England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice The Strand London WC2
		27th May 2002

1. MR JUSTICE FIELD: In this appeal the appellants are Fresha Bakeries Ltd ("Fresha Bakeries") and Harvestime Ltd ("Harvestime"). These two companies constitute part of a corporate group or business unit which carry on, and carried on at the material time, the business of making bread and related products on a large scale. Their immediate parent company is William Price & Sons Ltd. There are two locations where the bread is made, one in Leicester, which is owned by Fresha Bakeries, and the other at Walsall, which is owned by Harvestime.
2. At the material time at the Leicester site, which was, as we have said, owned by Fresha Bakeries, there were three bread producing ovens, A, B and C. These ovens are long metal encased tunnels. They operate at 260 degrees centigrade. The dough is placed in tins on a conveyor belt approximately 20 metres long and 3.3 metres wide, which enters at one end and then travels slowly through the oven and exits at the other end. The width of the conveyor belt takes up virtually the whole of the width of the oven. Travelling at its fastest speed, the conveyor takes 17 minutes to pass through the oven.
3. The conveyor consists of a number of grids which are bolted through metal plates at either end to the conveyor chain. Some time in May 1998 a grid came off the conveyor in oven B and landed in the bottom of the oven. It was decided that it should be removed. The chief engineer, and the man with specific responsibility for health and safety at the Leicester site, was Mr Dennis Masters, who had joined the company in July 1997. Mr Masters decided that instead of having the manufacturers of the oven to shut the oven down and retrieve the grid, the job would be done in-house. The men selected to go into the oven were Mr Ian Ericsson and a Mr David Mayes. Mr Ericsson was a maintenance engineer who was employed by Harvestime and was based at the Walsall plant. He had twenty years' experience working with bread ovens. Mr Mayes was a boilerman employed by Fresha Bakeries and was based at the Leicester plant. It was decided that the oven in question, oven B, would be switched off for eight hours, the period of time it was thought would be sufficient to allow it to cool to a safe temperature for the two men to go in and retrieve the grid.
4. On the morning in question, 16th May 1998, the oven was switched off at approximately 9 am. Ten or eleven grills were removed from the conveyor. This was done to create a gap which the two men could occupy. They would enter the oven under the conveyor and walk or crawl along at the speed of the conveyor, find the grid and retrieve it. They had to keep moving with the gap as the conveyor moved along or they would be trapped and crushed.
5. Instead of the oven being switched off for eight hours, the oven had only been off for two hours when the men went in. There is a suggestion that one or both of them wanted to get on with the job so that they could see the Cup Final that was to be played that afternoon. No one looked at the temperature gauges. Had anyone done so he would have seen that the temperature inside the middle of the oven was 100 degrees centigrade, the temperature at which water boils. Mr Ericsson and Mr Mayes each took with them a walkie-talkie. After about ten minutes their messages became garbled and they passed out. They were about halfway through the oven. The conveyor kept going. They were in the bottom of the oven. The conveyor was going too slowly to get them out before they succumbed to the heat. The clearance between the returning conveyor and the floor was 26.5 cm and 34.5 cms, reducing at the exit to between 19 cms and 21 cms. Mr Ericsson somehow managed to get to the exit below the conveyor but could not get through. Eventually the hole was enlarged with a crowbar and he was pulled out. He had been in the oven for about twenty minutes. Attempts were made to resuscitate him, but they failed. His skin was heat reddened. There was extensive skin loss over his back, chest and abdomen, and there was skin slippage over his front and back. He also had deep bruising over his back and shoulders as a result of being dragged out through the gap where the conveyor exited. He died of circulatory collapse and a complication of heat exposure.
6. Mr Mayes collapsed inside the oven and became trapped in the machinery. He was badly burned and died from multiple injuries and circulatory failure.
7. Harvestime and Fresha Bakeries were charged on indictment with offences under sections 2 and 3 of the Health and Safety at Work Act 1974 ("the Act"). Four individuals were also charged under the Act. These were Mr John Bridson, the Chief Executive of the bakery group; Mr Dennis Masters, the Chief Engineer at the Leicester plant; Mr Brian Jones, the Production Director at the Leicester plant; and a Mr Hanson, who was based at Walsall. Fresha Bakeries and Harvestime pleaded guilty to the counts laid against them. These pleas were notified after committal and were tendered at the first appearance at Leicester Crown Court on 25th August 2000. Mr Masters also pleaded guilty on 25th August 2000.
8. On 11th June 2001, the day before the trial, Mr Bridson and Mr Jones pleaded guilty and the case against Mr Hanson was not proceeded with.
9. All five defendants were sentenced on 17th July 2001 by His Honour Judge Hammond at the Leicester Crown Court. Fresha Bakeries was fined £250,000 and ordered to pay costs of £175,000. Harvestime was fined £100,000 and ordered to pay costs of £75,000. Mr Bridson was fined £10,000 and ordered to pay costs of £5,000. Mr Jones and Mr Masters were fined £1,000 and £2,000 respectively and had no costs orders made against them.
10. Fresha Bakeries and Harvestime appeal against sentence with the leave of the single judge. On their behalf, Mr Treacy QC has submitted that the learned judge erred in the following three main respects:

(1) he set the overall level of fines too high at £350,000; (2) he set the overall financial penalty, of costs plus fine too high at £600,000; and (3) he acted contrary to principle and fairness in ordering the payment of costs in the total sum of £250,000.

11. We deal first with the level of fines. Mr Treacy QC submitted that these were clearly too great having regard to:

(1) the appellants' early guilty pleas, which were indicated before the first Crown Court appearance;

(2) the major efforts made after the event to deal with health and safety issues; in this connection the evidence showed that independent audits by the British Safety Council now rated the Fresha Bakeries factory in the top category for health and is a safety;

(3) the undisputed fact that this was not a case where deliberate breaches of safety legislation had taken place or the breaches were with a view to profit or that safety was sacrificed to production needs;

(4) the levels of expenditure both before and after the accident on health and safety in training;

(5) the fact that the Leicester plant had been bought in 1996, at which time it was physically decaying, loss-making and suffered from poor production and management standards;

(6) the fact that Mr Ericsson was a highly skilled and experienced worker recruited specifically for oven installation and repair;

(7) the much improved accident rate that had been achieved by the companies;

(8) the fact that the companies had no previous convictions.

12. Guidance on sentencing for offences against the Act were laid down by this Court in R v Howe Engineers Ltd [1999] 2 Cr App R (S) 37. In giving the judgment of this Court, Scott Baker J observed that the Act requires employers to do what good management and common sense requires them to do anyway, ie look at what the risks are and take sensible measures to tackle them. Failure to fulfil the general duties under the Act are particularly serious as those duties are the foundations for protecting health and safety. The Court went on at page 43 to outline the following relevant factors that should be taken into account:

"In assessing the gravity of the breach it is often helpful to look at how far short of the appropriate standard the defendant fell in failing to meet the reasonably practicable test.

Next, it is often a matter of chance whether death or serious injury results from even a serious breach. Generally where death is the consequence of a criminal act it is regarded as an aggravating feature of the offence. The penalty should reflect public disquiet at the unnecessary loss of life.

Financial profit can often be made at the expense of proper action to protect employees and the public. Cost-cutting is a crucial tool in achieving a competitive edge. A deliberate breach of the health and safety legislation with a view to profit seriously aggravates the offence.

...

Other matters that may be relevant to the sentence are the degree of risk and extent of the danger created by the offence; the extent of the breach or breaches, for example whether it was an isolated incident or continued over a period and, importantly, the defendant's resources and the effect of the fine on its business.

Particular aggravating features will include: (1) a failure to heed warnings; and (2) where the defendant has deliberately profited financially from a failure to take necessary health and safety steps or specifically run a risk to save money.

Particular mitigating features will include: (1) prompt admission of responsibility and a timely plea of guilty; (2) steps to remedy deficiencies after they are drawn to the defendant's attention; and (3) a good safety record."

13. The Court also stated at page 44 of the report:

"The objective of prosecutions for health and safety offences in the workplace is to achieve a safe environment for those who work there and for other members of the public who may be affected. A fine needs to be large enough to bring that message home where the defendant is a company not only to those who manage it but also to its shareholders."

14. In a subsequent paragraph, also on page 44, this Court said:

"Where a defendant is in a position to pay the whole of the prosecution costs in addition to the fine there is no reason in principle for the court not to make an order accordingly. The decision remains, of course, in the court's discretion in the terms of the statute."

15. We were also referred to R v Friskies Petcare UK Ltd [2000] 2 Cr App R (S) 401, where a fine of £600,000 for an offence contrary to the Act leading to a fatality was reduced to £250,000. It was noted in the judgment in that case that reported cases showed that fines in excess of £500,000 tended to be reserved for those where a major public disaster occurs. This Court also observed that in fining a major national retail employer £425,000 for breaches of the Act at one of its key distribution centres Kay J had said that the working practices in that case dated back to the Middle Ages and safety had been deliberately sacrificed for profit.
16. The most recent authority we were referred to was R v Colthrop Board Mill Ltd, which was decided by this Court on 31st January 2002. There, the appellant was fined a total of £350,000 for breaches of the Act which led to a worker being caught up in a machine and suffering serious injury. This Court reduced the fines to a total of £200,000. Paragraphs 23, 24 and 27 of the judgment are relevant to this appeal. They read as follows:

"23. In the Friskies case it was said in the course of the judgment that normally financial penalties in excess of £500,000 were reserved for cases of major public disasters. Mr Matthews, counsel for the respondent in this case, has urged that we give some reconsideration or clarification of what is meant by that. We do not find it necessary to do so for the purposes of deciding this appeal. What is important is that companies in the position of this appellant can expect to receive financial penalties on a scale up to at least half a million pounds for serious defaults and proportionately lesser sums if the limitation upon means or some other lesser blame justifies it.

24. In the case of Friskies, the court was dealing with a very substantial business. An employee was fatally electrocuted. There was no system in place to alert technicians to the inherent risks. The court decided that the fine originally imposed of £600,000 after a plea of guilty could properly be reduced to £250,000. We do not find it helpful to enter into a minute analysis of the facts of this case in comparison with other cases such as Friskies, but we do remark that there was here not a fatality but a serious injury. We note that the company, though of substantial means and capable of paying a heavy fine, was of lesser size than the company in the Friskies case and indeed certain other companies in other decisions which have been referred to in the course of this hearing.

...

27. However, that still leads to the question posed under the third submission made by Mr Mullen as to whether still £350,000 is out of scale. It appears from the authorities that financial penalties of up to around half a million pounds are appropriate for cases which result in the death even of a single employee, and perhaps of the serious injury of such a single employee. We would not wish the sum of £500,000 to appear to be set in stone or to provide any sort of maximum limit for such cases. On the contrary, we anticipate that as time goes on and awareness of the importance of safety increases, that courts will uphold sums of that amount and even in excess of them in serious cases, whether or not they involve what could be described as major public disasters."

17. It was agreed between the prosecution, the learned judge and the defence that the judge should fix an overall financial penalty in fines and costs as if a single defendant company were involved and then apportion the fine and cost's elements between the companies. What we have to decide is whether the total fine of £350,000 was manifestly excessive in all the circumstances.
18. Looking at the facts of this case, we say at once that we regard it as a very bad case. We find it extraordinary that Mr Ericsson and Mr Mayes could have been allowed into the oven when it had been cooling for just two hours. We find it equally extraordinary that no one checked the temperature gauges before the men entered the oven. As the report of the independent investigator commissioned by the Health & Safety Executive stated, there was no detailed planning. The job was not thought through. No risk assessment was undertaken. Had there been, it would have been realised that the men would be trapped in the oven for the time it took the conveyor to pass through the oven. No reference was made by anyone to Safety Memorandum No 56, produced by the Safety Committee of the Federation of Bakeries which deals with entry to ovens like the one in question for inspection purposes. The report concluded that the oven should have been switched off, gas and steam isolated and cooling fans set up. A permit to work should have been drafted and only signed once the temperature in the oven was safe and the precautions set out in Safety Memorandum No 56 had been complied with. A safe temperature for the job would have been 40 degrees centigrade. The oven should have been switched off for twelve hours.
19. Turning to the general health and safety background, Fresha Bakeries was brought by the William Price Group in 1996. The company was in a run-down state and Mr Bridson, the Chief Executive, set about improving health and safety matters. However, what was done fell far short of the mark. An improvement notice was served in the early part of 1997 in respect of the Leicester plant, and a few months later, in August 1997, there was an accident involving a flour silo at the Leicester site which could have been fatal. The overall attitude to safety is exemplified by the fact that the last meeting of the Safety Committee at the Leicester plant before the accident was in October of the previous year.
20. The Crown has identified five principal aggravating features. These are:

(1) the system devised before, and in position on 16th May 1998, fell far below a reasonably safe system of work. Death or really serious bodily harm was inevitable;

(2) the loss of two lives;

(3) no risk assessment; an assessment would have revealed the very many inadequacies which were built into the system proposed;

(4) lack of appropriate training, planning, monitoring and supervision at all levels;

(5) health and safety not given sufficiently high priority.

21. We agree that these are indeed aggravating features.
22. Mr Treacy QC put before us the latest accounts of the appellant companies and of their immediate parent; but these reflected the fines and costs the subject of the appeal. It was not disputed, either at the time of sentencing or before this Court, that the appellants were financially able to pay a significant fine. The material before the judge showed that Fresha Bakeries' pre-tax profit for the year ended 29th December 2000 was around £250,000 and the corresponding figure for Harvestime was around £400,000. The judge was also shown, we are told, some management accounts, which showed that the companies' performance was falling off somewhat. Suffice it to say that we are wholly unpersuaded that the fines should be reduced because of their impact on the appellants' finances.
23. We have taken into account all the other matters which have been urged on us by Mr Treacy QC. However, we can see no basis for holding that fines totalling £350,000 were manifestly excessive in the circumstances of this case.
24. We turn then to the question of costs. Section 18(1) of the Prosecution of Offences Act 1985 conferred on the judge a discretion to order such costs to be paid by the accused to the prosecutor as the court considers just and reasonable. At the time Fresha Bakeries and Harvestime tendered their guilty pleas the costs incurred by the prosecution were said to amount to £118,881. (This Court has been told that in fact that figure was overstated and that the true figure at that point was £108,451.)By the time all of the defendants were sentenced, during which period Mr Bridson and Mr Jones maintained their not guilty pleas until 11th June 2001, the costs had risen to a sum, represented to the judge to be £347,207, but which we are told, was in fact £283,307. The learned judge ordered Fresha Bakeries and Harvestime to pay costs in the sum of £250,000. He held that the authority of R v Ronson and Parnes (1992) 13 Cr App R (S) 153 was distinguishable and that the liability of the companies as to costs ran up to and included sentence, albeit that some reduction had been made to reflect the work involved in relation to other defendants. In coming to this view, he noted that the basis of the company's guilty plea was finally agreed only about seven days before sentence was passed.
25. Mr Treacy QC has argued before us that we should take account of the fact that the figures that were put before the learned judge were overstated. The total true costs figure is £283,307, not £347,207. Mr Treacy QC says that, taking into account the restated figures, his clients ought in any event to have a 20% reduction in respect of the costs orders that were made against them.
26. Mr Treacy QC also submitted that the judge erred in taking the approach that he did. He contended that the judge should have followed and applied Ronson and Parnes and should not have awarded costs which were incurred in respect of the proceedings against Mr Bridson and Mr Jones.
27. In Ronson and Parnes there were three defendants who could afford to pay costs and one who could not. The judge ordered each of the defendants who had the means to do so to pay one-third of the total costs. This Court set aside that order, holding that the general approach in such a case should be to order a defendant to pay those costs which would have been incurred if he had been tried alone. In speaking in terms of a general approach, the Court was recognising that there may be circumstances which justify a different approach, so long as the costs awarded are nonetheless just and equitable.
28. This is clear from the subsequent case of R v Harrison (1993) 14 Cr App R (S) 419. There, the appellant pleaded guilty to supplying motor vehicles with a false trade description. He was the proprietor of a car centre at which his sons were employed. A number of cars whose odometer readings had been falsified were sold. The appellant was sentenced to four months' imprisonment suspended for two years and ordered to pay £1,525 compensation and £2,400 costs. One of his sons pleaded guilty to four offences and was sentenced to 28 days' imprisonment suspended, with no order to pay costs. The appellant appealed the costs order, arguing that it was contrary to the principle established in Ronson and Parnes. In giving the judgment of this Court, Pill J said this:

"We accept that where there are several defendants it will usually be appropriate when making an order for costs to look to see what would be a reasonable estimate of the costs if each defendant was tried alone. However, we do not read the judgment of the Court in Ronson and Parnes as laying down a test which must be applied in all cases or in seeking to limit the discretion given to the Crown Court by the statute. Ronson and Parnes was a very different case. It involved very large sums of money by way of costs. The principal defendant could not make a contribution to those costs.

In this case the appellant was the principal offender before the court. He was the proprietor of the business. He stood to gain financially from the offences. He had the means to pay a sum which, in the context of a car business, was a moderate sum. The co-defendant, his son, had very little to do with the actual running of the business.

In the exercise of his discretion, the learned judge considered that it was just and reasonable that the appellant should bear the full costs of the prosecution. We see no reason to interfere with that exercise of discretion which, in the view of this Court was a proper one."

29. It follows, in our judgment, that if the sentencing court concludes that any particular defendant amongst a number of defendants is more responsible than the others for the criminal conduct which has led to their conviction then it may be appropriate to order that defendant to pay a greater share of the costs than he would have had to pay if he had been tried alone. We are of the opinion that the learned judge was entitled to conclude that the corporate defendants bore a greater responsibility than the individual defendants for the overall breaches of the act which led to the prosecution of them all. However, we think that the judge took too little account of the fact that the companies had no control over the proceedings brought against Mr Bridson and Mr Jones, and if those defendants had pleaded guilty when the companies tendered their pleas the costs would have been significantly less.
30. In our judgment, weighing up the degree of responsibility which can be set at the company's door, and having regard to the costs incurred after the company's pleas of guilty, and taking account of the revised figures of the costs that have been put before us, we think that the appropriate total of costs to be ordered is £150,000, £105,000 of which should be paid by Fresha Bakeries and £45,000 should be paid by Harvestime. We are unpersuaded that the fines and costs, now totalling £500,000, would have such a financial impact on the appellants that a lower total figure should be imposed.
31. We accordingly set aside the costs orders imposed by the learned judge and substitute in their place orders that Fresha Bakeries pay costs in the sum of £105,000 and Harvestime pay costs in the sum of £45,000. To that extent this appeal is allowed.

MR TREACY: My Lord, may I just deal with subsequent matters very briefly? The position is that the matter came back before the judge as far as payment is concerned; and we have paid £300,000 in accordance with the judge's order. The balance was expressed to be payable at 28 days after the conclusion of this appeal.

LORD JUSTICE MANTELL: That is £300,000 towards the total figure?

MR TREACY: Yes, we did not differentiate as to whether it was costs or fines. As a result of your order there will be £200,000 to pay. I am going to invite you to consider saying that we may have six months to pay that money.

LORD JUSTICE MANTELL: The judge had given you how much time?

MR TREACY: He had given us 28 days after the disposal of any appeal to pay whatever balance was outstanding as a result of the appeal.

RECORDER OF BIRMINGHAM: And the date of that order of the learned judge?

MR TREACY: 7th August, I think.

RECORDER OF BIRMINGHAM: 2001, so it is about ten months.

MR TREACY: Yes, it is.

LORD JUSTICE MANTELL: What do you say, Mr Barker, about time to pay?

MR BARKER: My Lord, to a certain extent it depends on the financial situation of the company. We are not in a position to give your Lordship any assistance, apart from to say that Mr Jones told our accountant that they had the ability to pay.

LORD JUSTICE MANTELL: Why can you not pay it within a shorter time?

MR TREACY: The company's position has deteriorated and it is a substantial sum of money to find. If your Lordship orders that it should be paid more promptly than that then that will be paid. But I was seeking a means of easing the burden on the company by extending the period over which the money may be paid.

LORD JUSTICE MANTELL: The burden has been considerably eased as a result of your efforts this morning, Mr Treacy.

MR TREACY: My Lord, that is my application. It will be a matter for your Lordship to consider what is appropriate. It may be your Lordships would say a middle course of, perhaps, three months rather than the six I have asked for to pay the sum of £200,000 would be fair.

LORD JUSTICE MANTELL: Perhaps we should not, but we rather assume that when you asked for six months you mean three, or you will settle for three.

MR TREACY: No. No, I sought to ask your Lordships -- or what I divine to be the attitude of the Court and sought to achieve something.

LORD JUSTICE MANTELL: We are now down to one-and-a-half, are we not?

MR TREACY: No, we are not. I am sticking at three

(The Bench conferred.)

LORD JUSTICE MANTELL: Two months.

MR TREACY: Thank you very much.