HM Advocate v Munro & Sons (Highland) Ltd

Justiciary ç Sentence ç Appeal ç Unduly lenient
sentence ç Accused pleading guilty to health and safety
offences culminating in death of a member of the public
ç Sentencing judge selecting starting point of »5,000 ç
Whether unduly lenient.
Section 3(1) of the Health and Safety at Work etc Act
1974 provides that ‘‘[I]t shall be the duty of every
employer to conduct his undertaking in such a way as
to ensure, so far as is reasonably practicable, that
persons not in his employment who may be affected
thereby are not thereby exposed to risks to their
health or safety’’.
A haulage and waste disposal contractor pled guilty
to contraventions of ss 3(1) and 33(1) of the Health and
Safety at Work etc Act 1974. The company had been
involved in transporting a wheeled loader on a low
loaded trailer. The loader was secured by use of the
parking brake which, it transpired, had a serious
defect, and two securing chains. On an incline in the
road, the chains broke, releasing the loader which
crushed a car, injuring one of the occupants and
killing the other.The sentencing judge took a starting
point of »5,000, discounted by 25 per cent to reflect
the guilty plea and its timing, and imposed a fine of
»3,750. The Crown appealed on the basis that the
sentence was unduly lenient.
Held, that the sentence imposed was far too low and
took inadequate account of the nature of the offence
itself and the need for appropriate punishment in the
public interest: an appropriate starting point, taking
account of all the relevant circumstances, including
the foreseeability of the public’s exposure to grave
risk of death or serious injury if the loader rolled off
the trailor, the respondent’s failure to comply with its
statutory duty where the chains were inadequate and
the handbrake was defective, along with the respondent’s financial situation, would have been »40,000,
discounted by 25 per cent (paras 34-40); and a fine of
»30,000 substituted.
R v Balfour Beatty Rail Infrastructure Services Ltd
[2007] 1 Cr App R (S) 65, applied.
Indictment
Munro & Sons (Highland) Ltd was charged on an
indictment libelling inter alia that: ‘‘(2) On 5 July
2006 at the A9 Inverness to Scrabster Road at Tomich
Junction, Invergordon, Easter Ross and at premises
occupied by you at the Deephaven Industrial Estate,
Evanton, Easter Ross, you MUNRO & SONS
(HIGHLAND) LIMITED being an employer
within the meaning of the aftermentioned Act, did
fail to conduct your undertaking in such a way as to
ensure, so far as was reasonably practicable, that
persons not in your employment, namely Julia
MacKay, c / o Northern Constabulary, Dingwall,
Christina Fraser, formerly residing at Garstein,
Arabella, by Tain, and members of the public using
said road at the time, who may have been affected
thereby were not exposed to risk to their health and
safety and in particular; (a) you did cause and permit
WALTER MACLENNAN, an employee of said
company, to transport a load, namely a Michigan
L190 wheeled loader by means of a mechanically
propelled vehicle, namely an Articulated Unit and a
Low LoaderTrailer Combination, registered number
T373 KMS and did fail to provide said WALTER
MACLENNAN with sufficient and adequate load
securing equipment, in particular sufficient and
adequate chains or lashings and fastenings, fail to
ensure that the said load was sufficiently secure and
fail to ensure that the brakes of said load were
effective, in working order, and in operation; (b) you
did cause and permit said WALTER
MACLENNAN to load said mechanically propelled
vehicle with a load of 30130 kilograms, causing the
gross weight of said mechanically propelled vehicle
and load to be 48350 kilograms, being a load in
excess of its maximum permissible gross weight of
44000 kilograms shown on the plate fitted in
accordance with provisions of the Road Vehicles (Construction and Use) Regulations 1986; whereby the said
chains broke and said load broke away from said
mechanically propelled vehicle and rolled into the
path of motor vehicle registered number P678 JAS
then being driven by said Julia MacKay, whereby said
Julia MacKay was severely injured and said Christina
Fraser, a passenger in said motor vehicle being driven
by said Julia MacKay, was so severely injured that she
died: CONTRARY to the Health and Safety at Work
etc Act 1974, section 3(1) and section 33(1)(a).’’
The company pled guilty at a continued preliminary
hearing in the High Court of Justiciary sitting at
Edinburgh on 11 April 2008.
The sentencing judge imposed a fine of »3,750
discounted by 25 per cent from »5,000.
The Crown appealed.
Statutory provisions
The Health and Safety at Work etc Act 1974
provides:
‘‘3.ç (1) It shall be the duty of every employer to
conduct his undertaking in such a way as to ensure,
so far as is reasonably practicable, that persons not in
his employment who may be affected thereby are not
thereby exposed to risks to their health or safety.’’
Cases referred to
Advocate (HM) vTransco Plc, High Court of Justiciary,
25 August 2005, unreported (2005 GWD 32-
617).
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SCOTS LAW TIMES: ISSUE 09: 13-3-2009
R v Balfour Beatty Rail Infrastructure Services Ltd
[2007] 1 Cr App R (S) 65.
R v FHowe& Son (Engineers) Ltd [1999] 2 All ER 249;
[1999] 2 Cr App R (S) 37.
R v Friskies Petcare (UK) Ltd [2000] 2 Cr App R
(S) 401.
R v Jarvis Facilities Ltd [2005] EWCA Crim 1409.
Appeal
The appeal was heard before the High Court.
On 28 January 2009 the court allowed the appeal
and substituted a fine of »30,000.
The following opinion of the court was delivered by
Lord Nimmo Smith:
OPINION OF THE COURT.ç
Introduction
[1] The Health and Safety at Work etc Act 1974 (‘‘the
1974 Act’’) provides by s 3(1): [his Lordship quoted its
terms set out supra and continued:] Section
33(1) provides that it is an offence for a person (a) to
fail to discharge a duty to which he is subject by
virtue of s 3(1), among other provisions.
[2] The respondents, Munro & Sons (Highland)
Ltd (‘‘Munro’’), pled guilty at a continued preliminary
hearing in the High Court of Justiciary sitting at
Edinburgh on 11 April 2008 to charge 2 in an
indictment, which, as amended, was in the following
terms: [his Lordship quoted the terms of the
indictment set out supra and continued:] The Crown
accepted pleas of not guilty by Munro and by their
employee Walter MacLennan to the remaining
charges on the indictment.
[3] After hearing counsel, the sentencing judge
imposed a fine of »3,750 on Munro, discounted by 25
per cent from »5,000 to reflect the plea of guilty and
the stage at which it was tendered. The Crown have
now appealed against this sentence on the ground
that it was unduly lenient. No exception is taken to
the 25 per cent discount so there is no need for us to
set out the factors, principally the stage at which an
unequivocal intention to plead guilty in the terms
finally accepted was intimated to the Crown, which
the sentencing judge took into account when
selecting it. The issue for us is therefore whether in
the whole circumstances the starting point of »5,000
can be regarded as unduly lenient.
The facts
[4] The sentencing judge was presented with an
agreed narrative, on which his report to this court is
based. Some additional information was provided in
the course of discussion before us. This allows us to
give the following account.
[5] Munro are a wholly owned subsidiary of William
Munro Construction (Highland) Ltd (‘‘Construction’’). The directors of both companies are members
of the Munro family, principally William Munro and
his brother David, who are respectively managing
director and transport director.The principal activity
of Munro is that of haulage and waste disposal contracting. They operate from various premises on the
Cromarty Firth, including premises at Deephaven
Industrial Estate, Evanton, and Kindeace Quarry.
[6] Umax Ltd (‘‘Umax’’) are international pipeline
fabricators. They also have a base at Deephaven
Industrial Estate and, as we understand it, are part of
an international group of companies.
[7] In June 2006 Umax decided to sell a Michigan
L190 wheeled loader (‘‘the Michigan’’) and indicated
through the trade locally that the machine was
available. The Michigan had a bucket at the front, a
cab in the centre and an engine at the rear, and stood
on four wheels fitted with large pneumatic tyres. At
the time the tyres were filled, not with air, but with a
solution of water and salt, adding a weight of about
four tonnes in total; this is a recognised method of
giving additional stability to the machine. In that
condition, the Michigan weighed 30.13 tonnes.
[8] William Munro, the managing director of
Munro, expressed an interest in the purchase of the
Michigan. On 3 July 2006 he and Angus Gillies,
Munro’s contracts manager, visited the Umax
premises and test drove it. The Umax site manager,
Gavin Sutherland, participated.The agreed narrative
states that both Gavin Sutherland and Andrew Gillies
‘‘claim that they were not aware of and did not discover
any braking defect on the machine during this
process’’. There was in fact a serious defect in the
parking brake, the nature of which we discuss in
more detail below. Following the initial test drive the
Michigan was moved about 200 yards to Munro’s
premises, where its use was further demonstrated.
Angus Gillies and William Munro decided that,
before a sale was concluded, further testing was
required at Kindeace Quarry, where it would be used.
They both understood that the Michigan weighed
about 27 tonnes, and were unaware that the water in
the tyres added about four tonnes.
[9] Accordingly, on 5 July 2006, the lorry driver
Walter MacLennan was instructed by William
Munro to transport the Michigan from Munro’s base
at Evanton to the quarry.Walter MacLennan had been
employed as a jobbing lorry driver by Munro for more
than 15 years. He collected a low loader trailer from
other premises belonging to Munro and drove it to
their premises at Evanton where the Michigan had
last been tested. The low loader trailer had two
loading ramps at the rear, which were raised and
lowered by hydraulic arms.They were not designed to
be capable of restraining the load when raised. The
load required to be separately secured once placed on
the trailer.Two securing chains were supplied with the
trailer. At Munro’s premises, Angus Gillies drove the
Michigan up the lowered ramps onto the low loader
trailer, put its gears into neutral, switched off the
engine and operated a pull lever in order to activate
the handbrake. According to the agreed statement, he
‘‘apparently remarked to the driver Walter
MacLennan that ‘it had good brakes’’’.The Michigan
was butted up against the front of the trailer and its
bucket was lowered onto the swan neck where the
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trailer deck rose over its front wheels. Walter
MacLennan was then left to secure the load. He
applied the two securing chains by passing the front
chain through the eyes and over the arms behind the
bucket of the machine and weaving the rear chain
behind the tow pin at the rear of the loader. Both
chains were then tightened with a ratchet. He did not
use wheel chocks. Apparently, it is not now normal
practice to use them, as the size and elasticity of the
tyres would necessitate very large chocks, the use of
which would give rise to manual handling problems.
[10] In this situation, the following features may be
noted: (1) as a result of the serious defect in the parking
brake, discussed below, the Michigan’s wheels were
free to turn; (2) the Michigan was thus only held in
place by the two securing chains, each of which, on
subsequent testing, was found to have a breaking
strain of 4.5 tonnes; (3) the total train weight of the
articulated tractor and trailer unit was 44 tonnes.The
unladen weight of the unit was 18.22 tonnes. Accordingly, when the 30.13 tonnes weight of the Michigan
was added, the total weight of the laden unit was
48.35 tonnes. The amount of the overloading was
approximately equal to the weight of the water in the
tyres of the Michigan.
[11] Walter MacLennan then set off to drive the
laden unit to the quarry. For most of his journey he
travelled along the A9 road, which is comparatively
level, and then turned left onto an unclassified public
road leading from the A9 junction at Tomich to
Newmore. This road sloped slightly uphill, at an
angle of about five degrees.
[12] Meanwhile, Christina Fraser and Julia McKay
were travelling in Julia McKay’s Nissan Almera
motor car along the A9. They both worked as beauty
consultants, latterly at Debenhams store in Inverness,
and shared travel arrangements. They left work at
about 5.30 pm, and at about 6.30 pm they approached
the Tomich junction. Julia McKay was driving and
Christina Fraser was in the front passenger seat.
[13] By this time, the unit driven by Walter
MacLennan was about 40 metres from the junction.
Because of the incline on the road, the Michigan
began to roll backwards on the low loader trailer,
thereby imposing a load on the chains which was in
excess of their combined breaking strain. Both chains
broke, the Michigan then ran backwards down the
trailer, struck the hydraulic ramps, knocked them
down onto the road, and rolled backwards down the
slope and onto the northbound carriageway of the A9.
There it struck the Nissan Almera, and crushed it
almost flat. Christina Fraser was killed outright and
Julia McKay, remarkably, survived with injuries.
[14] The agreed narrative included a victim impact
statement. The emergency services attended soon
after the accident. Christina Fraser was pronounced
dead at the scene, having died of multiple injuries.
She was 24 years old at the time of her death. For nine
years before her death she was in a relationship with
Garry Ross and since January 2005 they had lived
together at Garstein, Arabella, byTain.They had been
engaged for three years. Her fiance¤ chanced upon the
scene of the accident on his way to pick her up and
realised that the car involved was the one in which she
had been travelling. He was sent to wait for news at the
hospital in Inverness but discovered that only the
driver ç Julia Mackay ç arrived there. Both Garry
Ross and Christine Fraser’s parents have been
devastated by the loss of his fiance¤e, their daughter.
The family enjoyed particularly close and happy
bonds and Mr and Mrs Fraser and Mr Ross feel a
sense of complete and utter desolation at her
untimely and tragic death.
[15] Julia McKay was cut free from the wreckage
and taken to hospital, where she was found to have
suffered bruising and cuts and required surgery to
repair two fingers on her left hand. She was in
hospital for four days. Although she has recovered
from her physical injuries, she has been left with a
weakness in her left hand and scarring and has experienced psychological difficulties as a result of the
accident, with post traumatic stress, a psychological
inability to drive and extreme difficulty in travelling
as a passenger. She is obtaining professional psychiatric advice.
The offence
[16] It is now necessary to consider in more detail
the failures on the part of Munro which caused the
accident and thus constituted the offence. Obviously,
steps should have been taken to ensure that the
Michigan was not able to roll off the low loader trailer
as it did. It is not suggested, for reasons given above,
that chocks should have been used or that they would
have been capable of immobilising it. This leaves for
consideration the use of chains and the Michigan’s
parking brake.
[17] According to the agreed narrative: ‘‘Expert
opinion has been sought on the manner of securing
the load. Remarkably there does not appear to be any
compulsory training for lorry drivers in this
connection nor is a lorry driver expected to be
familiar with what appears to be the ‘best practice’
standard, ie. the Department of Transport Code of
Practice for Safety of Loads on Vehicles. Some
general questions are asked apparently as part of the
HGV licence test and thereafter it seems to be a
matter of accumulated experience † The Code of
Practice provides very clear guidance as to how a
vehicle of this type should be loaded and secured. It
is clear that the chains selected should have been of
sufficient strength to restrain 100 per cent of the
weight of the vehicle in any forward motion and 50
per cent of the weight of the vehicle in any rearward
or sideways motion and should at least have been
lashed at each of the four wheel stations.The Code of
Practice suggests that no reliance should have been
placed on the effectiveness of the parking brake.’’
Angus Gillies, who attended the scene of the
accident, apparently remarked: ‘‘The chains broke
when the lorry driver went up the hill and the
machine came off.These old fucking chains are never
checked.’’ It is clear that the chains used by Walter
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McLennan fell far short of the guidance provided by
the code of practice. It is not suggested that the
chains would have held if there had not been about
four tonnes of water in the tyres of the Michigan.The
agreed narrative states: ‘‘The breaking load of the
chains is not something that Walter MacLennan
would have been expected to know but is information
which his employer is expected to hold and could have
provided to him (together with additional chains) if
requested. It is clear that inadequate plant, materials
and information was available to Walter MacLennan
who had no information as to the weight of the
vehicle, and an inadequate number of appropriate
and sufficient weight bearing chains.’’
[18] Notwithstanding all of this, counsel for Munro
submitted to us that the main purpose of the chains
was principally to stop the Michigan from bouncing
on the low loader trailer, and that the failure of the
chains should not be regarded as a major factor in
Munro’s criminal responsibility for the accident.We
are unable to accept this approach, having regard to
the terms of the agreed narrative and the code of
practice, and above all to the terms of the charge to
which Munro pled guilty. It does, however, require us
to take an even more critical look at the defect in the
parking brake.
[19] The parking brake was operated by a push / pull
lever.When this was pulled, brake pads were applied to
a disc attached to the transmission of the Michigan.
The design was to prevent the Michigan from
moving even with the engine running and the transmission in gear. In addition, the transmission had an
interlock with the parking brake which automatically
applied the service brakes if an attempt was made to
move the vehicle when the parking brake was applied.
As we understand it, this would only happen if the
ignition was switched on and the engine was running.
If the ignition was switched off and the transmission
was in neutral, only the parking brake would prevent
the Michigan from rolling forwards or backwards, at
least on an incline. Immediately after the accident the
parking brake was found to be inoperative due to a lack
of adjustment.When the lever was pulled, in order to
engage the parking brake, the brake disc was still free
to turn.The reason for this was that the disc pads were
worn.They required manual adjustment to be brought
into contact with the brake disc in order to render the
parking brake effective.This adjustment had not taken
place for some time: there were only 3mm of wear
remaining on the brake pads, and it took 20 cranks of
the parking brake adjuster to bring the pads into
contact with the disc. Once this was done, the
parking brake was found to be capable of holding the
Michigan on a ramp with a gradient of 1 in 6,
i e about 15 degrees.The presence of dirt on the front
side of the disc indicated that this situation had
pertained for some time.
[20] Umax’s service records relating to the
Michigan were lodged as a Crown production.
According to these records, on 24 May 2005 it was
noted that the handbrake disc was cracked, site
welding was unsuccessful, and a new disc required.
There was no record that a new disc was ever fitted.
On 12 December 2005 it was recorded that the
handbrake was not holding in reverse, when the
Michigan rolled backwards. On 9 January 2006 it was
noted that the handbrake needed adjusting. Having
regard to the state of the parking brake when it was
examined following the accident, this was not done.
It is not our function to pass judgment on Umax, or
to comment on the credibility of their site manager
Gavin Sutherland’s claim that he was not aware of
any braking defect on the Michigan; but the fact was
that information was available to Umax which was
not communicated to Munro. It may be that the
interlock function tended to mask the defect in the
parking brake. In any event,William Munro, Andrew
Gillies and WalterMacLennan all appear to have been
under the impression, on the basis of a test drive
without further examination by a qualified engineer,
that the Michigan was in a fit state to be transported
by road on the low loader trailer, with the parking
brake being used as the principal means of
preventing it from rolling backwards off the trailer.
Events proved them wrong.
The appropriate level of fine
The cases
[21] The relevant provisions of the Health & Safety
at Work etc Act 1974 have been quoted above at para 1.
Given thatMunro were prosecuted on indictment, the
penalty to which they were liable, in terms of
s 33(1A) of the Act, was a fine of unlimited amount.
That would have remained the position if they had
been prosecuted on indictment in the sheriff court,
which we were told would have been the case had the
charge to which they pled guilty been the only charge
in the indictment.
[22] Although there have of course been occasions
ç fortunately rare ç in the Scottish courts where the
level of the appropriate fine for a contravention of the
statutory provisions causing death has had to be
considered, most notably in HM Advocate v Transco
Plc in August 2005, no case has led to a reported
judgment of this court in which the relevant considerations have been discussed. We now have that
opportunity. This involves a consideration of the
English authorities.
[23] In R v FHowe & Son (Engineers) Ltd the Court
of Appeal made some general observation about cases
of this nature, with particular regard to the gravity of
the breach, aggravating features, mitigating features
and the policy underlying the legislation. Following
this, in R v Friskies Petcare (UK) Ltd the Court of
Appeal recommended the use of documents listing in
writing not merely the facts of the case but also the
aggravating features relied on by the Crown and the
mitigating features relied on by the defence. Such
documents have come to be known in England as
Friskies schedules.
[24] We do not think it necessary to go further into
the detail of those two cases, in view of the decision of
the Court of Appeal in R v Balfour Beatty Rail Infrastructure Ltd, in which the Court of Appeal, chaired
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SCOTS LAW TIMES: ISSUE 09: 13-3-2009
by the Lord Chief Justice, Lord Phillips, set out
principles derived by the sentencing judge in that
case from the judgment in Howe and other cases,
which at [2007] 1 Cr App R (S), p 380, para 23, they
described as ‘‘a helpful summary of the guidance
afforded by the decided cases, which guidance we
would endorse’’. These principles, so far as relevant
for present purposes, were stated at pp 379^380, para
22, to be as follows:
‘‘(1) Failures to fulfil the general duties imposed by
sections such as, for example, section 3 of the 1974 Act
are particularly serious, as such sections are the foundations for protecting health and safety of the public.
‘‘(2) Historically, fines for such offences, certainly
those imposed by magistrates, have been too low.
‘‘(3) It is not possible to say that a fine should stand
in any specific relationship with a turnover or net
profit of the defendant. Each case must be dealt with
according to its own circumstances.
‘‘(4) It may be helpful to look at how far short the
defendant fell of the appropriate standard.
‘‘(5) Generally, where death occurs in consequence
of the breach, that is an aggravating feature. To that
proposition I would add that by analogy with cases of
causing death by dangerous driving, multiple deaths
must be regarded as more serious than single deaths,
though not, of course, standing in anything like an
arithmetical relationship with them.
‘‘(6) A breach with a view to profit seriously
aggravates the offence.
‘‘(7) Also relevant is or may be the degree of the risk
and the extent of the danger, specifically whether it is
an isolated failure or one continued over a period.
‘‘(8) The defendant’s resources and the effect of a
fine on its business are important. Any fine should
reflect the means of the offender, and the Court
should consider the whole sum it is minded to order
the defendant to pay including any order for costs.
‘‘(9) Mitigation will include (1) a prompt admission
of responsibility and a timely plea of guilty; (2) steps
taken to remedy deficiencies drawn to a defendant’s
attention; and (3) a good safety record.
‘‘(10) Above all, the objective of the fine imposed
should be to achieve a safe environment for the
public and bring that message home, not only to
those who manage a corporate defendant, but also to
those who own it as shareholders. Later decisions
have all drawn on and confirmed the usefulness of
Howe as an authority and they have added the
following further points of possible application to
this case.
‘‘(11) The stated objective in Howe means that consistency of fines between one case and another and
proportionality between the fine and the gravity of
the offence may be difficult to achieve. Consistency
may not, therefore, be a primary aim of sentencing in
this area of law. R v Jarvis [2005] EWCA Crim 1409
paragraph 7.
‘‘(12) The court can take a more serious view of the
breaches where there is a ‘significant public element’,
particularly where the public has to trust a company
entrusted with work relating to their safety to carry
that work out competently and efficiently. The court
can also take into account in such cases the fact, if
appropriate, that it was a matter of good fortune that
the risks, and presumably their consequences, did not
turn out worse than in the event they did. Jarvis,
again, paragraph 11.’’
The thirteenth principle, which does not apply in
the present case, related to the position of a public
body.
[25] In later discussion the court said:
‘‘42. Section 3 of the 1974 Act requires positive steps
to be taken by all concerned in the operation of the
business of a company to ensure that the company’s
activities involve the minimum risk, both to
employees and to third parties. Knowledge that
breach of this duty can result in a fine of sufficient
size to impact on shareholders will provide a
powerful incentive for management to comply with
this duty. This is not to say that the fine must always
be large enough to affect dividends or share price.
But the fine must reflect both the degree of fault and
the consequences so as to raise appropriate concern
on the part of shareholders at what has occurred.
Such an approach will satisfy the requirement that
the sentence should act as a deterrent. It will also
satisfy the requirement, which will rightly be
reflected by public opinion, that a company should be
punished for culpable failure to pay due regard for
safety, and for the consequences of that failure.
‘‘43. A breach of the duty imposed by s. 3 of the 1974
Act may result from a systemic failure, which is attributable to the fault of management. It may, however,
be the result of negligence or inadvertence on the
part of an individual, which reflects no fault on the
part of the management or the system that they have
put in place or the training that they have provided.
In such circumstances a deterrent sentence on the
company is neither appropriate nor possible.Where
the consequences of an individual’s shortcoming have
been serious, the fine should reflect this, but it should
be smaller by an order of magnitude than the fine for a
breach of duty that consists of a systemic failure.’’
[26] We find these passages to be highly persuasive.
In our opinion, especially given that the 1974 Act is a
United Kingdom statute, and uniformity of
sentencing, other things being equal, between the
various jurisdictions is desirable, they should be
followed by sentencers in Scotland, and we follow
them.
Other materials
[27] In addition to these cases, our attention was
drawn to two other documents from England. The
first was the Magistrates’ Court Sentencing Guidelines,
issued by the Sentencing Guidelines Council in May
2008. Having regard to the limited sentencing powers
of magistrates’courts, we find these guidelines to be of
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SCOTS LAW TIMES: ISSUE 09: 13-3-2009
no assistance for present purposes, beyond their
recognition of the Howe and Balfour Beatty
principles. The second was the Consultation Paper on
Sentencing for Corporate Manslaughter, issued by the
Sentencing Advisory Panel at the request of the
Sentencing Guidelines Council in November 2007,
in anticipation of the coming into force of the
Corporate Manslaughter and Corporate Homicide
Act 2007 on 6 April 2008. By s 1(1) of that Act an organisation to which the section applies is guilty of an
offence if the way in which its activities are managed
or organised causes a person’s death and amounts to a
gross breach of a relevant duty of care owed by the
organisation to the deceased. By subs (5) the offence
under that section is called corporate manslaughter,
in so far as it is an offence under the law of England
and Wales or Northern Ireland, corporate homicide,
in so far as it is an offence under the law of Scotland.
This is a more serious offence than a breach of s 3 of
the 1974 Act which causes death, and the panel’s
views require to be read in that context.
[28] In the paper, at paras 58 to 60, the panel
expressed the provisional view that annual turnover
is the most appropriate measure of an organisation’s
ability to pay a fine, and thus the starting points and
ranges proposed by them were expressed as percentages of annual turnover. Annual turnover was defined
as ‘‘the aggregate of all sums of money received by an
organisation during the course of its business † over
an annual period’’. The panel’s provisional starting
point for an offence of corporate manslaughter
committed by a first time offender pleading not
guilty was a fine amounting to 5 per cent of the
offender’s average annual turnover during the three
years prior to sentencing. After taking into account
any aggravating and / or mitigating factors, the court
would then arrive at a fine which would normally fall
within a range of 2.5 to 10 per cent of average annual
turnover.
[29] Of more relevance to our consideration, the
panel’s provisional starting point for an offence
under the 1974 Act involving death was a fine
amounting to 2.5 per cent of average annual turnover
during the three years prior to the offence. The fine
would normally fall within a range of 1 to 7.5 per cent
of average annual turnover. We were not shown any
guidelines issued following the consultation process,
so the consultation paper must be regarded as of
some, but limited, assistance for present purposes.
Munro’s financial position
[30] This brings us to the financial position of
Munro. The information provided to the sentencing
judge, and to us, is less than might have been hoped
for. Where a company has been convicted of an
offence such as the present, or indeed any other
offence in respect of which its financial position
would be relevant in determining the level of fine, it
is for the company to place before the court sufficiently detailed information about its financial position to
enable the court to see the complete picture without
having to resort to speculation. In addition to the
lodging of all relevant documents, it may in some
cases be thought appropriate to lead the evidence of
an accountant. Though this was not done in the
present case, it would have been appropriate, since all
that was placed before the sentencing judge was the
directors’ report and financial statements, in relation
to Munro, for the years ended 30 September 2005
and 30 September 2006. The sentencing judge was
informed that Munro employed about 60 persons
and were a significant employer in the area where
they operated. The sentencing judge paid particular
heed to the directors’ report and financial statements
for the year ended 2006. From these he noted that in
that year Munro had a turnover of »2,306,782. They
made an operating loss of »14,281, but after various
adjustments, particularly in respect of tax, they made
a net profit for the year of »18,854.We would add that
in the previous year turnover was »2,072,418, gross
profit was »426,484, operating profit was »213,473,
and net profit was »157,984.
[31] In addition, we were shown the abbreviated
accounts for the year ended 30 September 2007
relating to Munro, and the abbreviated accounts for
the years ended 30 September 2006 and 30
September 2007 relating to Construction. These
contain abbreviated balance sheets and accompanying
notes, but not profit and loss accounts. From these it
can be seen that the net assets of Munro were
»328,117 as at 30 September 2005, »346,971 as at 30
September 2006, and »339,150 as at 30 September
2007.The significant drop in gross profit between 30
September 2005 and 30 September 2006 was attributable to a substantial increase in the cost of sales; we
were told that these were principally fuel costs.
Creditors of Munro included the directors William
Munro and David Munro, who as at 30 September
2006 were owed »128,011 between them, and as at 30
September 2007 »116,405. Our attention was also
directed to the abbreviated accounts of Construction,
but only for the purpose of showing that as at 30
September 2005 there was a balance due to the
directors of »442,108, and as at 30 September 2006
»441,760. It would appear from these figures that the
financial viability of both Munro and Construction is
in part dependent on loans fromWilliam Munro and
David Munro, but we were not told when and in what
circumstances these loans were made.What we were
told was that William Munro derives a salary of
»40,000 gross, and his wife Jean a salary of »10,000
gross, from Construction, and not from Munro; and
David Munro derives a salary of »24,000 gross from
Munro, and none from Construction. Counsel
pointed out that most of the operating machinery
forming part of the fixed assets of Munro was leased
or on hire purchase. The construction industry was
currently experiencing a downturn in business,
which in the case of Munro was likely to be 30 to 40
per cent. It would cause the company great difficulty
to find, say, »50,000.
The sentencing judge’s approach
[32] In his report to this court, the sentencing judge
states: ‘‘Having regard to all the foregoing factors I
SLT HM ADVOCATE v MUNRO & SONS (HIGHLAND) LTD (High Ct) 238
SCOTS LAW TIMES: ISSUE 09: 13-3-2009
formed the view that this was a serious offence.There
had clearly been failures by the appellant company in
the operation of their undertaking in relation to the
transport of the Michigan loader in the way
described in the charge. I accept that the two
technical factors referred to by counsel had some
mitigatory value. It would clearly have been desirable
had the owners of the vehicle drawn to the appellants’
attention the increased weight caused by water in the
tyres and the defective state of the parking brake. It
did, however, seem to me that this mitigation was
relatively slight, there being a plain obligation upon
the appellants themselves to check matters of this
sort. I accepted the force of the submission in relation
to the early plea of guilt, and adjusted my sentence
accordingly. In considering the appropriate level of
fine, my principal consideration was the ability of the
appellants to meet a financial penalty. In that regard I
took account of the information contained in the
company’s accounts. I was of the view that these were
the best evidence available to me as to the company’s
ability to meet a financial penalty. As I have already
observed these were audited accounts with an appropriate certificate from chartered accountants. I had no
reason to doubt the veracity or accuracy of the
accounts. The accounts showed a company which
made an operating loss, only turned into a profit by
virtue of tax adjustments. On this basis it seemed to
me that the company had a relatively limited ability to
meet a financial penalty. It seemed to me that any
penalty I imposed should be at a level which, whilst
reflecting the serious nature of the crime, would not
result in the insolvency of the company or render the
company in danger of insolvency.’’ (We do not know
why the sentencing judge refers to Munro as the
appellants, rather than the respondents, throughout
his report.) The sentencing judge also notes that no
challenge was made to the submission made to him
by counsel for Munro that the drop in profitability
between 2005 and 2006 was largely attributable to an
increase in fuel costs. He concludes: ‘‘The grounds of
appeal refer to ‘An apparent drop in profitability †’.
Candidly I do not understand the use of the word
‘apparent’. I also note that it is said that the net worth
of the company was about »347,000.That statement is
factually correct. In candour I did not take it into
account in considering sentence. In my respectful
view it is of little assistance in calculating the appropriate level of fine. The figure is no more than a
statement of the value of the company on a notional
breakup and I would not consider it relevant to the
question of calculation of a fine.’’
[33] It is apparent from these passages that the
sentencing judge was not invited to consider the
decisions of the Court of Appeal in Howe and Balfour
Beatty. It is also apparent that, as he expressly states,
his ‘‘principal consideration was the ability of
[Munro] to meet a financial penalty’’, and that in
assessing that ability he proceeded on the basis of the
net profit for the year ended 30 September 2006.
Discussion
[34] In our view the sentencing judge fell into error
in approaching the question of the determination of
the appropriate fine in this manner. He should have
taken into account the gravity of the offence, and any
aggravating or mitigating features, along with the
ability of Munro to pay a fine. He should, above all,
have borne in mind the policy underlying s 3 of the
1974 Act and the public interest in the requirement
that Munro should be punished for its culpable
failure to pay due regard for safety, and for the consequences of that failure: Balfour Beatty at p 386, para
42.
[35] Munro were under a clear statutory duty to
protect the health and safety of the public.They were
responsible for transporting the Michigan, a very
heavy wheeled vehicle, on a low loader trailer along
public roads, including the A9 trunk road. It was
entirely foreseeable that if the Michigan rolled off the
low loader trailer, members of the public using the
road would be exposed to grave risk of death or
serious injury. It would, of course, be a matter of
chance whether, if it did so, it would collide with no
vehicle or, as actually happened, with a vehicle
containing two occupants, or with a vehicle, such as a
bus, containing many occupants. Their duty was to
conduct their undertaking in such a way as to ensure,
so far as was reasonably practicable, that such a thing
did not happen.
[36] While, in the circumstances, little turns on the
fact that its actual train weight was about four tonnes
in excess of the maximum permissible gross weight of
the loaded tractor and trailer unit, Munro failed to
comply with their statutory duty because the chains
were inadequate and the handbrake of the Michigan
did not work. If, as counsel submitted, it was not
intended that the chains alone should be sufficient to
prevent the Michigan from rolling off the low loader
trailer, that is not only incompatible with the terms of
Munro’s plea of guilty, but it also means that they were
relying on the handbrake alone for that purpose.
No doubt Umax should have told them that problems
with the handbrake had been reported. No doubt the
test drive, for the reasons explained above, did not
disclose that the handbrake was defective. But if the
intention was to rely on the handbrake, and that
alone, to prevent the Michigan from rolling off the
low loader trailer, more was clearly required: most
obviously, the Michigan should have been properly
inspected by a person sufficiently qualified and
experienced to detect the defect. This had, after all,
already manifested itself to the extent that it had been
recorded in the service records kept by Umax.
[37] The driver, Walter MacLennan, is not to be
blamed. So far as individuals are concerned, the fault
lay higher up in the company. William Munro and
Andrew Gillies were in a position to take the appropriate decision at a managerial level. In the context of the
operations of a small family company, we regard this as
a systemic failure. The consequences of Munro’s
corporate error of judgment were catastrophic, and
need to be brought home to Munro’s directors, ConSLT HM ADVOCATE v MUNRO & SONS (HIGHLAND) LTD (High Ct) 239
SCOTS LAW TIMES: ISSUE 09: 13-3-2009
struction as their shareholders, and the Munro family
members who ultimately own them.
[38] On the other hand, we accept that Munro have
no previous convictions and that, particularly since
the Michigan was in their possession for only a short
time, this was an isolated occurrence. There can be
no doubt that there has been a prompt admission of
responsibility and a timely plea of guilty. Munro have
taken the whole matter very seriously, as is evident
from the attendance of William Munro at every stage
of the court proceedings.
[39] As has been seen, it is not easy to form a
complete picture of Munro’s financial position. Net
profit is not the only relevant factor in assessing the
level of fine which will serve the purposes of retribution and deterrence, and thus serve as punishment
without bringing a company to its knees. We accept
that, although their turnover is substantial, they are
not a particularly profitable company and are very
much exposed to such factors as increases in fuel
prices as well as fluctuations in the economy.
[40] Taking a broad view of the matter, in light of the
passages from Balfour Beatty quoted above and the
other considerations we have discussed, and making
due allowance for the timing of the plea of guilty, we
have come to the view that the sentence imposed by
the sentencing judge was far too low and took
inadequate account of the nature of the offence itself
and the need for appropriate punishment in the
public interest. In our view an appropriate starting
point, taking account of all the relevant circumstances,
would have been one of »40,000, which would then
have been discounted by 25 per cent, to reflect the
plea of guilty and its timing, resulting in a fine of
»30,000.
Result
[41] We shall accordingly quash the fine imposed by
the sentencing judge and substitute a fine of »30,000.
Counsel for Appellant, Bain, QC, AD; Solicitor,
N McFadyen, Crown Agent ç Counsel for Respondents,
J GThomson; Solicitors, The Anderson Partnership.