AGC Automotive (UK) Ltd, R. v

MR JUSTICE UNDERHILL: The appellant is a company which assembles and supplies windscreens and other glass products for the automotive industry. It has premises on an industrial estate in Northampton. Following an accident at its premises on 8th September 2006 when a visiting contractor was hit by a fork-lift truck, it was prosecuted by the Health and Safety Executive on a single count of breach of its duty under section 3(1) of the Health and Safety at Work Act 1974 - that is, a duty to conduct its undertaking in such a way to ensure, so far as reasonably practicable, that persons not in its employment were not exposed to risks to their safety whilst working at the premises. The magistrates decided to commit the case for trial to the Crown Court. The company pleaded guilty promptly on receipt of the committal papers, being the first indication which it had been given of the detailed case against it. The matter came before His Honour Judge Alexander QC for sentence in the Northampton Crown Court on 11th September 2007. He imposed a fine of £150,000 and ordered the company to pay costs totalling £9,460. The company appeals against the amounts both of the fine and the order for costs.

The way that the accident happened and the nature of the breach that gave rise to it can be summarised as follows.

The company's business requires the storage of parts on stillages, which are moved around, as required, by fork-lift trucks. Normally the stillages are kept in a warehouse or similar unit. At the time of the accident, however, there was a shortage of space on the site because of the closure of one of the company's plants. In consequence, only a day or two prior to the accident unused stillages had been stacked on a temporary basis in a canopied area alongside a unit known as Unit B. It was envisaged that this arrangement would last only a couple of weeks.

It is a cardinal safety principle in any workplace where vehicles such as fork-lift trucks are used that marked and dedicated walkways should be provided for any pedestrians who have to cross the floor of the workplace, and that a system of working should be designed and operated whereby the vehicles never need to cross those walkways. Such a system was in principle operated at the company's site, and compliance procedures had indeed been improved only a couple of months previously in response to a notice served by the Executive. But when the stillages were moved into the area alongside Unit B no thought was given to ensuring that full segregation between pedestrians and vehicles was preserved. There was in fact regular pedestrian traffic from the car park over the area in question to a door leading into the Unit B, and the area which pedestrians were supposed to walk on was delineated by a yellow line marking off one edge of the area. What happened was that the stillages were stacked so as largely to cover the marked off area and, more specifically, in such a way that in order to access the stillages fork-lift trucks had to cross what was left of the pedestrian route.

The victim of the accident, Mr Williams, was an information technology consultant who visited the premises regularly. At about 11.30 am on the day in question he arrived by car. As a matter of procedure, which he was aware of from previous visits, he should have reported first to the reception. This would not have taken him past Unit B. Instead, however, when he got out of his car he decided to enter Unit B directly. This took him through the area where the stillages had now been stacked. As he walked through that area he was hit by a reversing fork-lift truck which was engaged in tidying up the stillages. He suffered a serious fracture of his left leg which has required major surgery and the installation of a metal pin.

As we have mentioned, Mr Williams ought as a matter of procedure have on arrival gone first to the reception. He had done so on the previous day and been given an information card which he was supposed to carry with him, described as "AGC Visitor Guidelines". Guideline 1 states in terms: "when in the manufacturing areas always keep to the walkways and be aware of fork-lift truck movements". If Mr Williams had signed in at the reception at the start of his visit, he would also have been issued with a high-visibility jacket. The evidence in fact also was that he would on this particular day have been given an explicit reminder of the importance of not straying from the marked walkways. This is because he had been spotted doing so during his visit on the previous day and the responsible manager intended to raise the point with him: he had indeed already taken the opportunity to give such a reminder to other contractors who had come in earlier in the day. Because Mr Williams bypassed the reception area none of that occurred.

The judge detected in the company's submissions in mitigation an implied criticism of Mr Williams for failing to report to reception and not keeping a proper look-out. But, as he correctly observed, whether Mr Williams was to any degree at fault is of limited significance for the purpose of the issue before us. The gist of the offence is the operation of an unsafe system on the day in question; and the situation created by the stacking of stillages outside Unit B, without a system enforcing segregation between vehicles and pedestrians, was plainly unsafe, whatever fault there may or may not have been on the part of Mr Williams. These points are material only because they may have some value in mitigation, in as much as they show that the company's system did attempt to remind visitors of the risk from fork-lift trucks.

The company plea of guilty was on a written basis. In accordance with the procedure recommended in R v Friskies Pet Care Ltd [2000] 2 Cr App R(S) 401, or at least a modified form of that procedure, that basis of plea also set out the aggravating and mitigating features in the case. This was put before the court as an agreed document, though counsel for the Executive and for the company reserved the right to comment on it by way of amplification. The document reads as follows:

That stated basis fairly and accurately identifies the nature of the breach disclosed by the evidence but we need to say a little more about some particular points.

As regards the aggravating features, the fact of the injury to Mr Williams speaks for itself. As to the second item, the letter referred to is the improvement notice to which we have already referred. This required the company to take steps to improve the segregation arrangements which were already in place. The covering letter told the company that the notice was being issued because there was no effective assessment, control or monitoring of safe vehicle movements both inside Units B, C and 16 and outside in the yards and on the private roadway. The letter drew attention to various incidents which had prompted the issue of the notice. One in particular we should draw attention to. It was as follows:

As for the mitigating factors identified in the schedule, point 1 referred to the company's prompt response to the improvement notice to which we have already referred. There is no need for us to say any more about that. Point 2 - post-accident actions - reflects the fact that immediately after the incident effective arrangements were promptly made to create a segregated, and indeed fenced-off, pedestrian walkway through the canopied area to the door to Unit B. There was also a retraining programme undertaken. The next three items - no previous convictions, good health and safety record and co-operation with HSE - speak for themselves: the company had been operating for over 16 years. The guilty plea, again, in principle speaks for itself. However, although, as we have noted, the company did not plead guilty until it had received the committal statements, the judge was critical of the Executive for not supplying those statements at an earlier stage; and the company should be treated as having pleaded guilty at the earliest practical opportunity.

It may also be a mitigating factor that, as we have already mentioned, the company, although it had overlooked the particular risk caused by the temporary arrangements which we have described, was alert to the risk to Mr Williams from his failure to observe walkways elsewhere on the site on the previous day, and had been planning to speak to him about it before the accident occurred.

The judge in his sentencing remarks set out the facts in some detail and referred to the steps taken by the company after the accident. He then said this:

While the particular points made by the judge in that passage are entirely reasonable, and indeed spell out clearly the nature of the company's breach and the aggravating feature identified on the "Friskies schedule", Mr Kimblin, who appears before us for the company as he did before the judge, takes exception to the finding that the company was "thoroughly reckless". We think that he is entitled to do so. The term "reckless" connotes a particularly high level of culpability which we do not believe that the facts of the present case disclose. The company was of course at fault in installing the stillages without giving thought to the need for segregation, and that fault was aggravated in the ways that the judge referred to. But we nevertheless do not believe that carelessness of that character deserves the description "reckless".

Having made that finding, the judge went on to consider what level of fine was appropriate "to reflect what I indicated to be a reckless disregard of the company's duties". He observed that he had been referred to a number of authorities but that they gave little helpful guidance. He then said:

Mr Kimblin submits, first, that the fine was manifestly excessive, having regard to the level of penalties commonly awarded for cases of this kind; secondly, that the finding of recklessness was unjustified; and thirdly, that the judge had failed to follow the guidance given by this Court in R v F Howe and Sons Ltd [1999] 2 Cr App R(S) 37 as to the factors to be taken into account in setting the level of fine in cases of this kind, and in particular that he had given little or no weight to the mitigating circumstances identified in the schedule, all of which are referred to in Howe .

We do not think it is necessary to address each of Mr Kimblin's submissions separately. To a considerable extent they are interdependent. We have already made clear our view that the judge overstated the level of culpability shown on the facts here. There was a serious failure of risk assessment and planning, aggravated by the factors identified in the schedule; but this was not a case meriting a penalty at or near the top of the observable in the authorities scale. This was a one-off failure to build into temporary arrangements safety procedures which were properly observed in the company's normal arrangements. There is no suggestion here of a culture of disregarding health and safety or of ignoring safety procedures in order to cut costs.

As to what the normal scale of penalties is, it is right that this Court has consistently declined to set any kind of tariff because of the very wide variety of circumstances attending prosecutions of this kind. Nevertheless, levels of fine should not be wholly arbitrary, and it is possible by looking at a range of recent cases in this Court (to which we were helpfully referred) to get a broad feel for the levels of fine imposed in cases of different levels of gravity. It is important in doing so to bear in mind that in some cases the court would be influenced by considerations of affordability or means, particularly where the defendant is a small business or is in the public sector. There are no such considerations here, since the company put no material before the judge about its profitability or its assets. But, even bearing that caveat in mind, it seems to us that a fine of £150,000 - all the more so in a case where the company has pleaded guilty at the earliest opportunity - is quite disproportionate to the level of culpability in this case, including in that assessment both the aggravating and the mitigating circumstances. In our view, the right level of fine in the present case is a fine of £60,000, and we allow the appeal to that extent.