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Tata fine ‘bucks trend’ for large firms in court of appeal

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Tata Steel has had its fine over guarding issues that caused injuries to two workers slashed by half a million pounds at the Court of Appeal.


The £1.5m result down from £1.98m for the multibillion turnover steel giant is the first reduction for a very large organisation to be reached in the court of appeal since the new guidelines were issued.

Tata UK Limited was originally fined on 26 July 2016 for two separate incidents, which took place within five months of each other in 2014 and 2015 at its Corby plant. Both resulted in the workers suffering partial amputation of their left hands because of unsuitably guarded machinery.

The appeal on 7 June was won on the basis of a re-assessment of ‘likelihood of harm’ under the guidelines.

Lord Justice Gross told the Royal Courts of Justice he was ‘powerfully persuaded’ to lower the offence for the most heavily fined second incident down from high to medium likelihood. He said the lathe, which had crushed 52-year-old Mr Ferns’ hand, had been in use for 150,000 man hours without incident.

He noted how sentencing judge Rupert Mayo had moved up a harm category – to category 1 – to reach a £2.75m starting fine and did not correct his use of the guidelines to do so.

However, he said: “The figure cannot stand; it is either wrong in principle or manifestly excessive. The correct figure should be £2 million.”
Tata’s lawyers failed to argue on its other points. These included that the judge had wrongly sought to ‘punish’ the parent firm Tata Steel Limited. Keith Morton QC had argued to make ‘downwards adjustment’ for the loss-making offspring firm Tata UK.

The judge disagreed, noting that the fine amounted to no more than 0.6% of the group’s annual losses: “It would seem to me wrong not to take the position of TSL into account – the removal of [the parent’s] resources would produce a misleading and unrealistic picture of Tata’s financial circumstances.”

Speaking on the case at TGC health and safety seminar on 14 June, the firm’s barrister Dominic Adamson said it was “an exceptional case where both resources needed be properly taken into account.” He doubted it set a precedent for ‘parental accounts’ to be provided.

He believed, however, that the case shed light on how judges use the sentencing guidance’s tables to fine very large organisations. “It helps us see how a judge might move up the categories in order to fine a large firm.”

Adamson said that the win proved reductions could be made for multibillion firms. “The trend of decisions in appeal court is it is not a happy hunting ground for large companies…The judge in Sellafield [case] even said a materially larger fine would have been in order. That is not what happened in our case.”

At Northampton Crown Court on 26 July 2016, judge Mayo fined Tata £185,000 for the first offence, and £1.8m for the second. On 7 June the £1.8m fine was substituted for one of £1.315m. The other fine of £185,000 was allowed to stand – he dismissed the appeal – making a total revised penalty of £1.5m.

To read the judgment at Court of Appeal click here 

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