Palmer Timber Ltd [2019] EWCA Crim 611

Regina v Palmer Timber Limited [2019] EWCA Crim 611 concerned an appeal by the appellant company against a fine of £730,000 imposed in the Crown Court at Wolverhampton following a guilty plea to an offence contrary to regulations 4 and 17(1) of the Workplace (Health, Safety and Welfare) Regulations 1992 and section 33(1)(c) of the Health and Safety at Work etc. Act 1974. The offence related to a failure to ensure that the workplace was organised in such a way as to ensure that pedestrians and vehicles could circulate in a safe manner.

Palmer Timber Limited had pleaded guilty in the magistrates’ court on 3 August 2017 and had been committed to the Crown Court for sentence. His Honour Judge Berlin sentenced the company on 22 June 2018 to a fine of £730,000, payable over four years. The Court of Appeal (Lady Justice Sharp, Mr Justice Goose and His Honour Judge Sloan QC) heard the appeal.

The appellant was a privately owned company operating from a 30-acre site at Cradley Heath, Sandwell, in the West Midlands. It employed almost 100 people and dealt in wood products for the construction industry. The company operated a large modern mill and owned its own transport fleet including articulated lorries and forklift trucks.

On 23 February 2015 at around 4.00 pm, the yard, which contained open spaces between large open-ended buildings, was working as normal. The site was busy and noisy. Six or seven lorries were being loaded at any one time by forklift trucks, side-lift or Combi-lift vehicles. Pedestrian employees were present to assist in the movement of wooden products from racks to forklift and from forklifts to lorries.

Sean Buttery, a side-loader driver, and Paul Baker, a picker, had just completed loading an 18-tonne curtain-sided lorry. Both men were wearing high visibility jackets but were not seen by Matthew Williams, who was driving a Combi-lift truck. The Combi-lift trucks had been recently introduced to the site. In 2014 the appellant had acquired some Combi-lift trucks to trial them within the business. Drivers and a supervisor had found that the lift mast on the Combi-lift trucks obscured the vision to the front off-side, creating a substantial blind spot for the operator. The appellant had provided some additional training and awareness instruction before introducing the Combi-lift trucks permanently on 6 February 2015, some six weeks before the accident.

Mr Buttery and Mr Baker were standing in the yard, waiting to commence further work. They were not seen by Mr Williams as he drove his Combi-lift truck towards them. It appeared that both men were positioned in the blind spot such that they could not be seen by Mr Williams. Mr Buttery was initially struck on the ankle by the right side of the truck, causing him to suffer a fractured ankle. He avoided more serious, life-threatening injury by clinging to the fork of the truck and the safety bar on top of the engine. Mr Baker was also struck to the right side of his lower leg but was then dragged along the ground for six or seven yards before the driver stopped. Mr Baker’s head was directly in front of the wheel of the Combi-lift. His life had been saved by pure chance. The high visibility coat he wore was made of a material which was able to slide along the ground rather than become trapped under the wheel of the Combi-lift, which would certainly have led to his death. Nevertheless, Mr Baker suffered very significant and life-threatening injuries. There was substantial blood loss at the scene. He suffered a fractured eye socket and a lost piece of bone from his face, a nine to ten-inch scar on the left side of his face, and 14 stitches were required to reattach his left ear. He had nerve damage on both sides of his face and was unable to raise his eyebrows. He had trouble with his speech and eating because of damage to his tongue. His left collar bone was broken and required to be pinned and plated. He suffered a de-gloving injury to his hand and left forearm, losing eight to nine inches of skin. Both forearm bones were broken on the left side. He had a broken rib and damaged his left knee. He required six skin grafts and lost an artery from his arm. He had very limited movement in his fingers, which was likely to be permanent.

On 10 March 2015 an Improvement Notice was served on the appellant by the Health and Safety Executive requiring the company to remedy its failure to organise its workplace in such a way that pedestrians and vehicles could circulate in a safe manner. It was after the service of this notice that the appellant undertook the necessary changes to the workplace.

Before sentence, the prosecution and the appellant had indicated their respective submissions on culpability and harm under the Health and Safety Offences Guideline by the Sentencing Council. The prosecution contended that culpability should be assessed as high, whilst the appellant submitted that it would be assessed as medium. The parties agreed that the seriousness of harm risked was at level A, namely death or the highest physical or mental impairment, and that the likelihood of level A harm was at the medium level, thereby setting harm at category 2 under the Guideline.

His Honour Judge Berlin applied the Guideline in the correct stepped approach. He concluded that culpability at step 1 was at the upper end of high under the Guideline. There was evidence that the appellant had failed to put in place measures that were recognised standards in the industry, as particularised in the Health and Safety Guidelines on Safe Site Design. Further, the appellant had failed to conduct any suitable and sufficient risk assessment, which was made more serious by the introduction of Combi-lift vehicles in January 2015. Drivers and a supervisor had raised clear concerns about the significant blind spot created by the use of the Combi-lifts. The judge described this as “highly culpable in itself”. The appellant had also allowed the breach of its duty to subsist over a long period of time. Taking these factors cumulatively, the judge concluded that culpability was at the upper end of the high category.

The judge rejected the contention that there was only a medium likelihood of risk of harm at level A and concluded that the likelihood of such harm was high. An independent Health and Safety Consultant had identified the vehicle and passenger movement on site as a high risk in 2013, before the introduction of Combi-lifts. Notwithstanding this previously identified high risk problem, in January 2015 the appellant had introduced Combi-lift vehicles some six weeks before the accident. In the mind of the judge this increased the likelihood of very serious harm given the blind spot problem, which added to the already high risk and noisy yard, particularly at peak loading times. The judge stated that it was no coincidence that within six weeks of their introduction a very serious accident, which could have been fatal, occurred. Given that the risk of death or the most serious injury was obvious in collisions between forklift and Combi-lift vehicles, the judge found that there was a high likelihood of level A harm caused by the offences of the appellant.

Further, the judge found that the harm assessment in paragraph 2 of the Guideline, both subparagraphs (i) and (ii), were engaged. The breach of duty had exposed a number of workers to the risk of harm on a daily basis as they moved around the yard. Also, whilst the type of harm caused to Mr Baker fell within level B, it was only a matter of chance that he did not suffer fatal injury and was only just short of level A.

The turnover of the appellant’s business meant that it fell within a medium-sized organisation within step 2 of the Guideline. With high culpability and harm at category 1, the starting point was a fine of £950,000 with a range of £600,000 to £2.5 million. Adjusting the starting point upwards to reflect the harm findings under paragraph 2 and balancing the mitigating factors whilst reflecting on the appellant’s annual report and financial statements, the judge increased the fine to £1.4 million. After discount for early plea, the fine imposed was £730,000. The judge granted four years in which the fine was to be paid.

On appeal, the appellant contended first that the judge had incorrectly concluded that culpability was high. The appellant submitted that the judge did not give sufficient account to the fact that the workforce had received training in the use of the Combi-lifts which included techniques when operating the plant, namely that the operator should adjust his head position to see around the obstruction created by the lift mast. The judge had also failed to take sufficient account of the difficulty in segregating plant and pedestrians within the site.

Secondly, the appellant argued that the judge was wrong to conclude that the likelihood of harm risk at level A was high. Leaving aside the contention that the agreement between the parties upon this issue should have been adhered to by the judge, the appellant argued that he had wrongly elided the harm risked with the likelihood of harm arising. Further, the judge had given insufficient weight to the limited measures introduced by the appellant to reduce risk, for example by imposing a one-way system, speed limits and driver leaflets with toolbox training. The appellant also submitted that the judge had failed to take sufficient account of industry data that only 50 people were killed and over 5,000 were injured in accidents involving workplace transport each year. Such data did not lead to a conclusion of high likelihood of level A harm.

Thirdly, the appellant argued that the judge had disproportionately increased the fine to £1.4 million before reducing it to £1.1 million after mitigating factors were taken into account. The increase in fine should not have been so great when the actual harm caused was not at level A, namely death.

Fourthly, the appellant submitted that the level of fine of £1.1 million before discount was disproportionate compared to the pre-tax profit of the appellant’s business, which averaged over a period from 2015 to 2017 to approximately £600,000. The fine represented close to twice the average pre-tax profit of the business, and such a fine should be reserved for the most serious cases.

On the question of whether the judge was bound by the agreement between the parties on the likelihood of harm, Mr Justice Goose referred to the decision in R v ATE Truck and Trailer Sales Limited [2018] EWCA Crim 752, in which Gross LJ had stated that such sensible agreement was to be encouraged and would be weighed carefully by any court before departing from it. However, no such agreement could bind the court. As a matter of constitutional principle the imposition of a sentence was a matter for the judiciary. Principles of transparent and open justice pointed to the same conclusion. A private agreement between prosecution and defence would inform the court but could not be determinative of sentence. The court had repeated the same principle in the earlier decision of R v Diamond Box Limited [2017] EWCA Crim 1904, when Hickinbottom LJ had stated that the assessment of the likelihood or chance of harm was quintessentially a matter for the sentencing judge on all the evidence before him. Accordingly, whilst it was important for the judge to consider the agreed position between the parties upon the likelihood of harm, he was not bound by such agreement.

In relation to the first ground concerning culpability, Mr Justice Goose held that the judge’s finding on culpability within the high category, and particularly its upper level therein, could not be faulted. The breaches of duty had subsisted over a long period of time, with near misses two years earlier, even before the introduction of Combi-lifts. Such risk assessments as had been made, none for the Combi-lifts, did not lead to any significant planning or changing to the workplace beyond the most conservative of effort. The judge was right to conclude that culpability was in the high category.

In assessing harm, the court held that the judge was entitled to find on the evidence that there was a high likelihood of harm in this case. The judge had not elided the two questions that needed to be asked, namely what the likelihood of the event occurring was and what was the likelihood of that event causing level A harm. The Independent Consultant had identified as a high risk the arrangements within the yard concerning vehicle and pedestrian accidents. The introduction of the quiet Combi-lifts with their blind spot added not only to the likelihood of an accident or event but also the likelihood of that event causing level A harm. Collisions between forklift and similar vehicles and pedestrians were highly likely to cause the most serious injuries and death. The injuries caused in this case were undoubtedly life-threatening, and death was only avoided by mere chance. In answering the two questions positively within paragraph 2 of harm within the Guideline, the judge was correct to conclude that there was a high likelihood of harm and not merely a medium likelihood. The judge had taken into account, when assessing the likelihood of harm, the limited steps taken by the appellant, but had said of them that this was not addressing the real and critical, daily problem of mixing pedestrians and vehicles in a congested yard. There were not any barriers or delineated traffic routes to enable safe circulation, which itself increased in risk following the introduction of the three Combi-lifts in January 2015. With that observation the court agreed.

In arriving at a fine of £1.1 million before discount, the judge had taken into account the aggravating and mitigating factors identified within his sentencing remarks. He had carefully assessed the financial position of the appellant disclosed within its accounts, including its pension scheme liabilities. The court did not find that the judge had fallen into error. A starting point for harm category 1 with high culpability for a medium-sized organisation under the Guideline was £950,000. When taking into account the number of workers who were at risk on a daily basis within the yard and that the offence was a significant cause of actual harm just short of death, the judge had correctly increased significantly the fine to £1.4 million before reducing it by £300,000 to take into account mitigating factors.

It should also be borne in mind that the appellant had spent £1.7 million over a two-year period developing its site so as to increase the size, erecting further warehousing and racking and adding electrical fixed installations. All of this was undertaken or almost complete before the appellant had properly turned its attention to the serious and obvious risk which comprised the offence. This demonstrated, first, that the appellant had failed to prioritise the health and safety of pedestrians within the yard above development of the site, and secondly, it revealed the financial resources of the appellant. This was particularly significant in relation to step 3 of the Guideline, ensuring that the proposed fine based on turnover was proportionate to the overall means of the offender. The fact that the fine imposed exceeded the pre-tax profit of the company was plainly something to be taken into account by the court when sentencing for step 3 of the Guideline. The court did not find that exceeding the annual pre-tax profit of the company should only occur in the most serious cases; the Guideline made no such prescription. It required a careful judgment after following the Guideline. The court was not persuaded in this case that the fine was disproportionate. In addition, permitting the appellant four years to pay the fine of £730,000 required payments of £182,500 a year. This was well

Ayhan [2011] EWCA Crim 3184, [2012] 1 WLR 1775, [2012] 1 Cr App R 27
Health And Safety Executive v ATE Truck & Trailer Sales Ltd [2018] EWCA Crim 752; [2018] 2 Cr.App.R.(S.) 29, CA.
Diamond Box Ltd [2017] EWCA Crim 1904