Clifton Steel Ltd, R. v [2007] EWCA Crim 1537

Case No 2007/0111/A2[2007] EWCA Crim 1537
IN THE COURT OF APPEAL
CRIMINAL DIVISION
Venue Royal Courts of JusticeDate Wednesday, 13 June 2007
Strand
London, WC2
B E F O R E:
LORD JUSTICE TOULSON
MR JUSTICE WALKER
HIS HONOUR JUDGE WADSWORTH QC
(Sitting as a Judge of the CACD)
Between
R E G I N ACrown-v-
Between
CLIFTON STEEL LTD
Computer Aided Transcript of the Stenograph Notes ofSmith Bernal Wordwave Limited190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR R KIMBLIN appeared for APPELLANTMR B THOROGOOD appeared for CROWN
J U D G M E N T
[1]MR JUSTICE WALKER: The appellant is a company which carries on the trade of steel stockholders and processors. At their premises in Birmingham coils are stored lying on their sides. On 17th January 2002, as a steel coil was being lowered to the ground using an overhead crane, a tragic accident occurred and Mr Ian Milligan received injuries which led to his death.[2]Mr Milligan was engaged in moving coil No 3371. He had his back to the lengthways sides of a number of coils stacked three high. The coil closest to him on the top row was numbered 3456. It was one of the heaviest coils in the stack weighing a little over 11 metric tons. It rested on two smaller coils. The first, No 3424, weighed a little over 8.5 metric tons. This was the coil in the second row of the stack nearest to Mr Milligan. The second, No 2438, weighed only 6.2 metric tons. Coil No 3424 in turn rested on two coils on the bottom row of the stack. The first, No 3354, weighed 9.8 tons, which was more than the coil resting on it. The second, coil No 3374, weighed a little over 8.4 metric tons and was thus a little smaller than coil 4324.[3]The stack collapsed in such a way that coil 3456 dropped and coil 3354 was pushed out, sliding over the floor on its plastic cradle. It crushed Mr Milligan against the coil that he was manoeuvring. He was largely unconscious from the moment of impact until he died, having suffered an immediate fall in blood pressure caused by the massive crush injury. An investigation by the Health and Safety Executive led to criminal proceedings.[4]On 3rd February 2006 at Birmingham Magistrates Court the appellant pleaded guilty to breach of section 2(1) and 33 of the Health and Safety at Work Act 1974. The appellant was committed to the Crown Court for sentence. On 8th May 2006, at a sentencing hearing before His Honour Judge Ross, the appellant was fined £150,000 and ordered to pay £20,000 prosecution costs. Leave to appeal was granted by the single judge who also granted the necessary extension of time of 95 days.[5]Following pronouncement of sentence the appellant asked that it have time to pay. The sentencing judge granted an adjournment for consideration of that question. The matter came back before the judge on 26th May 2006. He determined that £60,000 should be paid in a lump sum within 12 months and that the balance of the fine and costs amounting to £110,000 should be paid at the rate of £5,500 per quarter, the first payment to be made on 13th June 2006.[6]This was not the first occasion on which the appellant had been found in breach of health and safety legislation. On 7th April 1995 an employee suffered serious injuries when trapped between an overhead travelling crane and the wall of the premises. This led to a fine of £7,500.[7]When sentencing, the judge stressed, as do we, that Mr Milligan was a diligent and careful employee. He was a shift supervisor and he was diligent in the responsibilities entailed in this post. In relation to the storage of steel he was very much alert to the dangers it represented and was careful to follow procedures laid down by the appellant. He cannot in any way be blamed for this tragic accident. Mr Milligan's family has behaved with great dignity throughout the proceedings in the magistrates court, the coroner's court and the crown court at a time when they have suffered a terrible loss.[8]The judge acknowledged that the appellant had cooperated with the Health and Safety Executive, that there was real remorse, that the plea of guilty had been entered at the earliest opportunity and that actions since the accident had been taken in order to improve health and safety. He accepted that there was neither a deliberate nor a reckless disregard to health and safety within the company, nor was there the cutting of corners in order to save or make money. However, there was a terrible blind spot relating to one of the most dangerous aspects of the operation on the premises.[9]The judge commented first in this regard on the operating procedures manual in relation to stacks of steel coils. It dealt with the creation of stacks and their continued storage. It did not deal with dismantling of the stacks. The judge commented that the danger of stacking larger and heavier coils above smaller and lighter coils was obvious. The effect when a coil was removed was not addressed in the manual. He accepted, however, that the company had an understandable belief that plastic cradles provided a more durable method of storage and a safer one. He accepted also that the company was seeking to replace wooden chocks which had previously been used with plastic cradles for this reason.[10]The next area dealt with by the judge concerned dangers arising out of the location of the employee at a time when the coils were moved. The nature of the crane operation in this case made it almost inevitable that Mr Milligan would be directly in the path of an unrestrained coil from the bottom of the stack if it chose to move. The judge suspected that the appellant had not appreciated just how little disturbance was likely to be required for the stack to move if it were not chained or restrained with posts. In fact the merest vibration would have been sufficient to cause the stack to move.[11]Overall, the judge concluded that the failure to restrain the stack and the placing of an employee in the position that Mr Milligan was placed in amounted to serious breaches of the legislation. Taking into account what he knew of the appellant's financial position, he concluded that a fine of £150,000 and an order for the payment of £20,000 costs were appropriate.[12]When ruling on time to pay, the judge on 26th May 2006 said that he would make an order in such a way as would allow the appellant to continue to trade. There were employees and he considered it wrong to impose repayment terms in a way which would force the company out of business. The company owned a property which was rented for investment purposes. It was not part of the company pension scheme and had a net value of £60,000. For that reason the judge directed that £60,000 be paid within 12 months. The judge when ordering a sum of £5,500 to be paid per quarter was in fact ordering a sum which was consistent with what had been indicated by the appellant at the earlier sentencing hearing. On that occasion the appellant had indicated that it could afford to pay £2,000 per month.[13]We have had the benefit of a written skeleton argument from Mr Kimblin who appears today for the appellant as he did below. Mr Thorogood appeared below for the Health and Safety Executive. He has provided us with written submissions and he has attended today to assist the court. We are grateful to them both.[14]The appellant's first point is the level of culpability. It is submitted that the penalty does not reflect the low level of criminal culpability but gives undue weight to the element of harm. The guideline from the Sentencing Guidelines Council on seriousness identifies negligence as the lowest level of culpability when compared with deliberate or reckless behaviour or behaviour which is motivated by gain. It is said that there is an imbalance between culpability and harm. Mr Kimblin draws attention to the fact that the company has a culture of working safely, the fact that the company had in place written procedures which were monitored and updated, the fact that the company had undertaken and recorded a risk assessment. He notes that there was no authoritative guidance on steel stocking so this was not a case in which the appellants could be said to have ignored an approved code of practice.[15]It is submitted in the round that the picture one has from the material before the sentencing judge was an appreciation of the hazards, was of senior employees being diligent in the use of safety measures and was of a company which was enthusiastic about safety and its improvement.[16]As against that, however, there was on the material before the judge no actual risk assessment of the hazards involved in relation to the removal of coils from the stack and in particular their removal from a stack where the plastic cradles were being used. They were an innovation. Before they were used they called for a risk assessment. After they were used in the absence of a risk assessment there were obvious matters giving rise to concern. The judge pointed out that the dangers were that the coils were potentially mobile and were extremely heavy, resting on coils which were lighter as was obvious. The material before the judge contained observations on the part of the Health and Safety Executive as to a number of aspects concerning the stacking, the coils not touching each other at the bottom tier and the absence of any settled system for stability during deconstruction of a stack. Mr Kimblin commented that while the operations manual did not deal with how to remove a coil from the stack, that was a small subset of the general procedures. That, as it seems to us, does not answer the judge's first point. Equally, it does not answer the judge's second point of the danger that arose from the location of the employee. It was submitted by Mr Kimblin that as a matter of history the operations manual had been produced in evidence by the defendant only in response to an invitation from the prosecution in the magistrates court and that it was only at the crown court that more was made of the procedure. That may be, but it does not seem to us that it answers the criticisms made by the judge in his sentencing remarks. Indeed, in fairness to Mr Kimblin he accepts that the procedure was open to criticism.[17]The second point relied upon by the appellant concerned previous visits of Inspectors employed by the Health and Safety Executive. It was said that their reports bore out points made earlier that the company was concerned and enthusiastic about health and safety, was cooperative and prepared to listen and learn. It was added, however, that the reports also suggested that the systems in place were adequate and suitable. In that regard we have before us an addendum lodged on behalf of the Health and Safety Executive commenting that the Inspector had not been present to conduct a complete analysis of the arrangements made by the appellant and did not do so. For example, he was not shown deconstruction procedures. As it seems to us, the points made in this addendum are points which were fully before the judge at the time of the sentencing hearing. It was perfectly open to the judge to give little weight to this aspect of the mitigation and it was not a matter which required to be dealt with in express reasons by the judge when making his sentencing remarks.[18]The appellant's third and fourth points concern the scale of the penalty and the means of the appellant. The judge's starting point must have been in excess of £200,000. Mr Kimblin acknowledges the absence of a tariff for offences of this kind but said that nevertheless this penalty must have been out of scale. In his skeleton argument he relied on the fact that only a very small proportion of penalties exceed £100,000. In that regard Mr Thorogood has given us the detailed position, that is that from 1st April 2000 to 31st March 2005 there were 595 cases involving fatalities. In 20 of those cases fines had been £150,000 or more. He informed us that the appellant's fine is in the top 3.6 per cent. It was acknowledged by Mr Kimblin that percentages may not be a particularly appropriate way of going about the matter in principle. However, he submitted that it may assist the court to know that the judge was effectively putting the appellant into the top 3.6 per cent of offenders in relation to this type of offence.[19]As to means, the appellant's submission is that it is manifestly inappropriate to have imposed a fine of this kind when one finds that detailed examination of the company's financial position on 26th May led to the conclusion that considerable time was required to pay and that the company should be required to sell its only saleable asset. The appellant asks the court further to take account of the fact that it is a small to medium sized family business.[20]The latest accounts which have now been provided to us but which were not before the sentencing judge show a profit before taxation of £183,000 in 2006. From that, however, there has to be paid an amount of £144,000 required by the Revenue to be repaid towards a loan from the pension fund, thus leaving some £39,000 balance remaining. The material before the judge showed in the latest accounts (which were at that stage those for 2005) a profit of £112,000. In previous years there had been a substantial loss. Mr Kimblin explained that when giving a figure of £2,000 a month at the initial hearing before the judge he had only been able to proceed on a very broad brush approach.[21]We have had the benefit of a helpful note from Mr Kimblin summarising the approach of the authorities in relation to penalty. Of particular help is what was said by this court in R v Yorkshire Water [2002] Environmental Law Reports 18, [2001] EWCA Crim. 2635. This court there said that:
"A balance may have to be struck between a fitting expression of censure, designed not only to punish but to stimulate improved performance on the one hand, and the counter productive effect of imposing too great a financial penalty on an already underfunded organisation on the other ... Finally it must be correct to determine what the penalty for any one incident should be rather than tot up the various manifestations of that incident as reflected in the counts in the indictment."
[22]In our view there is considerable force in Mr Kimblin's submissions on his third and fourth points. We do not accept that one gains any great advantage from a consideration of averages. However, applying the guidance in the Yorkshire Water case, it does seem to us that the figure of £150,000 when combined with the order as to costs for payment of £20,000 was manifestly excessive. Doing the best that we can, applying the Yorkshire Water principles, we conclude that the appropriate level of fine would have been a fine of £100,000.[23]Accordingly, we shall allow this appeal to the extent that the fine of £150,000 will be quashed and a fine of £100,000 will be substituted in its place. The order that £20,000 be paid towards the costs of the prosecution will remain. (A discussion took place as to the identity of the Inspector)[24]MR KIMBLIN: My Lord, I have an application. That application is for a defendant's costs order in respect of the costs of the appeal.

LORD JUSTICE TOULSON: We had anticipated that. Our provisional view was that in all the circumstances we should make no order as to costs in this case. If you want to advance further reasons please do so.

[26]MR KIMBLIN: My Lord, it is a simple short point I will make in addition. The best point perhaps is against me that the costs of the appeal are funded by the insurers not the company, I make that plain, but the costs were funded on a discretionary basis, the insurers were not obliged to fund the appeal and in my submission there is some merit in the approach that those costs should follow the normal rule where there is a successful appeal costs should be paid from central funds. Absent the support from the insurers the appeal would not have been brought. My Lord those are my only observations.

LORD JUSTICE TOULSON: Yes, thank you very much indeed. (Pause) we have considered the point but in all the circumstances of the case we do not think that it is appropriate to make an order for costs.

[28]MR THOROGOOD: My Lord, does the judgment leave the periodic payment undisturbed?

LORD JUSTICE TOULSON: We are prepared to hear any request in that regard. We certainly do not think that there should be a reduction in the quarterly payments, but if you have any other application we will hear it.

[30]MR KIMBLIN: My Lord, I have no further application to make in that regard and I bear in mind that the Crown Court --

MR JUSTICE WALKER: You need an extension of time, do you not? You are behind on the £60,000.

[32]MR KIMBLIN: The factual basis is correct in that the order to pay the £60,000 was due within the 12 month period, leave to appeal having been granted at the same time.

LORD JUSTICE TOULSON: You helped yourself to a stay. What is the position now?

[34]MR KIMBLIN: My Lord, the approach that I would invite the court to take is to leave the matter to the ordinary way in which fines are recovered via the fines office at the Crown Court.

LORD JUSTICE TOULSON: So far as that payment is concerned therefore you do not seek any relief from this court, you leave the matter to be enforced in the usual way?

[36]MR KIMBLIN: My Lord yes.

LORD JUSTICE TOULSON: So far as therefore as you are concerned you are content therefore that the appeal be allowed and the sentence varied simply by the substitution of the lower figure my Lord has mentioned for that imposed by the judge, but otherwise there be no change as to the order made by the judge?

[38]MR KIMBLIN: That is my instinct.

LORD JUSTICE TOULSON: So be it.

[40]MR KIMBLIN: I am grateful.[41]MR THOROGOOD: My Lord, I just wonder whether it is really -- I hate to sound discordant -- a recipe for disaster if £60,000 is to be paid by the end of this month and that order is not met.

LORD JUSTICE TOULSON: Then you go and seek to enforce in the usual way.

[43]MR THOROGOOD: With the magistrates court?

LORD JUSTICE TOULSON: Certainly.

[45]MR THOROGOOD: That may cause some difficulties for these defendants.

LORD JUSTICE TOULSON: Well they have had their opportunity to make representations about it and they have not and the matter will take its course.

[47]MR THOROGOOD: So be it.

JUDGE WADSWORTH: Those representations can be repeated in the magistrates court, can they not?

[49]MR THOROGOOD: They can.

JUDGE WADSWORTH:

[50]It is not an order to sell the property. It is an order to pay £60,000 and the magistrates will deal with that as they see fit.[51]MR THOROGOOD: My Lord is right.

Cited in 2 later judgments