FJ Chalcroft Construction Ltd, R. v

Neutral Citation Number: [2008] EWCA Crim 770 IN THE COURT OF APPEAL CRIMINAL DIVISION No: 200705879/A2 Royal Courts of Justice Strand London, WC2A 2LL Date: Wednesday, 12th March 2008 B e f o r e: LORD JUSTICE TOULSON MR JUSTICE PENRY - DAVEY MR JUSTICE SIMON - - - - - - - - - - - - - - - - - - - - - R E G I N A v FJ CHALCROFT CONSTRUCTION LTD - - - - - - - - - - - - - - - - - - - - - Computer Aided Transcript of the Stenograph Notes of WordWave International Limited A Merrill Communications Company 190 Fleet Street London EC4A 2AG Tel No: 020 7404 1400 Fax No: 020 7831 8838 (Official Shorthand Writers to the Court) - - - - - - - - - - - - - - - - - - - - - Mr D Travers appeared on behalf of the Appellant Mr B Thorogood appeared on behalf of the Crown - - - - - - - - - - - - - - - - - - - - - J U D G M E N T MR JUSTICE PENRY-DAVEY: On 29th March 2007 in the Crown Court at Nottingham, this appellant pleaded guilty to two counts of failing to discharge the duty under the Health and Safety at Work Act 1974, and on 12th October was sentenced to pay fines totalling £260,000, that is £80,000 on count 1 and £180,000 on count 2, and in addition ordered to pay £80,000 prosecution costs. The company appeals against sentence with the leave of the Single Judge. The facts were these. At about midday on 18th November 2003 a young electrician, Mr Askew, met his death when he fell from a mezzanine floor during the construction of a cold store warehouse. The appellant was the principal contractor for the project and the deceased was employed by a sub-contractor. The fall occurred because a steel element which was part of the fabric of the building gave way when he leant upon it. The decision had been taken to use the structural element as part of the edge protection for the work at height. It was common ground that this was not itself inappropriate but the integrity of the structural component should have been subject to an effective inspection prior to its use for this purpose. There was a lengthy Newton hearing, at the end of which the judge concluded that, had the company discharged its duties under the Health and Safety legislation, it would have been significantly less likely that the accident would have occurred. He found that the construction phase health and safety plan was inadequate. He also concluded that the company had failed to manage safety in a number of other respects. He found that the company had failed adequately to net under roof work, failed to have an exclusion zone below work which was being carried on at height, failed to ensure that toe boards were in place and left edges at height unprotected for significant periods after lifting operations were carried out. The company had already admitted an inadequate system in respect of the lifting of construction material onto floors above ground level and the use of an unsafe system using an insecure ad hoc platform to fix panels at height. It is relevant in this case to follow the course of the hearing which, as we have indicated, included a substantial Newton trial, where the Recorder made careful findings of fact in considerable detail. When he came to sentence he made reference to the case of R v Howe & Sons Engineers Ltd [1999] 2 Cr App R(S) 37 and R v Balfour Beattie [2006] EWCA Crim 1586. He described the appellant company as an essentially well managed business which had been subjected to a management buy-out and would be profitable in the future and consequently able to pay the fine. He identified the aggravating features of the case as the death of the young man concerned and a failure to heed warnings from experienced sub-contractors, and he concluded that the standard of health and safety fell below an acceptable level and far short of what was reasonably practicable, a neglect that put people's lives at risk. He further concluded that the risk identified was not momentary but had continued for a period of several weeks. He indicated that there would be a 15 per cent discount for plea. He took account of the company's good record and of the steps taken since the accident. He concluded, as we have indicated, that the appropriate starting point was £400,000. The appellant concedes that the judge was entitled to conclude that the features that he identified were aggravating features. In particular, the death of the employee concerned, the extent of the breach, in the sense that there were a number of breaches of duty, the poor management of working at height, the absence of netting under part of the roof works, and of a cordoned off area beneath workers, the fall of materials from the roof and the use of an unsafe ad hoc working platform. Finally, there was the fact that the breaches were not momentary but extended over a period of time. On the other hand, it is submitted that there was plain mitigation in this case, including the company's good safety record, the fact that it had taken steps to put things right, albeit after the event, and that it was appropriate that credit should be given for a plea of guilty notwithstanding the adverse findings in the Newton hearing. Other matters relied on as relevant to sentence were the fact that this was not a case where the company had deliberately taken safety risks for profit, and the means of the company whose pre tax profits varied from £730,000 in 2004 to £219,000 in 2007. Equally the turnover figures were very substantial indeed. It appears that in May 2007 there was a management buyout or, as Mr Travers describes it this morning, a buy-in, with the consequence of significant debt and resulting interest payments amounting to some £250,000 per annum. The relevance of the pre tax profit figure follows from the observations of this Court in R v ESB Hotels [2005] EWCA Court of Appeal 122, where the view was expressed that the court should have regard to pre tax profits rather then gross turnover. Although the appellant concedes the breaches were serious, it is submitted that the Recorder adopted too high a starting point for a company of this size, even if it was substantially culpable for the breaches of duty that occurred. It has to be noted that the Recorder before sentencing had the advantage of hearing evidence during the course of a Newton hearing, and he had given a detailed and reasoned judgment at the conclusion of that hearing setting out his approach to each of the different aspects of the case, the evidence that he heard, and the conclusions he reached, for example, on levels of culpability. Equally his approach to the question of sentence was very careful and detailed. In the course of his sentencing remarks, he referred to the guidance given by this Court in the case of Howe & Sons, indicating that the object of prosecution for health and safety offences was a safe environment for those working and others who might be affected. The fines, he said, needed to be large enough to drive the message home and to include a legitimate element of deterrence and expression of the public anger at breaches resulting in loss of life to innocent people. He mentioned the terrible effects the death had had upon the deceased's family, and identified the object of the law as to try to minimise the risk of such disasters with their terrible consequences. He set out the principled guidance set out in the Balfour Beattie case, including the seriousness particularly of breaches of section 3 of the 1974 Act on the basis that they are the foundation of protecting health and safety and the fact that historically fines had been too low and in many cases derisory. He took into consideration that as a result of the management buyout the company was not showing much profit. His conclusion was SMITH BERNAL WORDWAVE basically that it was a well run business that was going to be profitable in the future. Mr Travers, in addressing us this morning, has not sought in any way to rely on the poverty of this company in the context of payment of fines. The Recorder thus approached the case on the basis that the company was well able to afford the fines that he intended to impose. He described the loss of life as "needless", with failure to heed warnings communicated to members of the company including warnings from experienced subcontractors which ought to have made those receiving warnings take stock. The standard of health and safety, he said, amounted to people going through the motions and fell far short of what was reasonably practicable. In the result, the defect created a high risk for anyone who might have leant or fallen against the insecure handrail and the risk had existed for a significant period of time and probably several weeks. He then concluded that the appropriate deduction for plea was 15 per cent, a percentage with which the appellant does not take issue. On the positive side, and identified by the Recorder, was the previous good record of the company, and the steps taken since to tighten up health and safety procedures and to avoid any repetition, steps which it is clear on the accident figures have had positive results. In the result he regarded the case as very serious, but not in the most serious category of those who sacrifice safety for profit with fines at or about £600,000. It was on that basis that he took a starting point of £400,000. Mr Travers accepts that there is no tariff for fines in this area of the law, where the facts are infinitely variable and consistency may not be a primary aim of sentencing. Equally, he submits that the courts are entitled to look at the framework of penalties imposed and points to the health and safety enforcement report, giving provisional figures for 2004 and 2005, with an average penalty per offender of £12,642. It is clear that that includes an extremely wide range of fines, from £2 million down to £400,000, £325,000, £300,000, £250,000, £200,000, £175,000, £150,000 and £100,000. With regard to penalties imposed in cases involving work-related fatalities, the provisional figures show an average penalty per case of £42,795, with an average penalty per conviction of £29,867. However, the appellant concedes that consideration of averages was not of particular assistance but Mr Travers does rely on them, not in the sense they provide any form of tariff but offering some insight into the framework of penalties in this area. It is thus submitted that the Recorder's starting point was outside the proper range for a company of this size. The respondent has put figures before the court indicating that substantial fines are more frequent than may be indicated on the appellant's figures. But we have considered the matter with care on the basis on which the Recorder approached it. He exercised his discretion in this case in fixing the levels of fine on the basis of very full and careful analysis of the relevant aspects of this case, both for and against the appellant, both aspects that made the case more serious and the significant mitigation that there was available to this appellant. In the result, we do not consider that this fine overall was out of scale. The approach of the Recorder was very careful. He identified the relevant aggravating and mitigating factors, and was in a particularly good position to assess the appropriate level of penalty, following the long Newton hearing. He arrived at a sum total in the case of fines, reflecting both those aspects of the case. In our judgment, in the result the overall SMITH BERNAL WORDWAVE fine in this case was neither manifestly excessive nor wrong in principle. The appeal against sentence is accordingly dismissed. MR THOROGOOD: I did not have to be here, the respondent did not have to be represented. Given the option we were, might I ask to mention whether it is possible to entertain an application for costs. LORD JUSTICE TOULSON: What exactly would your application be, that you get this from public funds or from the appellant? (The Bench Conferred) MR THOROGOOD: From the appellant. LORD JUSTICE TOULSON: We are not going to make that order for this reason. The notice of appeal did not challenge in any way the findings of fact made by the Recorder in the Newton hearing. Had there been such a finding, and the respondents had attended to support the Recorder's findings after a contested hearing, that would have been analogous to an appeal on conviction. Different considerations might have arisen. But their appeal has been presented in a very narrow scope. They have said, accepting all the Recorder's findings because of the means of company and looking at the overall scale of sentencing they invited the court to reduce it. We declined to do so. Whilst I reiterate my thanks to you for the documents you have prepared, we do not think it would be just in these circumstance that the appellant be required to pay your costs of attendance today. SMITH BERNAL WORDWAVE