Balfour Beatty Rail Infrastructure Services Ltd, R. v

For a corporate offence under section 3 of the Health and Safety at Work Act 1974, a fine must reflect the offender’s fault, the consequences of the breach, its resources, punishment and deterrence. A systemic failure in management or safety procedures which exposes the public to grave risk warrants a substantially greater penalty than isolated employee negligence. Comparisons with fines in other cases rarely provide a useful benchmark. A marked disparity between co-defendants’ sentences justifies appellate intervention only where an informed, right-thinking observer would conclude that something had gone wrong in the administration of justice. Proportionality may justify a reduction, but not one that undermines the gravity of the offence or the deterrent purpose of sentence. No credit need be given for a guilty plea delayed for tactical reasons.

Balfour Beatty Rail Infrastructure Services Ltd pleaded guilty, on the 93rd day of a trial arising from the Hatfield rail disaster, to failing to discharge its duty to persons not in its employment under section 3(1) of the Health and Safety at Work Act 1974. Its failures in visual and ultrasonic inspection of the track were a cause of the derailment, in which four passengers died and 102 were injured.

Mackay J, in the Central Criminal Court, imposed a fine of £10 million and ordered £300,000 prosecution costs: [2005] EWHC 248 QB. Railtrack was later convicted of a related section 3 offence and fined £3.5 million. Balfour Beatty appealed the amount of its fine, challenging the assessment of culpability, the disparity between the corporate fines, the overall level of sentence, and the refusal of credit for its late guilty plea.

1. Appeal allowed in part. The £10 million fine was quashed and replaced with a fine of £7.5 million. The court otherwise rejected the challenges to the judge’s assessment of culpability and to the refusal of credit for the guilty plea.

2. The judge was entitled to treat Balfour Beatty’s failures as a grave and sustained systemic failure. It had undertaken a vital safety function for high-speed rail travel, but visual inspections were futile and ultrasonic results were not assessed by competent personnel. The breach had persisted from at least January 1999. The progressive deterioration of the rail did not confine culpability to the final months before the derailment.

3. The court endorsed the established sentencing guidance for health and safety offences. Section 3 of the Health and Safety at Work Act 1974 requires positive steps to minimise risk to employees and third parties. A fine must reflect fault and consequences, and should punish and deter corporate safety failures by bringing their seriousness home to management and shareholders. A systemic failure attributable to management may justify a fine an order of magnitude greater than one arising from an individual employee’s negligence. Comparison with fines in other cases was unhelpful on these facts.

4. The disparity between Balfour Beatty’s £10 million fine and Railtrack’s £3.5 million fine was sufficiently great to satisfy the test approved in R v Fawcett 5 Cr App R (S) 158: an informed, right-thinking member of the public would consider that something had gone wrong in the administration of justice. The judge could properly have taken account of Railtrack’s knowledge that replacement rail was required but had not been installed. Full parity would have produced an unduly low fine, but a reduction to £7.5 million restored sufficient proportionality while preserving the punitive and deterrent objectives.

5. No reduction was required for the plea. The outstanding manslaughter counts did not prevent an earlier plea to the section 3 offence. The company had maintained a not guilty case for tactical reasons, and the trial judge was entitled to give no credit for a plea entered after 93 days of trial.

• Court of Appeal (Criminal Division): Allowed the sentencing appeal in part and substituted a £7.5 million fine for the £10 million fine.
• Central Criminal Court (Mackay J): After Balfour Beatty pleaded guilty to a section 3(1) offence under the Health and Safety at Work Act 1974, imposed a £10 million fine and ordered £300,000 prosecution costs: [2005] EWHC 248 QB.