Death at work

On 5 July the Court of Appeal reduced the £10m fine imposed on Balfour Beatty (BB) over the Hatfield Train Crash to £7.5m for breaches of the Health and Safety at Work Act 1974 (R v Balfour Beatty Infrastructure Ltd [2006] EWCA 1586; The Times, 19 July 2006).

From Transco to Balfour Beatty

In an extensive judgment, given by the Lord Chief Justice, the court accepted one of the grounds advanced by BB and found that there had been a discrepancy between the fine imposed on BB and that imposed on Railtrack (a co-defendant) who had been fined £3.5m.

The court, citing Fawcett 5 Cr App R CS 158, which said on page 161 'would right thinking members of the public, with the knowledge of the relevant facts and circumstances hearing of the sentence consider that something had gone wrong with the administration of justice', went on to say 'the disparity in the two fines is so great in this case that we consider that the test is satisfied'. The court approved the guidelines of mitigating and aggravating factors set out in R v Howe & Co (Engineers) Ltd [1999] 2 Cr App R (S), which further reiterated the objects of a sentence, namely 'to achieve a safe environment for the public and to bring the message home, not only to those who manage a corporate defendant, but to those who own it as shareholders'. The Hatfield Court was able to reduce the fine within the Howe principles, which in turn limited the disproportion between the two fines.

Further, the court felt that the trial judge should not have been straitjacketed in sentencing Railtrack. They said:

'It was not satisfactory that the judge was put in a position of feeling constrained to impose sentences on the defendants that did not accurately reflect their relative culpability. It is unfortunate that the prosecution did not focus from the outset on the question of Railtrack's culpability in respect of the failure to implement a regular regime of grinding the rails and for the failure to ensure that the defective rail was replaced before it failed.'

In March 2006, the Court of Appeal had reduced the fine on Transco after they had pleaded guilty at the earliest opportunity for a breach of the Health and Safety at Work Act 1974, from £1m to £250,000 (R v Transco [2006] EWCA Crim 838).

No softening

So do these two appeals indicate a softening by the courts when sentencing major corporations for health and safety breaches? The short answer is no; in fact the levels of fines are spiralling upwards. After the Southall train crash GWT was fined £1.5m. In the aftermath of the Paddington train disaster, Thames Trains was fined £2m. These were hitherto the two highest fines on records in the UK for health and safety offences.

In August 2005, the Scottish High Court imposed a fine of £15m on a health and safety offence on Transco, following a seven-month trial involving a gas explosion that killed a family of four in a house near Larkhall in Scotland.

This was over seven times higher than any previous fine on an individual corporate defendant. In sentencing, the judge said:

'The level of fine requires to be such as will dent those operating undertakings on the scale existing here (and in particular their shareholders) that the courts do, and will continue to, regard breaches of s 3 [of the Health and Safety at Work Act 1974] as extremely serious where they involve exposures of the public to death or serious injury on a longstanding and extensive basis. On the other hand, the fine should not jeopardise any future required safety work, or effectively penalise the consumer.'

In an earlier case in 2005, in relation to breaches involving a public safety element, the English Court of Appeal said:

'We conclude that the court is established to take a more severe view of breaches of health and safety work provisions where there is a significant public safety element. This is particularly so in cases (like the railways) where public safety is entrusted to companies in the work that they do and where the general public simply has to trust in the competence and efficiency of such companies.'

Upwards trend

Therefore, despite the part reduction in the Transco and Hatfield cases, the general clear trend is a major upwards movement. One view from reading the Hatfield judgment is that, although fines of £15m are no doubt severe, in the context of the sentencing exercise, they are not excessive. The Corporate Manslaughter and Corporate Homicide Bill,whichwas introduced into Parliament on 21 July 2006 and is thought will become law in 2007 or 2008 after Jack Straw has made clear that it will be given Parliamentary time to become law, will probably lead to a greater number of prosecutions and will further act as a touch paper to higher fines to reflect public opprobrium for the more serous offences and to maintain a clear blue line between manslaughter and health and safety offences.

It is further inevitable, therefore, that fines for convictions of major corporations for corporate manslaughter will result in fines in excess of £20m upwards in the near future.

It is arguable that this trend does no more than mirror the much greater priority generally being given to corporate governance worldwide. For instance, just last week we saw Microsoft has been fined £194m by the European Commission for failing to comply with an anti-competition ruling.