Mick George Ltd [2019] EWCA Crim 519

Regina v Mick George Ltd [2019] EWCA Crim 519 concerned an appeal by a construction company against a fine of £566,670 imposed for a breach of health and safety regulations in relation to overhead power cables at a construction site.

On 9 February 2018 the appellant company pleaded guilty at the first opportunity in the Northamptonshire Magistrates’ Court to contravening regulation 25(3) of the Construction, Design and Management Regulations 2015. The company had failed to provide suspended protections where vehicles needed to pass beneath overhead electric power cables or to provide equivalent safety measures, contrary to section 33(1)C of the Health and Safety at Work Act 1974. The matter was committed for sentence to the Crown Court at Northampton where His Honour Judge Mayo imposed the fine on 25 May 2018 together with a costs order of £9,000.

The company was a substantial construction and waste management business with an annual turnover of £131 million in the 2017 financial year, having grown from £54 million in 2014. Operating profits ranged from £3.8 million to £8.7 million during that period and net assets stood at £32 million as at the end of May 2017. The company had no previous convictions but had received an Improvement Notice in October 2012 at a landfill site concerning unsatisfactory safety arrangements in relation to overhead power cables.

In early 2016 the company was developing a waste transfer station at Great Billing in Northamptonshire. The work required earth to be brought to the site in tipper trucks and tipped there to raise the ground level by about a metre. Overhead high voltage power cables were present a short distance after the entrance to the site. The company’s tipper lorry drivers had received training and detailed written guidance concerning high voltage power cables, including instructions not to drive with the tipper raised except for a short distance to dislodge material, to look out for overhead cables and bunting, and not to load or unload under cables. Regulation 25 of the 2015 Regulations required that where there was a risk from overhead power cables, traffic had to be directed away from the area of risk or, if not practicable, suitable warning notices had to be provided together with suspended protections known as goal posts where vehicles needed to pass beneath the cables.

On 24 February 2016, before tipping operations began, an experienced manager attended the site and requested that goal posts be erected. When tipper lorries began tipping on 3 March 2016 at the far end of the site about 200 metres from the cables, no goal posts had been set up. On 8 March 2016 an employee attended to erect two sets of goal posts, one on each side of the cables, but only installed one set and some warning signs. He reported that he had not installed the second set and apparently intended to do so on a subsequent visit.

On 9 March 2016 heavy rain made the site very wet and a decision was taken to move the tipping operation to a location near the entrance, close to the side of the cables where no goal posts had been erected. The plan was for lorries to reverse under the cables and tip once sufficiently beyond them. One driver, Mr Robert Earley, who had been trained to look for hazards and had previously visited the site and seen the one set of goal posts, reversed under the cables to a point just over two lorry lengths past them and attempted to tip. When not all the earth came out he drove forwards with the tipper container still fully raised in an attempt to dislodge the remaining earth. The raised container struck or came very close to striking the overhead cables. CCTV footage showed electrical arcing at that point. Mr Earley got out to inspect his lorry and then got back in to reverse, immediately upon which there was more arcing and flames from the tyres. Mr Earley was fortunate not to have been seriously injured or killed. The incident was reported to the company’s health and safety manager later that day. The following day it was reported to the Health and Safety Executive and a second set of goal posts was installed. The company also put in place more systematic measures to address the risk.

The prosecution submitted in the Crown Court that the case was serious because the risk had existed since 3 March 2016, the company knew perfectly well that warning barriers and goal posts should have been erected, and this was not the first time the company had been pulled up for inadequate protection against the risk of striking overhead cables. The prosecution contended that the approach to assessing the risk was too relaxed and that the failure to erect the second set of goal posts was a significant underlying and causative factor. Applying the relevant Definitive Guideline, the prosecution submitted that culpability was high because there was a period of risk rather than a single lapse on a single day. The company had failed to follow industry practice despite having received a warning before and the actions taken had not been enough to prevent a repetition. The prosecution argued that the harm risked was death, falling into seriousness level A, and that the likelihood of harm eventuating was at least medium and arguably high. The prosecution further noted that the greater the number of people exposed to the risk, the greater the risk of harm. The company contended that culpability was low and that the likelihood of harm eventuating was low because the incident had arisen from a series of coincidental factors, particularly the driver driving forward further than anticipated with the tipper up.

The judge concluded that culpability was towards the bottom end of medium. The company had been aware of all the safety measures that had to be in place and had continued to allow tipping operations when they were not fully in place. The company had not fallen far short of the appropriate standard, so culpability was not high, but nor did the descriptions of low culpability apply. The judge agreed that the seriousness of the harm risked was level A but, against the background that the company was responsible for 422,000 tipping operations a year, did not accept that the likelihood of harm eventuating was low. Once the regulations had been breached the likelihood was medium, so overall harm fell into category 2. The judge did not apply any uplift to reflect the number of people exposed to avoid double counting. As the company’s current annual turnover was in excess of £50 million it was a large organisation within the terms of the Guideline and the combination of medium culpability and harm category 2 yielded a starting point of £600,000 with a range from £300,000 to £1.5 million. There were no aggravating factors, including no actual harm. In mitigation the company had a good safety record. The judge then reassessed the starting point, though it was not clear on what basis, and concluded it should go up to £850,000. The judge stated he was required to set a notional fine after trial which would have a real economic impact on the company and bring home to its management and shareholders the need to comply with health and safety legislation. Whilst the defence suggested the company was at the bottom of the large organisation range and was not cash rich having recently made substantial investments, the judge opined that the company was a very healthy and well run business and concluded that the notional fine after trial should be the same as the starting point, namely £850,000. From that he deducted one third for the early guilty plea, resulting in the fine imposed.

The grounds of appeal were first that the judge fell into error in his assessment of the likelihood of level A harm occurring, which led to the erroneous conclusion that this was a harm category 2 case when it should have been category 3, and second that even on the judge’s findings he imposed a starting point which was manifestly excessive.

Mr Keith Morton QC on behalf of the appellant submitted that the judge’s assessment of likelihood required consideration of the likelihood of a situation arising resulting in the risk of any harm occurring and, if that situation arose, the likelihood of that harm being death. Here, for any risk to arise at all, a tipper truck would have to be driven contrary to training with the tipper container raised into or into close proximity with the cables. That had only occurred as a result of an unusual combination of events: the decision because of bad weather to move the tipping area closer to the cables but still a safe distance from them, and the fact that the driver had moved forward for a considerably greater distance than the short distance required to dislodge remaining earth. Mr Morton emphasised that the company undertakes some 422,000 tipper truck operations every year with 230 drivers using 200 vehicles and there has never been a similar incident. He accepted that if any harm occurred it could result in deaths but pointed out that there was no harm in this case and of 15,297 safety related electrical incidents reported to the Health and Safety Executive in 2017 only six, that is 0.04 per cent, resulted in death. He submitted that the judge should have assessed the likelihood of level A harm as low and thus that harm fell overall into category 3 not category 2. Mr Morton further submitted that even if the judge was right to conclude this was a harm category 2 case, the jump from the starting point of £600,000 to £850,000 was manifestly excessive, not least as it failed to reflect the judge’s conclusion that culpability was at the lower end of medium. He contended that the judge failed to take sufficient account of the fact that the definition of a large organisation was one with annual turnover of £50 million or more, a definition applying to organisations with far greater turnovers than the appellant, and that the appellant’s starting point should be towards the lower end of the range. Mr Morton submitted that it was only in 2017 that turnover had significantly escalated to £130 million and by relying on that figure the judge had effectively punished the company for its recent success. He argued that the judge had accepted there were no aggravating factors and significant mitigation, indeed all the mitigating factors set out in the Guideline were present. He submitted the judge failed at step 3 to have sufficient regard to the overall financial circumstances of the company including its turnover in past years, its low profit margins averaging just under 8 per cent, its poor cash flow and the fact that a proposed investment had not taken place because of its overall financial position. Mr Morton contended the judge attached too much significance to turnover in the most recent year and thus fell into the very error that step 3 was intended to avoid, as turnover was a factor to determine the starting point but thereafter it was incumbent on the court to reflect the defendant’s overall financial position when determining the actual fine.

On behalf of the prosecution Mr Puzey submitted that bad weather causing the decision to move the tipping area could not be viewed as an unusual or unlikely factor. In very bad weather and with a sticky load the driver moving forward more than two lorry lengths to dislodge the load could not be viewed as unlikely, particularly as there was no evidence the driver was ever instructed on a maximum distance he was permitted to move forwards with the tipper up. At worst it was simply a misjudgement by the driver. The fact that the driver knew there were overhead cables did not of itself render an incident of this nature unlikely. Reliance on training and instructions fell at the bottom of any hierarchy of safety measures as employees do make mistakes and can misjudge their positions. It was precisely because of that that precautions such as goal posts are required in such situations. The fact there was no evidence of any previous near miss was simply one factor to take into account. Mr Puzey referred to R v Diamond Box Ltd [2017] EWCA Crim 1904 in which at paragraphs 17 and 18 the court had addressed a similar submission and concluded that assessment of the likelihood of the relevant risk eventuating is quintessentially a matter for the sentencing judge on all the evidence. A substantial period in which a risk did not fruit into an accident did not necessarily mean the likelihood of the risk was not high but may weigh heavily in the balance. It all depends on the circumstances of the case. Other relevant factors may include the extent to which the source of the risk was isolated, accessible and in fact accessed, whether the risk was exposed or contingent on an individual taking other unexpected steps, and the nature of any safety features that were overridden. In the instant case the source was not physically isolated, it was accessible and did not involve safety features being overridden nor particularly unforeseeable actions on the part of employees. The fact there was no harm was a matter of pure good fortune. Mr Puzey submitted the judge was correct to conclude there was a medium likelihood of the harm that was risked eventuating and thus this was a harm category 2 case. On the second ground Mr Puzey underlined that the definition of large organisations was very wide and the appellant’s turnover for 2014 to 2016 was well over the £50 million threshold and was 2.5 times that threshold in 2017. He submitted that an upward adjustment from £600,000 to £850,000 at step 3 was entirely justified. The purpose of step 3 was to ensure a fine was sufficiently substantial to have a real economic impact which would bring home to managers and shareholders the need to comply with health and safety legislation. A fine of £850,000 was entirely appropriate as the notional sentence after trial. It represented about 10 per cent of recent operating profit per annum and the judge had expressly taken into account the company’s points as to its relative size, the fact it had recently made substantial investments and that it was not cash rich. This was a large company which was comfortable financially. In reality the principal feature of its mitigation was that it had no previous convictions. The fine imposed was within the margin of discretion afforded to the judge by the Guideline.

The Court of Appeal held that there was no dispute with the finding that culpability was at the lower end of medium nor with the finding that the seriousness of the harm risked fell into level A. As made clear in Diamond Box the assessment of the likelihood of the harm risked eventuating was quintessentially a matter for the sentencing judge on all the available evidence. Particularly in the light of the respondent’s submissions and the fact that the accident occurred within hours of the relevant work beginning, the judge was entitled to conclude that in this case the risk of eventuation was medium. No upward adjustment was required via the number of people exposed to the risk and there was no actual harm. At step 2 the company was clearly a large organisation and the appropriate starting point was a fine of £600,000 with a range from £300,000 to £1.5 million. However the company was not a very large organisation and nor did its recent turnover justify a substantial increase from the starting point at that stage. Rather there should have been in the course of the balancing exercise some reduction from the starting point to reflect the fact that culpability was in the lower part of the medium range and a further reduction to reflect the fact there were no aggravating features and a number of mitigating features. The court considered the appropriate total reduction from the starting point should have been £150,000 rather than an increase of £350,000, resulting at that stage in a notional fine after trial of £450,000. At steps 3 and 4 the judge had to step back and review and as necessary adjust that notional fine so that it fulfilled the need of being sufficiently substantial to have a real economic impact which would bring home to both management and shareholders the need to comply with health and safety legislation. Having taken into account the company’s submissions the judge concluded the company was very healthy financially. He was entitled to reach that conclusion and to apply it at stage 3. That should have resulted in an increase from the initial notional fine after trial of £

Tata Steel UK Ltd [2017] EWCA Crim 704
Diamond Box Ltd [2017] EWCA Crim 1904