An explosive decision

In October 2007 a small mini-market in Southend-on-Sea, Essex pleaded guilty to three offences involving the unsafe storage of fireworks. The resulting fines totalling £13,500 were subsequently upheld on appeal to the Crown Court.

Mini-market fined 50 per cent of annual net profit

Southend Borough Council v Fame Marketing Limited (trading as Mac-Mart) was first heard at Southend-on-Sea Magistrates' Court and was then subsequently heard on 26 October 2007 at Basildon Crown Court by way of appeal against sentence.

The appellant company pleaded guilty to five charges, three of which concerned the unsafe storage of fireworks at the company's mini-market store in Southend. There are very few published cases that outline a common ground detailing how to assess an appropriate level of sentence when dealing with the storage of fireworks.

This in part is perhaps due to there being little experience in this relatively specialist area of what can be termed local government regulatory law. Importantly however, the sale of fireworks is fast becoming a prolific activity of small businesses and this is evident by the ever-increasing number of premises being occupied by this type of commercial enterprise. For this reason therefore, it is considered the facts of this particular case may provide useful guidance to those who are or may in the future become involved in this area of law.

The Manufacture and Storage of Explosives Regulations 2005 (MSER) provides the relevant legislative guidance in the storage of fireworks on retail premises. The MSER came into force on 26 April 2005 and ostensibly replaces the earlier legislative framework as provided for in the Explosives Act of 1875.

Aside from those areas that were once designated metropolitan counties (that is West Midlands, Greater Manchester, Merseyside, Tyne and Wear, West and South Yorkshire) or in Oxfordshire, Cornwall or Norfolk, the responsibility for ensuring that appropriate health and safety measures are being implemented in the storage of fireworks on retail premises is left to local authority Trading Standards departments.

A business or concerned party wishing to retail fireworks will need first to obtain an MSER licence for the storage of fireworks. A licence may be obtained by application to either their relevant local authority, or in certain circumstances to their relevant fire and rescue service if it is they who are the designated licensing body. Such applications to sell and store fireworks are made in writing but often do not involve an inspection of suitability of proposed retail and storage premises.

Nevertheless, the burden of compliance with health and safety requirements rests upon the applicant, and to that extent they are required to confirm such acceptance by endorsement of the application form and which usually states: 'It is your (the applicant's) responsibility to ensure you are aware of, and complying with, the regulations on the manufacture and storage of explosives.

'The licensing authority may prohibit storage of explosives at the site if it believes the site is unsafe. It may also take enforcement action if you are not storing safely.

'If you are planning to sell fireworks outside certain limited periods of the year you may also need a licence under the Fireworks Regulations 2004. Your supplier or local licensing authority will be able to advise.'

Balanced response

Of course, it is not unusual for the requirements of health and safety to be apportioned in this way and for reasons beyond this article I would suggest this to be an appropriate method of administration. Despite this, it is quite evident that in recent years Trading Standards officers have continued to increase their vigilance in matters relating to the sale and storage of fireworks and in this regard we can only speculate at the likely policies underpinning this renewed vigour. In any event, we might accept that it is a balanced response to this developing industry particularly as the potential for significant compromise to public safety is in these particular circumstances a paramount consideration.

Then returning to the case of Southend Borough Council v Fame Marketing Ltd. At the time of the offences in November 2006 Fame Marketing Ltd held a valid licence to sell and store fireworks at their mini-market store in Southend. By way of successive annual licence renewals they had previously held such a licence for three or so years. However, early that November and as part of a routine inspection of the retail and administrative areas within the store, Trading Standards officers immediately noticed that fireworks were being stored dangerously. On three separate occasions the officers observed fireworks being inappropriately displayed and stored such that they were near or about potential sources of ignition and other combustible material. Indeed, on their second inspection of the premises they noticed that a significant quantity of fireworks were being displayed in a large glass cabinet but whose whole rear section was merely constructed of cardboard.

Given advice to rectify health and safety failings

Moreover, that rear section was itself only propped in place by the shop's electrical weighing scales and from the evidence it was clear that they were connected to live mains electricity. On their third inspection and after being given access to the rear of the store, they were also confronted by a number of packing boxes each containing quantities of retail boxes of fireworks. Again those boxes were similarly stacked alongside live electrical sockets and equipment and whose attached cabling was itself nestled among discarded paper and plastic.

It is important to note that on each visit the defendant company was given advice as to how they should immediately rectify the breaches of health and safety.

As a result of these health and safety breaches, and only after the defendant company had failed to take prompt remedial action, Trading Standards officers confirmed they would be taking legal advice with a view to prosecution under the guidance of Southend Borough Council legal department.

The matter was then subsequently set down for trial at the magistrates' court in Southend-on-Sea, but after having obtained counsel's advice at court the defendant company changed their earlier position and duly entered guilty pleas to three offences contrary to: s 33 (1) Health and Safety at Work Act 1974 pursuant to regulation 4 of the Manufacture and Storage of Explosives Regulations 2005. The issue before the court then became one of sentencing and which proceeded on the basis of those facts outlined above followed by mitigation submissions in respect of early guilty pleas and the defendant company's financial ability to pay any subsequent fine. After having heard those submissions the court sought to dispose of the case by way of fines. In total those fines amounted to £13,500 (in relation to the fireworks offences only) and were apportioned as follows (in order of offence): £4,000; £4,500 and £5,000.

As a result of the level of fines imposed in the lower court the defendant company appealed to the Crown Court at Basildon in Essex. The grounds of appeal were set out on the basis that in all the circumstances the fines imposed were manifestly excessive and wholly disproportionate. However, a difficulty for the appellant was that there was little if any relevant comparable case law involving the unsafe storage of fireworks, particularly that relating to small businesses.

Consequently, any subsequent submissions dealing with proportionality would effectively be an appeal to the court to embark upon an assessment of the appellant company's resources: absent of case comparisons. With this in mind, the appellant company therefore submitted that the court ought to have recourse to equity and err in favour of the appellant by reducing the level of fines. Furthermore, that in determining that level the court should also have regard to a test of proportionality such that as a whole the fines should not be put beyond the appellant's ability to pay them in full within a reasonable period.

In his judgement and relying upon R v Howe & Son (Engineers) Ltd [1999] 2 All ER 249 District Judge Chandler (sitting as Recorder) referred to the appropriate guidelines for determining the level of fine to be imposed in health and safety matters. It is important to note at this stage however, that within the jurisdiction of the magistrates' courts, health and safety breaches concerning small commercial enterprises involved in the sale and storage of fireworks have more typically been punished by way of relatively insignificant fines. In any event, in this instance DJ Chandler very helpfully set out his reasoning.

Firstly, the judge established the court ought to be given as full an opportunity to examine the appellant's most relevant and recent accounts.

Thus, if the appellant company seeks to establish that it cannot afford to pay a fine at a particular level it would be prudent to submit to the court a copy of its trading accounts prior to the hearing. If however it fails to provide those accounts, the court is entitled to exercise its discretion and assume the appellant company can pay the fines imposed at first instance.

Determine degree of risk and extent of danger

Secondly, the purpose of health and safety legislation was to minimise risk of harm to both employees and the public at large. The court must therefore consider the peculiar facts of the offences and thereafter determine the extent of the failure by the defendant to meet the minimum requirements required by the relevant legislation.

Thirdly, the court is also obliged to determine the degree of risk and the extent of the danger created by the offence and whether or not the offences were an isolated incident.

Finally, and following the Court of Appeal's guidance set out in R v Rollco Screw and Rivet Co. Ltd [1999] 2 Cr App R 436, where the defendant is a small company the court may extend the period for payment of fines beyond that as typically seen in cases involving individuals. This invariably however implies that the fines imposed may be larger as a result.

The outcome of the case was that the court balanced the gravity of the circumstances against the appellant company's ability to repay the fines imposed in the lower court. Having therefore detailed the facts of the case and allowing credit for an early guilty plea combined with the opportunity to re-offend having been significantly reduced by the revocation of the defendant's licence to store and sell fireworks, the court considered the original fines appropriate even though in total they amounted to 50 per cent of the appellant company's annual net profit.