seat parachute failed to deploy. In sentencing, referring to Whirlpool, Carr J stated, “no two health and safety cases are the same and there is inherent flexibility in the Guideline”. He carried on, stating that it allows for subtle recognition of culpability, likelihood of harm, harming itself and turnover. In this case there was a close relationship between the Defendant company and its holding company, which led Carr J to consider the financial position of both when deciding upon the “economic realities” as envisaged in Whirlpool.

R (HSE) v University College London [2018] EWCA Crim 835 (6 March 2018)

A postgraduate student was injured when a piece of equipment exploded, causing her life changing injuries. This was medium level culpability, level B harm (medium likelihood) case and so, harm category three. The Sentencing Judge imposed a fine of £300,000.

The accident took place in a separate department, but which was partly owned by UCL. The sentencing judge had chosen to stay within the “larger organisation” categorisation as an acknowledgement of UCL’s charitable status. The Court Of Appeal Criminal Division observed that this perhaps ought to have been considered later in the process. Indeed, it was acknowledged that in Whirlpool it was at step three where the court can adjust sentence to reflect “economic realities”. The Court also repeated the call to avoid a strictly arithmetical approach and focusing on doing justice in the circumstances of the individual case. Given the reduced categorisation of the case at step two, the Court Of Appeal declined to apply a further reduction due to lower turnover of the subsidiary department. Appeal dismissed.

R (HSE) v ATE Truck and Trailer Sales Ltd [2018] EWCA Crim 752 (13 April 2018)

A fatal accident case in which the appeal turned on a review of the culpability and harm categorisation, however, the Court Of Appeal Criminal Division emphasised (at para 26) two of the aspects from Whirlpool referred to above; “the court should not lose sight of the fact that it is engaged in an exercise of judgement appropriately structured by the Guideline but…not straitjacketed by it”. The CACD also re-emphasised the fact that in cases where there had been a death, this would substantially increase the sentence.

Accordingly, in rejecting the straitjacket and embracing flexibility, the implementation of the Guideline does leave considerable room for the advocate. Arguably this comes at a price – namely, that of the predictability of the final result. Given that the final cost can now be so much higher, it remains to be seen whether the net result appears in more trials and fewer guilty pleas.

Alan Fuller

 

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