Sellafield Ltd, R v

A corporate fine for health, safety or environmental offending must reflect the statutory purposes of sentencing, the seriousness of the offence and the offender’s financial circumstances. Seriousness depends on culpability and actual or foreseeable harm. Turnover exceeding £1 billion does not alter that basic approach, but requires careful examination of the company’s structure, profitability and governance.

There is no financial ceiling reserved for disasters or fatalities. A fine must be sufficiently substantial to bring the offending home to those responsible for the company. Where profits are reinvested for public benefit, the court must consider the indirect public effect of a fine. It may nevertheless impose a substantial fine to deter offending, promote reform and protect the public.

Two appeals against sentence were heard together. Sellafield Ltd pleaded guilty to seven offences concerning failures in systems for identifying and disposing of radioactive waste. The Crown Court imposed total fines of £700,000.

Network Rail Infrastructure Ltd pleaded guilty to an offence under section 3(1) of the Health and Safety at Work Act 1974. Its inadequate assessment of an unmanned level crossing left an obvious risk unaddressed. A collision caused life-changing injuries to a child. The Crown Court imposed a fine of £500,000.

Both companies contended that their fines were manifestly excessive. The common issue was the proper level of corporate fines for very large companies which breached safety or environmental-protection legislation.

1. Both appeals were dismissed. The court applied sections 142, 143 and 164 of the Criminal Justice Act 2003. A sentencing court must assess culpability and actual or foreseeable harm, then consider the offender’s financial circumstances when fixing a fine. The statutory purposes include punishment, deterrence, reform, public protection and reparation.

2. The size of a company does not create a separate sentencing regime. It does, however, require detailed consideration of its turnover, profitability, corporate structure and the persons who can hold its directors to account. There is no rule that a fine of £1 million or more is appropriate only for a disaster, a fatality or corporate manslaughter. The fine must be sufficient to make the seriousness of the offending real to those responsible for the company.

3. For Sellafield Ltd, the failures were systemic, readily avoidable and extended to management. The court upheld the finding of medium culpability. There was effectively no actual harm and only a very low foreseeable risk of harm, but previous offending, the nature of nuclear safety and the company’s substantial income and profit justified the £700,000 fine. Its early guilty pleas and extensive co-operation had received substantial credit.

4. For Network Rail, the actual harm was grave and greater harm was foreseeable. Serious and persistent operational failures had left an obvious risk at the crossing unremedied. Its status as a not-for-dividend company meant that a fine could reduce investment in public infrastructure rather than directly punish shareholders. That was a material factor, but not a reason to withhold a substantial fine. A fine could still deter offending, encourage reform and bring safety responsibilities home to directors and members. The £500,000 fine was already generous in light of mitigation.

5. The court further directed that company accounts and relevant corporate-structure information should be supplied well before sentence, so that the court and the prosecution can assess the financial circumstances and the most effective means of achieving the statutory purposes.

• Court of Appeal (Criminal Division) Dismissed both appeals against sentence: [2014] EWCA Crim 49.
• Crown Court Imposed a £700,000 total fine on Sellafield Ltd for seven radioactive-waste offences, and a £500,000 fine on Network Rail Infrastructure Ltd for a health and safety offence.
• Magistrates’ Courts Each company pleaded guilty before the relevant magistrates’ court, which committed the case to the Crown Court for sentence because its own fining powers were insufficient.