Matthew Howarth Regulatory Update: Clarifying sentencing for health and safety offences (Faltec Europe Ltd v Health and Safety Executive)
Faltec Europe Ltd v Health and Safety Executive [2019] EWCA Crim 520, [2019] All ER (D) 03 (Apr)
Factual Background
Faltec Europe Limited (FEL) a motor car parts manufacturer had operations spread over five separate factory units.
The water system at the site comprised four cooling towers and 22,000 metres of pipework. There were two separate outbreaks of legionnaires’ disease—one in October 2014 with one person infected and another in April/May the following year with four people infected. No one suffered a fatal injury. Two charges were brought in relation to the exposure to legionella bacteria.
The agreed expert evidence was that in a human population with a normal spectrum of characteristics, the recorded proportion of those exposed in outbreaks of legionella pneumophila from cooling towers who would be expected to sustain fatal injuries would be between 0 and 0.04%. Even though the expert was agreed the sentencing judge based on this position set the likelihood of level A harm arising was high within the guidelines.
Another charge was brought against FEL when an employee sustained injuries as a result of an explosion in one of their machines (flocking machine.)
FEL was fined £1.6m (£800,000 related to the exposure to legionella bacteria and £800,000 related to the explosion in the flocking machine). FEL appealed against the fine.
What are the practical implications of this case and some key learning points?
There are a number of practical implications established in this case and key learning points when sentencing under the Sentencing Guideline for Health and Safety Offences (the Sentencing Guideline). This judgement will affect other regulatory offences, such as those relating to food safety and environmental protection.
The judgement is key in assessing seriousness of harm risked and likelihood of that harm arising.
- Importance of the criminal standard of proof and the Court’s approach must be based on the evidence that is before the court. The decision highlights the importance of expert evidence in determining the likelihood of harm arising, particularly in cases involving risk of disease where the likelihood of a particular level of harm arising should be assessed by reference to the scientific evidence before the sentencing court. Courts cannot simply base decisions on the impression of scientific evidence.
- Where actual harm is caused by the offence but to a lesser degree than the harm that was risked, a sentencing court is prohibited under the Sentencing Guideline from moving up a harm category regardless of exposure of workers or members of the public to the risk of harm
- The motive of a defendant is a necessary consideration in determining whether the aggravating feature under the Sentencing Guideline of ‘cost-cutting at the expense of safety’ is proven in any one individual case. It cannot simple just be that the more expensive option brought more safety advantages, after it is arguable that not all companies could sustain very high levels of spending.
- The size of a provision made in a defendant’s company accounts for the offences for which a defendant is being sentenced is not relevant when the sentencing court is determining whether to make a downward adjustment to the any fine that it is proposing to impose, if so it could discourage companies from setting aside money during risk assessment/planning.
Issue of Proportionality
– Taking financial resources of a holding company into account when assessing proportionality of a fine imposed on a subsidiary company:
The Sentencing Guideline provides that the resources of a linked organisation can be considered if ‘exceptionally it is demonstrated to the court that the resources of a linked organisation are available and can properly be taken into account’. The judgment re-iterated the principles of separate legal personality, that criminal liability is personal, and that a fine should not be imposed on the basis that it will, or might, be paid by a third party.
Whether the ‘resources of a linked organisation are available and can properly be taken into account’ is a question that should be approached with a ‘degree of caution’:
‘Ordinarily, it is only the resources of the offender which are to be taken into account, the fact that companies are members of the same group or have a subsidiary-parent relationship, will not of itself satisfy the test, it is only in exceptional cases that the resources of a linked organisation fall to be considered.’
In this case, the Court of Appeal held that the sentencing judge was entitled to have ‘some limited regard’ to the holding company’s resources on the basis that the economic realities demonstrated that the defendant was dependent on the holding company in order for its accounts to be produced on a going concern basis.
However, the judge erred in proceeding on the basis that he was entitled to have regard to the resources of the holding company because it would have profited from the state of affairs leading to the offence. The judgment explains that, even if a holding company is culpable in the state of affairs leading to the offence, it does not follow that its’ resources are available or that they can properly be taken into account.
Judgement of the Court of Appeal
The fine was reduced by £420,000. In relation to the charges concerning the exposure to legionella bacteria, it held that the sentencing judge erred in his determination that there was a high likelihood of level A harm arising. It held that the correct categorisation was medium likelihood. There was no reduction in relation to the explosion.
Regulatory Law – Health & Safety and Environmental Offences
Matthew Howarth practices across a range of regulatory matters. He has recently been appointed to Panel C of the List of Specialist Advocates in Health & Safety and Environmental Law. He is routinely instructed at sentence for both Prosecution and Defence.
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