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The importance of compliance after Buncefield
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There doesn't have to be a fatal accident for a large fine to be imposed on an organisation for breaches of duty relating to health, safety and environmental law.
In R v Total (UK) Limited and others , the Crown Court left the five companies involved with fines totalling more than Buncefield Oil Storage Depot.
Facts
On 11 December 2005, an industrial petrol storage tank operated by Hertfordshire Oil Storage Ltd (HOSL) started to overflow. This was in part due to a failure of two critical safety systems: an internal fuel levels gauge and the independent cut off switch. More than 250,000 litres of petrol spilled out of the tank and formed a highly flammable vapour cloud. The cloud of vapour was ignited by a spark from the fire protection system. Special barriers designed to prevent run off of fuel and fire-fighting chemicals also failed, leading to significant pollution to the surrounding area and the groundwater under the site.
The resulting explosion injured 43 people and destroyed nearby businesses. According to the judge, the fact that no one on the site or in the surrounding area lost their lives was miraculous. Had the explosion happened during a working day when large numbers of people would have been at premises close to the site the loss of life may have been measured in tens or even hundreds. The environmental impacts of the disaster are still evident today.
Prosecution
Total UK Ltd (Total), British Pipeline Agency Ltd (BPA), HOSL, TAV Engineering Ltd (TAV) and Motherwell Control Systems 2003 Ltd (Motherwell) were successfully prosecuted by the Health and Safety Executive and Environment Agency. The investigation by the prosecuting bodies uncovered a series of serious failings by each of the companies.
Click here for table.
Sentencing
The judge's approach to sentencing is likely to be of significant interest to organisations.
In addition to the fines imposed, the judge stated that the companies had shown " These remarks are likely to generate a significant degree of adverse publicity and cause reputational damage to the companies involved. Indeed, the local MP intends to ask the Attorney General whether the penalty was too lenient and describes the fines as an insult to his constituents.
The judge then went on to address the question of the severity of the sentence that should be imposed stating that, where possible in these serious cases, the levels of fines and costs should not cripple the defendant and put employees out of work, but be sufficient to demonstrate to the companies concerned and their shareholders' public displeasure of their conduct. He then proceeded to take into account the following principles to determine the level of sentence that should be imposed:
The severest penalties should be reserved for major public disasters
While there can be no precise correlation between the size of the penalty and the size of the company, the penalty in such cases should be substantial enough to bring the necessary deterrent message home to those who manage the company and also its shareholders
The judge took into account the Court of Appeal's decision in New Look Retailers Ltd v London Fire & Emergency Planning Authority relating to a fine of New Look following a fire at its store on Oxford Street (which did not cause injury or death) for breaches of the Regulatory Reform (Fire Safety) Order 2005. In that case, the Court of Appeal stated that the court does not have to wait until death or injury has occurred to express its displeasure at wholesale breaches of an organisation's responsibilities under the law.
He also looked at possible aggravating features which would impact upon the level of the sentence in this case and asked the following questions that are likely to be asked of any organisation when facing sentence:
Was the breach or were the breaches isolated or systematic?
How far short of an acceptable standard did the defendant fall?
How widespread within the organisation was this breach?
How far up the organisation did the breaches go?
Was there an element of cost-cutting at the expense of safety?
Was there a failure to respond appropriately to near misses?
Was there a prompt acceptance of responsibility?
Was there a high level of co-operation with the investigation, beyond that which will always be expected?
Did the companies have a good safety record?
Did the companies have a responsible attitude to health and safety such as the commissioning of expert advice or the consultation of employees or others affected by the organisation's activities?
As well as looking at aggravating features, the court will also take into account mitigating factors which may impact on reducing the severity of the sentence. In this case, for example, the judge noted that:
Uninsured claims were prioritised and most were paid by July 2006
Improvements have been brought about since the accident to ensure there is no repeat
Total had shown genuine remorse and had tried to encourage the rebirth of business in the area. The managing director was at court to mark the company's appreciation of the seriousness of the offence
The Community Trust Fund received March 2007
BPA had an excellent safety record which had been recognised by many awards. It had also been entirely open and cooperative with the investigation. The remedial work of skimming contaminants and removing contaminated soil was immediate and comprehensive.
To demonstrate the importance of mitigation, the judge discounted Total's fine by 40% to reflect its early guilty plea and other mitigation whilst BPA's fine was discounted by 50% to reflect its guilty plea and exceptional mitigation.
Additional information:
Becta Schools Leadership and management Health and safety
Shovels at the ready! Residents defy 'crazy' health and safety
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Renfrewshire Community Website Health and Safety Advice
National Galleries of Scotland Education Health Safety
Business
Occupational health safety advice and requirements for
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Boss Federation Membership Services Health Safety Advice
Travel Health Online
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