England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice The Strand London WC2
		16th November 2001

1. th November 2001
2. MR JUSTICE ROUGIER: Originally the appellants in this case, Yorkshire Water Services, ("the Board"), faced a total of 33 counts of breaches of section 70(1) of the Water Industry Act 1991 in that they supplied water unfit for human consumption. The matter came on several occasions to the Crown Court because the Board wished to advance arguments based on the construction of the relevant legislation with a view to contesting the matter. Those arguments occupied a very great deal of the court's time over a considerable period. However, following an adverse decision on those matters, on 11th October and later 4th December 2000 at the Leeds Crown Court before His Honour Judge Jones QC the appellants pleaded guilty to a total of 17 of the counts. The remainder were left on the file. They pleaded guilty on the basis that although the water was unfit for human consumption there was no bacteriological risk to health. The board were then fined a total of £119,000 and ordered to pay the prosecution cost of £125,598.80. We forebear to enquire how such a precise sum was in fact calculated. That comes to a total of very nearly £250,000.
3. The 17 counts to which the Board pleaded guilty were the result of four separate incidents. The first in point of time was on 8th May 1998 and occurred at Sheepscar. There were three counts on the indictment reflecting three random households which had been affected. The Board were fined £7,000 on each of those counts totalling £21,000. The second incident took place on 12th June 1998. There were four counts in the indictment on a similar basis. The Board were fined a total of £28,000, namely £7,000 on each count. A third incident took place on 2nd July at Idle Hill. That was reflected in five counts of the indictment. The fines totalled £20,000, therefore £4,000 on each. Finally on 5th November 1998, again five counts in the indictment, the events happening at a place called Marton, a total of £50,000 divided as to £10,000 on each count.
4. They appeal against the fines and the costs by leave of the learned single judge.
5. A word about the events themselves. The Sheepscar incident occurred while the Board were installing metres to correct leakage. Some operative had closed the main valve some months before with the result that a considerable amount of water had accumulated and subsequently corroded. When the valve was reopened heavily contaminated water flowed. The length of time for which the contamination lasted was four days. The number of properties potentially affected was 165. The fault therein, if one can categorise it as such, lay first with the particular operative but more important with an inadequate system of risk assessment and procedure.
6. The Drightlington incident occurred when there was a pressure test again for leakage control. A contractor allowed air to be drawn into the system which had the effect of scouring it so that when normal service was resumed that matter was not anticipated and the water was filthy. The length of time was intermittent, but up to two days. A total of 930 properties were potentially affected. The fault principally lay in a lack of proper procedure both for contractors and the Board's employees.
7. The Idle Hill incident took place when an old disused reservoir was going to be put back on stream. Short of expensive and time consuming works, some inevitable impurities, notably from ancient metal pipes, was foreseen. The plan was to warn all customers in advance but owing to an internal breakdown of communications one area was not warned. That area suffered unheralded extreme discolouration for a total of two days and the potentially affected properties numbered 2,204. The fault basically was one of communication but there was also a degree of bad planning.
8. Finally the Marton incident. Here pump tests were being made on two bore holes. They caused such a disturbance in the sediment that the treatment process could not cope with it. Quality alarms were ignored and so contaminated water flowed. The faults here were probably the worst because not only was there a failure of the automatic control system, there was operator error, communication failure and it transpired that a previous similar incident had happened the year before. The matter lasted for something like two days. The properties potentially affected numbered 6,500.
9. Certain general observations on the case seem to us to be relevant. First, as the learned judge remarked, it had to be borne in mind that the Board took over an antiquated system which was badly in need of upgrading and had spent a very great deal of money for that purpose. However, as the learned judge also pointed out, the Board knew that money would have to be spent and calculated, correctly it seems, that it would still show a profit.
10. Second, three of the offences were not those of dilatory or negligent failure to improve the system or of system failure, rather the reverse. Those three all took place during operations where the Board were actually trying to upgrade the system. As usual the Germans have a single word for it, namely schlimmbesserung, signifying the act of fouling things up in the process of trying to make them better.
11. Thirdly, the failure of proper planning procedures and of communication were both serious and in our judgment avoidable. As the learned judge himself put it, having described the incidents, he said as follows:

"These incidents, however, arose out of a mixture of bad planning, bad organisation, poor quality engineering and in the case of Marton, rank disregard of an alarm system for the second time 12 months."

12. It has been pointed out, however, that the phrase "rank disregard" might be overstating the matter. It might have been more accurately put as a misunderstanding.
13. Fourth, there was no bacteriological hazard but nevertheless the water was so obviously disgusting that the customers would not touch it and would have been understandably alarmed as it began to flow from the taps. The visible contamination as described by the complainants was extreme and we have been privileged, if that is the right word, to have had a sight of it ourselves.
14. Next, though the duration of the incidents was comparatively short, generally two days or so, in that time very many people were affected. Many of the areas served were inhabited by those of limited means for whom the price of bottled water would have been a hardship.
15. Finally, the errors have been rectified at considerable cost and in certain deserving cases a degree of compensation has been paid.
16. The Board have submitted the following grounds of appeal. First, they submit that the level is manifestly excessive and disproportionate to the scale of the offences. Second, that it exceeded, when the costs are taken into account, previous fines and costs for similar incidents. Third, there was no regard given to the high level of the costs, although the learned judge claimed to have done so. Fourth, there was no sufficient credit to the company for an early plea of guilty at what is described as the earliest opportunity, but we must point out that it was following the judge's ruling on matters of law. It is suggested that there was a lack of principle in the approach and a level of arbitrariness in the fines as there was no clearly identified connection between the number of counts charged and the scale of the incident; the offences were premises-specific and there is no apparent link between the scale involved on previous occasions. Finally, the principle of totality.
17. It seems to us that in determining the amount of any financial penalty in cases of this nature the sentencing court ought to have the following considerations in mind. We would, however, step aside to say that the list is not necessarily exhaustive, and for further considerations which may be relevant in various situations we would repeat, and respectfully adopt, the catalogue that was given by Scott Baker J in the case of R v F Howard and Sons (Engineers) [1999] 2 All ER 249.
18. We return to the facts which we consider certainly relevant in this case as follows. (1) The degree of culpability involved in the commission of what is in effect an offence of relatively strict though not absolute liability. (2) The damage done. This will include the spatial and temporal ambit of the effect of the offence, together with ill effects both physical and economical. This is of particular importance bearing in mind that the Board is the only supplier of this particular commodity. There are no alternatives. It seems to us that the above two are the most important, but also (3) The defendant's previous record, including any failure to heed specific warnings or recommendations will also be material. This has a relatively small impact in this particular case. (4) A balance may have to be struck between a fitting expression of censure, designed not only to punish but to stimulate improved performance on the one hand, and the counter productive effect of imposing too great a financial penalty on an already underfunded organisation on the other. This aspect does not seem to feature largely in the present case. (5) The defendant's attitude and performance after the events, including their pleas. Here the Board clearly have a fairly good score, if one may put it that way. (6) Finally it must be correct to determine what the penalty for any one incident should be rather than tot up the various manifestations of that incident as reflected in the counts in the indictment. There is an obvious analogy between the principle of concurrent sentences of custody. Having determined the overall penalty, as a matter virtually of formality it is then divided among the separate counts. Although the homes affected is one of the material factors in determining the penalty, the number of complainants named should not be used as a multiplier since that is the result of an arbitrary decision of the prosecution.
19. We note too that in their very first formal advice to the Court of Appeal the Sentencing Advisory Panel advocated that in relation to certain environmental offences there should be forged a framework of consistency in sentencing with appropriate guidelines. The categories of offence were pollution of controlled waters and inappropriate disposal of waste. Though the offences to which the Board pleaded guilty are in a different category, clearly by parity of reason we would accept that a similar judicial process is desirable in cases brought under section 70. So care should be taken to fit any penalty within the framework of previously imposed fines. So in the light of the main variables which will exist we think that any rigid approach is not realistic since that framework will necessarily be wide.
20. Adopting the foregoing approach and bearing in mind the very large sum of the costs awarded and making admittedly somewhat undetailed comparisons with (a) the degree of culpability and (b) the extent of the damage as we have learned featured in previous cases heard in the crown court, four in number, together with the other matters urged in mitigation, it seems to us that although the learned judge did not take account of any irrelevant features, the level of penalties imposed in this case was somewhat too high. It appears out of line with the schedule of other fines and costs helpfully provided by the prosecution for similar incidents which have been imposed, notably in the four crown court cases, and which are probably more use to us than those before the magistrates whose powers were limited to a fine of £5,000. It is however worth noting that the prosecution themselves were content that these matters should come before the justices had the matter been settled by a plea of guilty and there had been no argument on the matters of law. Accordingly we propose to quash the four fines which are imposed and substitute different figures.
21. For the Sheepscar incident, counts 6 to 8, there will be a total fine of £18,000, namely £6,000 on each count. For the Drightlington incident, counts 9 to 12, a fine of £18,000, which will be divided as to £4,500 on each count. On the Idle Hill incident, five counts, a total of £14,000, working out at £2,800 per count. Finally, the most culpable, the Marton incident, a fine of £30,000, five counts, that produces £6,000 on each count. That brings the total to £80,000.
22. Where the award of costs is made we are not minded to disturb that. These costs were incurred because the Board unsuccessfully sought to avoid criminal liability on a point of law which went against it. To that extent, therefore, this appeal is allowed.