Exolum Pipeline System Ltd v Health and Safety Executive

Factual and Procedural Background

On 21 March 2023, at the Crown Court at The City, following a trial before Judge Fanning and a jury, Company A was unanimously convicted of two offences under section 33(1)(a) of the Health and Safety at Work etc. Act 1974 ("the 1974 Act"). The offences related to failing to discharge duties to employees and non-employees under sections 2(1) and 3(1) of the 1974 Act respectively. The offences arose from events occurring between 7 and 10 March 2018 at woodland adjacent to a pipeline facility in The State, where Company A failed to ensure the health, safety, and welfare of employees and contractors exposed to risks from the escape of petroleum under pressure during excavation of a repair clamp on a pipeline.

Following conviction, the sentencing hearing on 24 March 2023 resulted in fines totaling £2,300,000 plus victim surcharge and prosecution costs of £227,081.70. Company A was refused leave to appeal against conviction but granted leave to appeal against sentence. Company A renewed its application for leave to appeal against conviction, leading to full argument from both parties. The court reserved judgment and ultimately refused the renewed application against conviction but allowed the appeal against sentence, reducing the total fine to £1,500,000.

Company A operates the main fuel pipeline and storage network in the UK, transporting various fuels at high pressure. In December 2016, a "hot tapping" incident caused a significant fuel leak and environmental contamination at the Site. Company A installed a temporary clamp relying on an elastomer seal intended for replacement within two years.

In early 2018, environmental monitoring detected increased hydrocarbons at the Site. Despite concerns and indications of a possible leak, Company A decided not to depressurise the pipeline or change the product before excavation. Excavation commenced on 9 March 2018 under supervision of Company A's project manager and contractors, exposing a failing clamp seal leaking petroleum under high pressure. Emergency procedures were eventually implemented, including switching the product to diesel and reducing pipeline pressure.

Legal Issues Presented

1. Whether there was a material risk to health and safety arising from the escape of petroleum under pressure during the excavation of the repair clamp.
2. Whether the evidence was sufficient to establish a case to answer and to support the jury's verdict of guilt beyond reasonable doubt.
3. Whether the sentencing was manifestly excessive given the culpability, risk of harm, and mitigating factors.

Arguments of the Parties

Appellant's Arguments

• The Judge erred in refusing the defence submission of no case to answer, contending that the risk was hypothetical and not material.
• The alleged risk was only a possibility without an unconstrained leak mechanism capable of causing fire or explosion.
• The actual leak was minor, described as "dripping like a tap," insufficient to establish an offence under the first limb of the Galbraith test.
• The Judge's assessment of culpability as high did not reflect the factual reality that the decision not to depressurise was an informed one, albeit mistaken.
• Safety systems were in place and implemented; the failings were minor and isolated.
• The likelihood and severity of harm were overstated; harm should have been assessed at a lower category.
• The number of workers exposed was overstated and mitigation reductions were insufficient.

Prosecution's Arguments

• Excavating a high-pressure pipeline suspected and found to be leaking exposes workers to a material risk of injury which any reasonable person would guard against.
• The risk existed regardless of the leak's size found after excavation; the risk was of a fire or explosion from escaping flammable fuel or vapour.
• Precautions taken after discovery of the leak do not negate the existence of a material risk prior to and during excavation.
• Experts agreed that prudent steps would include depressurising the pipeline and changing the product to reduce risk once a leak was suspected.
• There was a failure to act on clear indications of a leak on 9 March 2018, exposing workers to unnecessary risk.
• The evidence satisfied both limbs of the Galbraith test, justifying leaving the case to the jury.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully examined the evidence and submissions regarding the existence of a material risk to health and safety during the excavation of the pipeline clamp. It applied the ordinary meaning of "risk" as a possibility of danger and considered expert testimony on leak mechanisms and potential for fire or explosion. Despite the leak ultimately being small and controlled, the court found that prior to excavation, the risk was real and not hypothetical. The absence of an identified ignition source did not negate the risk of harm. The court rejected the appellant’s submission that the risk was too tenuous or hypothetical to support conviction.

Regarding the appeal against conviction, the court found that the evidence met both limbs of the Galbraith test, justifying the trial judge’s decision to leave the matter to the jury. The jury’s verdict was supported by evidence that a leak was suspected and later confirmed, and that excavation under such conditions exposed workers to a material risk.

On sentencing, the court acknowledged the trial judge’s assessment of high culpability and medium risk of harm, noting the failures to reassess risk at critical points and the decision not to depressurise the pipeline despite indications of a leak. However, the court found the total fine manifestly excessive. It accepted the appellant’s submissions regarding mitigating factors, including Company A’s otherwise good safety record, cooperation with authorities, and significant remedial expenditure. The court concluded that a lower fine would adequately reflect culpability and achieve punishment and deterrence objectives.

Holding and Implications

The court REFUSED the renewed application for leave to appeal against conviction, affirming the jury’s verdict that Company A was guilty of the offences charged under the Health and Safety at Work etc. Act 1974.

The court ALLOWED the appeal against sentence and quashed the original fines of £1,000,000 and £1,300,000. It imposed reduced fines of £600,000 on Count 1 and £900,000 on Count 2, to run consecutively, totaling £1,500,000 plus victim surcharge. The order for prosecution costs remained unchanged.

This decision directly impacts the parties by maintaining the convictions but adjusting the financial penalty to a level deemed proportionate. The ruling does not establish new precedent but reinforces principles regarding assessment of risk, evidential sufficiency, and sentencing considerations in health and safety offences.