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England and Wales Court of Appeal (Criminal Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Tata Steel UK Ltd, R v [2017] EWCA Crim 704 (07 June 2017) URL: http://www.bailii.org/ew/cases/EWCA/Crim/2017/704.html Cite as: [2017] EWCA Crim 704 |
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ON APPEAL FROM THE CROWN COURT AT NORTHAMPTON
His Honour Judge Mayo
S20160075
Strand, London, WC2A 2LL |
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B e f o r e :
MRS JUSTICE JEFFORD DBE
and
HIS HONOUR JUDGE AUBREY QC
(SITTING AS A JUDGE OF THE CACD)
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REGINA |
Respondent |
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- and - |
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TATA STEEL UK LTD |
Appellant |
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(Transcript of the Handed Down Judgment.
Copies of this transcript are available from:
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7414 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Keith Morton QC and Dominic Adamson (instructed by Plexus Law) for the Appellant
Hearing date : 27 April, 2017
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Crown Copyright ©
Lord Justice Gross :
INTRODUCTION
THE FACTS
" Both incidents involved amputations of fingers and were entirely avoidable. They both involved operatives placing their hands into parts of machinery which were patently hazardous and likely to cause serious injury. For this reason, the parts had been guarded or fenced to prevent incursion by fingers."
THE GUIDELINE
" Very high
Deliberate breach of or flagrant disregard for the law
High
Offender fell far short of the appropriate stand; for example by:
- failing to put in place measures that are recognised standards in the industry
- …..
- failing to make appropriate changes following prior incident(s) exposing risks to health and safety
Medium
Offender fell short of the appropriate standard in a manner that falls between descriptions in 'high' and 'low' culpability categories….. "
" Normally, only information relating to the organisation before the court will be relevant, unless exceptionally it is demonstrated to the court that the resources of a linked organisation are available and can properly be taken into account."
" Very large organisation
Where an offending organisation's turnover or equivalent very greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence. "
A "large organisation" is referred to as one with a turnover or equivalent of £50 million and over. For large organisations, in respect of High culpability, Harm category 1 has a starting point of £2.4 million. Harm category 2 has a starting point of £1.1 million with a Category range of £550,000 - £2,900,000. Harm category 3 has a starting point of £540,000 with a Category range of £250,000 - £1.45 million.
" The court should finalise the appropriate level of fine in accordance with section 164 of the Criminal Justice Act 2003, which requires that the fine must reflect the seriousness of the offence and that the court must take into account the financial circumstances of the offender.
The level of fine should reflect the extent to which the offender fell below the required standard. The fine should meet, in a fair and proportionate way, the objectives of punishment, deterrence and removal of gain derived through the commission of the offence; it should not be cheaper to offend that to take the appropriate precautions.
The fine must be sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation."
" The profitability of an organisation will be relevant. If an organisation has a small profit margin relative to its turnover, downward adjustment may be needed……
Whether the fine will have the effect of putting the offender out of business will be relevant; in some bad cases this may be an acceptable consequence."
i) First, the Guideline begins by considering the level of culpability. It then looks at the seriousness of the harm risked, followed by the likelihood of that harm materialising. In combination, the seriousness of the harm risked together with the likelihood of it materialising, yield various harm categories.ii) Secondly, the level of culpability, considered together with the relevant harm category are then applied to tables, depending on and reflecting the size of the organisation's turnover. This exercise produces a starting point for the fine. It can be adjusted upwards or downwards for aggravating and mitigating factors.
iii) Thirdly and likewise, the starting point may warrant adjustment to reflect the true size of the organisation. In particular, an upwards adjustment may be called for in the case of a very large organisation so as to produce a proportionate fine, bringing home the message to management and shareholders of the need to comply with health and safety legislation. In this manner, the Guideline reflects the objective, clearly set out by Mitting J, giving the judgment of the Court in Thames Water (supra), at [38]:
" The object of the sentence is to bring home the appropriate message to the directors and shareholders of the company…. Sentences imposed hitherto in a large number of cases have not been adequate to achieve that object. "iv) Fourthly and in accordance with s.164 of the Criminal Justice Act 2003, the financial circumstances of the offender must be taken into account. A downwards adjustment may be called for where an organisation has a small profit margin relative to its turnover; by implication, a downwards adjustment may equally be appropriate where the business is loss-making. So too, any wider impact of the fine on those who are not shareholders or directors, should be considered and may warrant adjustment.
v) Fifthly and as with any other sentencing exercise, there is a discount for an early guilty plea and totality must be taken into account.
SENTENCING OBSERVATIONS
" practices had developed amongst the workforce to save time and effort and with plant and equipment where cutting or heavy lifting operations are involved, members of the workforce should be prevented by physical intervention from putting themselves in danger."
The Judge therefore moved up from his starting point of £2.4 million to £2.75 million.
THE RIVAL CASES
THE PRINCIPAL ISSUES
Offence 2:
i) Did the Judge err in categorising offence 2 as involving a high likelihood of harm? ("Issue I: High likelihood")ii) Was the Judge entitled to move outside the range? ("Issue II: Moving outside the range")
iii) Should the Judge have made a downwards adjustment, given the losses sustained by Tata in its business? How should the Judge have approached the support provided to Tata by its parent TSL? ("Issue III: A loss-making business and parent company support")
iv) What amount should Tata have been fined? ("Issue IV: Conclusions on Offence 2")
Offence 1:
v) Was the Judge's approach to offence 1 in error? ("Issue V: Offence 1")
OFFENCE 2
ISSUE I: HIGH LIKELIHOOD
ISSUE II: MOVING OUTSIDE THE RANGE
ISSUE III: A LOSS-MAKING BUSINESS AND PARENT COMPANY SUPPORT
" Going concern
After making enquiries, the directors have a reasonable expectation that the Company has adequate resources (including the support of its ultimate parent, Tata Steel Limited (TSL)) to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the financial statements. "
On that footing, it seems to us that this is one of those exceptional cases within Step Two, where the resources of TSL, as well as those of Tata, can properly be taken into account. Indeed, as the support of TSL is plainly of the first importance in ensuring that Tata could continue to prepare its accounts on a "going concern" basis, it would seem to me wrong not to take the position of TSL into account – the removal of TSL's resources would produce a misleading and unrealistic picture of Tata's financial circumstances. This is not a matter, as Mr Morton submitted, of "penalising" TSL for keeping Tata in business to the benefit of employees and the community at large. It is instead, quite simply, recognising the economic reality of the situation. Be all that as it may, on any view, the Judge was amply entitled to take TSL's resources into account when considering whether or not to make a downwards adjustment in the light of Tata's financial circumstances.
ISSUE IV: CONCLUSIONS ON OFFENCE 2
ISSUE V: OFFENCE 1
OVERALL OUTCOME
i) We allow the appeal on offence 2 and substitute a fine of £1.315 million;ii) We dismiss the appeal on offence 1, so that the fine imposed of £185,000 stands;
iii) The sentences remain consecutive but the total fine is therefore reduced from £1,985,000 to £1,500,000.