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Businesses convicted of a criminal offence not precluded from recovering fines from others in some cases, says Scottish court


Businesses convicted of a criminal offence are not necessarily precluded from recovering the fines imposed on them from someone else, a court in Scotland has ruled.

The finding by the Outer House of the Court of Session means that the court will now hear in full a case in which a quarry operator, D Geddes (Contractors) is seeking to recover a fine imposed on it following a fatal accident involving an employee from a health and safety advisor it engaged at the time of the incident in 2012.

"It may seem an extraordinary proposition that a company convicted of a criminal offence could recover a fine imposed for that offence from someone else: surely that must be contrary to public policy? Not necessarily, held the Court of Session," litigation expert Craig Connal QC of Pinsent Masons, the law firm behind Out-Law.com, said.

"In an increasingly regulated world, with ever more complex obligations on companies – and health and safety is a good example – it is commonplace for compliance to necessitate use of a range of support, such as consultants or the like. Civil consequences of an incident will generally be covered by insurance and third parties may be dragged into the litigation for a contribution. Crime is different," he said.

"In his ruling, Lord Tyre concluded that rather than look at the issue of a fine, the real question was responsibility. If the company was in any way truly responsible it could not recover the fine," Connal said.

He said that question in this case has been deferred until trial, but that the ruling suggests that D Geddes may have difficulty in winning its claim.

"Unlike the case of an uninsured driver, driving uninsured only due to a false report from his broker, who could properly be said not to be at fault, describing the company as blameless seems more of a stretch," Connal said.

D Geddes (Contractors) was fined £200,000 for a breach of health and safety regulations after one of its employees was killed while working at its premises at Hatton Mill Quarry in Angus, Scotland, in 2012.

According to the Court of Session's ruling, Joseph Troup reversed the lorry he was driving over the edge of a "raised area" while tipping materials into a feed hopper. Although there was a 'bund', or "stop block", in place to prevent lorries from reversing over the edge, Troup had reversed his lorry over the bund into the hopper.

An investigation into the accident by the Health and Safety Executive (HSE) in Scotland found that "there was a build up of tipped sand and gravel in front of the bund that had allowed it to act as a ramp over which a large-wheeled vehicle was capable of driving", according to the court's ruling. The HSE said the bund had therefore "been ineffective due to a combination of insufficient height and the ramping effect of the sand and gravel", the ruling said.

D Geddes (Contractors) claimed that it would have taken steps to rectify the problem with the bund if it had been advised to do so by the health and safety advisors it had engaged at the time of the fatal accident.

The quarry operator claimed that Neil Johnson Health & Safety Services had failed to exercise the ordinary skill and care of "an ordinarily competent health and safety adviser" by not advising it that the height of the bund was lower than the minimum height required under an industry code of practice, as well as the need to make the bund "as vertical as possible" so as to avoid ramping.

Neil Johnson Health & Safety Services has argued, though, that it was not negligent and that the fault with the bund lay with D Geddes (Contractors). It also said that D Geddes (Contractors) could not recover the £200,000 fine imposed on it for a criminal act through an award of damages.

In his ruling, Lord Tyre considered a legal doctrine, in turpi causa, that generally prevents a person from profiting from their own illegal act, and how it applied to the claim for damages made by D Geddes (Contractors).

The judge said that there is no case law in either Scotland or England that absolutely prohibits "recovery of a loss consisting of a criminal penalty or the consequences of imposition of a criminal sanction". 

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