Ineos Chlorvinyls Ltd, R v

A failure to ensure that critical equipment is registered, inspected and maintained may properly be categorised as negligent where reasonable inspection could have revealed a defect. The isolated nature of the failure, absence of cost-cutting and a good compliance record may reduce its seriousness, but do not preclude that categorisation.

When applying a sentencing guideline to a large organisation, the court may impose a fine outside the suggested range where turnover greatly exceeds the relevant threshold and this is necessary to achieve a proportionate sentence. It may consider resources available from linked organisations when assessing the offender’s means.

The appellant company pleaded guilty in the North Cheshire Magistrates’ Court to unlawfully causing or knowingly permitting a water discharge activity contrary to the Environment Permitting (England and Wales) Regulations 2010. A defective filter used to transfer caustic soda failed, allowing some chemical to enter the Manchester Ship Canal. The environmental impact was localised and temporary.

The case was committed for sentence to the Crown Court at Chester. The judge imposed a fine of £166,650 and ordered costs of £28,811.78. The company appealed, contending that culpability had been wrongly categorised as negligent, that insufficient weight had been given to the low level of negligence and mitigation, and that the fine was disproportionate.

The central issue was whether the fine was manifestly excessive under the Definitive Guideline.

1. The appeal against sentence was dismissed. The court allowed the appeal only to correct the agreed error in costs. It quashed the order for £28,811.78 and substituted costs of £27,311.
2. The Crown Court was entitled to classify the appellant’s culpability as negligent. The filter was neither registered nor inspected when purchased. It was an important item through which dangerous substances passed at high pressure, and it had been used for several years. Reasonable inspection could have detected the defect. The judge was therefore entitled to find a failure to enforce a proper system for avoiding the offence, despite the defect’s latent character and the absence of any systemic management failure.
3. The sentencing judge was entitled to depart above the guideline range applicable to a large organisation. The appellant’s turnover greatly exceeded the guideline threshold. The court could also take account of financial resources available from its linked parent company. Its accounting losses did not make that approach inappropriate.
4. The court accepted the mitigation, including the isolated event, the absence of commercial motivation, the company’s good record, its voluntary report and co-operation, and the guilty plea. Those matters had been reflected in the judge’s assessment and one-third reduction. The resulting fine was not excessive, let alone manifestly excessive. A fine of this level was a mere pinprick in the company’s finances and was proportionate.

• Court of Appeal (Criminal Division) — In [2016] EWCA Crim 607, dismissed the appeal against the fine but substituted corrected costs of £27,311 by agreement.
• Crown Court at Chester — On 12 June 2015, imposed a fine of £166,650 and costs following committal for sentence.
• North Cheshire Magistrates’ Court — On 18 June 2014, the company pleaded guilty and was committed to the Crown Court for sentence.