Sentencing Large Corporations for Health and Safety Offences – An Analysis HSE v Cristal Pigments UK Limited

24/01/2017

In November 2016, the Hull Crown Court handed down a fine of £3 million to Cristal Pigment UK Ltd, a global chemical company, for health & safety breaches that resulted in the death of an employee.

The case offers an opportunity to analyse how UK judges are approaching the sentencing of large corporations found guilty of breaching health & safety regulations.

The facts of the health and safety breach

In the early hours of 5th March 2010, at the company’s factory in Stallingborough, north-east Lincolnshire, there was a build-up of titanium tetrachloride (a chemical used in the manufacture of titanium oxide), which mixed with water lead to an explosion of a tank. On contact with air, a large toxic gas cloud was released.

One of the worker’s in the plant at the time was showered in corrosive gasses and died in hospital.  Another worker, who was enveloped in the vapour cloud survived, but sustained irreversible lung damage. 

The vapour cloud then left the site and floated over the Humber river, closing shipping lanes for a time before it was brought under control.  A Russian commercial vessel came into close proximity to the cloud but no one was injured.

The company then suffered another incidence of a vapour cloud escaping in 2011.

Cristal Pigment UK Ltd, part of the Cristal Group, is an international producer of titanium chemicals, one of which, Titanium Dioxide, is widely used in industry due to it’s low cost.  In July 2016, The European Chemicals Agency outlined a proposal to classify Titanium Dioxide as a respiratory carcinogen, a move that is not welcomed by the chemical industry.

The investigation by the Health & Safety Executive (HSE)

An investigation by the HSE found that a clear, robust risk management plan was not in place at the time of the accident and the company had not followed proper operating procedures, leading to gasses building up to a dangerous level.

It was also revealed that part of the plant was badly designed.

The company pleaded guilty in the Magistrates’ Court to section 2 and 3 offences under the Health and Safety at Work etc Act 1974 in respect of the 2010 incident, and a Control of Major Accident Hazards Regulations 1999 offence in respect to the 2011 incident.  The court subsequently fined the organisation £3 million.

So far, all cases of a similar nature have been sentenced within the “very large company” bracket set down in the Guidelines (where annual turnover exceeds £50 million).  

Because the fines issued since 1^st February 2016, when the Guidelines came into force, have been far in excess of what were handed down beforehand, the judiciary appear reluctant to move outside this parameter and follow the principle set out within the Guidelines which states; 

“Where an offending organisation’s turnover or equivalent very greatly exceeds the threshold for large organisations, it may be necessary to move outside the suggested range to achieve a proportionate sentence.”

However, it may only be a matter of time before a company who has a far greater turnover than £50 million finds itself before a judge following a health & safety breach facing a massive fine, such as those handed down by the American courts.  And unfortunately, the judge in question, not matter how learned, may not have the perception to look ‘behind the books’ to see if the company is truly in a position to finance a penalty that may run into the tens, if not hundreds of millions of pounds.

Be Prepared...

All companies should therefore be on notice that investing in robust health & safety compliance and ensuring risk management policies are up-to-date and communicated throughout the organisation has never been more important.  This is not only to ensure the safety of people and property, but to avoid being the first case where a judge presiding over a health & safety case elects to ‘move outside the suggested range’.