Tata Steel UK Ltd, R v

In sentencing a very large organisation for health and safety offences, culpability and the likelihood of harm must be assessed separately. A previous incident may establish high culpability without making the occurrence of harm highly likely.

The Sentencing Guideline is not to be applied mechanically. A court may move outside the range for a large organisation to achieve a proportionate fine with real economic impact. It must nevertheless consider financial circumstances in the round. A loss-making offender may justify a reduction, but available and essential parent-company support may exceptionally be taken into account as part of the economic reality.

Tata Steel UK Ltd pleaded guilty to two breaches of health and safety duties after separate machinery incidents at its Corby site caused employees serious finger injuries. The incidents occurred five months apart, with an Improvement Notice having been served after the first.

At the Crown Court at Northampton, His Honour Judge Mayo imposed consecutive fines of £185,000 and £1.8 million. Tata appealed against sentence. The principal issues were the likelihood-of-harm category for the second offence, departure from the Guideline range for a very large organisation, the relevance of Tata’s losses and parent-company support, and totality.

1. The appeal was allowed in part. The fine for the second offence was quashed and replaced with a fine of £1.315 million. The £185,000 fine for the first offence stood. The consecutive total was therefore reduced to £1.5 million.

2. The judge erred by treating the second offence as presenting a high likelihood of harm. The earlier incident was relevant to high culpability, but it had occurred about 15 years earlier. The machine had also operated for about 150,000 man-hours without incident, and the circumstances of the injury were unusual. The correct classification was a medium likelihood of Level B harm.

3. The judge was entitled to move outside the Guideline range because the offender’s turnover made it a very large organisation. The Guideline was not to be construed or applied mechanically. A higher starting point could be necessary to secure a proportionate fine with real economic impact and to bring compliance home to management and shareholders, consistently with R v Thames Water [2015] EWCA Crim 960.

4. The court rejected the alleged double counting and held that the judge was entitled not to reduce the fine for mitigation. The judge had recognised Tata’s efforts to respond to the Improvement Notice but could regard them as insufficient.

5. Under section 164 of the Criminal Justice Act 2003, financial circumstances required consideration. Losses may warrant a reduction. Here, however, parent-company support was essential to Tata’s continuing operation and could exceptionally be considered as part of the economic reality. There was no evidence that the fine would put Tata out of business.

6. For the first offence, the resulting £185,000 fine was not manifestly excessive. Its precise route of calculation did not justify appellate intervention.

• Court of Appeal (Criminal Division) — allowed the appeal against the fine for offence 2 and substituted £1.315 million; dismissed the appeal against the £185,000 fine for offence 1: [2017] EWCA Crim 704.
• Crown Court at Northampton — His Honour Judge Mayo imposed consecutive fines of £185,000 and £1.8 million following guilty pleas.