Health and safety fine raised following Crown appeal

A recent appeal case in Scotland’s High Court, HM Advocate v. Munro & Sons (Highland) Ltd, has examined the factors to be taken into account when determining the appropriate sentence for health and safety offences. 

Munro & Sons (Highland) Ltd (‘Munro’), a haulage and disposal contractor, was involved in transporting a heavy wheeled loader on a low loaded trailer. The loader was secured by use of a parking brake and two securing chains. It later transpired that the parking brake had a serious defect and that the two securing chains were of insufficient strength. As the road began to incline, the chains broke, releasing the loader. The loader then rolled backwards and crushed the car behind, injuring one of its occupants and killing the other. On first instance, the sentencing judge fixed a starting point fine of £5,000, discounted by 25% to £3,750 to reflect the early plea of guilty. HM Advocate (the ‘Crown’) then appealed on the basis that the sentence was unduly lenient, and on 28 January 2009, the appeal court found in their favour. 

The initial sentence was held to be far too low, taking inadequate account of the nature of the offence and the need for appropriate punishment in the public interest. There was a clear – foreseeable – risk to public safety if the loader rolled off the trailer, so by allowing there to be a defective handbrake and inadequate securing chains, Munro had failed to comply with its statutory duties to members of the public under the Health & Safety at Work etc. Act 1974. The appeal court found that an appropriate starting point would actually have been £40,000, discounted by 25%, and a fine of £30,000 was substituted. 

The facts

In June 2006, Munro purchased a ‘Michigan wheeled loader’ – a very heavy, wheeled loading vehicle. A lorry driver was instructed to transport the Michigan from Munro’s base to a quarry using a low loaded trailer. The Michigan was raised onto the trailer and secured in place with two securing chains. On the way to the quarry, two ladies were travelling behind the trailer on their way home from work. The road to the quarry began to incline, and as it did so, the Michigan rolled backwards. This imposed a load on the chains in excess of their combined breaking strain. Both chains broke, and the Michigan rolled backwards, crushing the ladies’ car almost flat. One lady was killed outright and the other, remarkably, survived with injuries. 

It became apparent after the incident that there was a serious defect in the parking brake of the Michigan, which meant that the Michigan’s wheels were free to turn. Munro were not, however, aware of this, and the main failure on the part of Munro was actually found to be in relation to the chains, which fell far short of the guidance provided for in the Department of Transport’s Code of Practice for Safety of Loads on Vehicles. 

The appropriate level of fine

The Scottish courts have had few occasions where they have been required to consider the appropriate level of fine for a contravention of the statutory provisions following a death. As a result, no Scottish case has led to a reported judgment in which the relevant considerations have been discussed, until now. 

The appeal court in their judgment made considerable reference to the English authorities, in particular R v. Balfour Beatty Rail Infrastructure Ltd, which set out a number of principles derived from earlier English judgments. In Balfour Beatty, it was noted that failures to fulfil the general duties imposed by sections such as section 3 of the 1974 Act will be particularly serious, as such sections are the “foundations for protecting the health and safety of the public”. The judges also stated that it may be helpful to look at how far the defendant fell of the appropriate standard, and that generally, where death occurs in consequence of the breach, that will be an aggravating feature. Also relevant will be the degree of risk and the extent of the danger, specifically whether it is an isolated failure or one over a continued period. The defendant’s resources and the effect of a fine on its business will be important, and any fine should reflect the means of the offender. Above all though, the objective of the fine imposed should be to achieve a safe environment for the public and bring that message home. Mitigation will include (1) a prompt admission of responsibility and a timely plea of guilty; (2) steps taken to remedy deficiencies drawn to a defendant’s attention; and (3) a good safety record. The appeal court also drew on the comments in Balfour Beatty that the fine must serve as a deterrent – it must reflect both the degree of fault and the consequences, so as to raise appropriate concern on the part of shareholders as to what has occurred. The appeal court found these passages to be highly persuasive and followed them in the appeal. 

The appeal court also considered the Consultation Paper on Sentencing for Corporate Manslaughter issued by the Sentencing Advisory Panel for the Sentencing Guidelines Council in November 2007. The paper was published in anticipation of the coming into force of the Corporate Manslaughter and Corporate Homicide Act 2007 on 6 April 2008. The panel’s provisional starting point for a first offence of corporate manslaughter was suggested as a fine amounting to 5% of the offender’s average annual turnover during the three years prior to sentencing. After taking into account any aggravating or mitigating factors, the court would then arrive at a fine within the range of 2.5 to 10% of average annual turnover. The Guidelines are intended to apply only in England and Wales, but it is clear from this and other recent judgments that although they are not even in their draft form, the Scottish courts are already taking turnover into consideration in sentencing.

The financial position of Munro

The appeal judges were of the opinion that the information provided relating to Munro’s financial position was generally insufficient. All that was placed before the sentencing judge was the directors’ report and the financial statements for the years ended 30 September 2005 and 30 September 2006. The sentencing judge had paid particular heed to the year ended 2006, which showed that Munro had made an operating loss of £14,281, but after various adjustments, particularly in respect of tax, the net profit for that year was £18,854 (in the previous year the net profit had been £157,984).

The sentencing judge’s approach

In his report to the court, the sentencing judge stated that, in considering the appropriate level of fine, his principle consideration was the ability of the company to meet a financial penalty. He had proceeded purely on the basis of the net profit for the year ended 30 September 2006, which “showed a company which made an operating loss, only turned into profit by virtue of tax adjustments”. Although the company had a net worth of around £347,000, he said “in candour I did not take that into account in considering sentence”.

Decision

It was the view of the appeal court that the sentencing judge erred in his approach towards determining the appropriate fine, and that he should have taken into account not only Munro’s ability to pay, but also the gravity of the offence and other aggravating or mitigating factors, as set out in Balfour Beatty. The court emphasised the clear statutory duty of Munro to protect the health and safety of the public, and stated that it was “entirely foreseeable” that if the Michigan rolled off the low loaded trailer, members of the public using the road would be exposed to grave risk of death or serious injury. 

The court stated that it had not been easy to form a complete picture of Munro’s financial position, but accepted that although Munro’s turnover was substantial, they were not a particularly profitable company. In light of the English authorities and other considerations, the judges came to the view that the sentence imposed by the judge was far too low, and took inadequate account of the nature of the offence itself and the need for appropriate punishment in the public interest. The fine was therefore upwardly revised to a starting point of £40,000 – reduced to £30,000 to reflect the plea of guilty and its timing. 

This is the first Scottish case to set out succinctly the factors to be considered by the court in determining sentence for health and safety breaches.