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August 3, 2011

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Costs curtailed in chemical-fire case

Two companies have been ordered to pay hundreds of thousands of pounds in fines and costs over a major chemical fire in Crewe four years ago – but the total could have been even higher had the judge not rejected the HSE’s original costs claim as unreasonable.

The regulator brought the prosecution against Crewe-based waste-recycling company Greenway Environmental Ltd and Preston-based waste-shredder Pakawaste Ltd following its investigation into an explosion and fire at Greenway-operated Aztec Aerosols on the Gateway Industrial Estate on 4 June 2007.
 
Cheshire Crown Court heard that an explosion at the premises in an aerosol-shredding unit – which had been designed, manufactured and supplied by Pakawaste – caused a fire, which, at its height, spread to cover more than 100,000m2 and required 25 fire engines and more than 100 fire-fighters – some working through the night – to put it out. (Scroll to the end of this story to see footage of the fire filmed on a mobile phone.)
 
Aerosols shot into the air and on to nearby roads, and neighbouring buildings were damaged. A 200-metre exclusion zone was set up while fire crews brought the blaze under control, and explosions of drums and cylinders could be heard more than half a mile away.
 
The HSE investigation found that the shredding machine had not been designed to safely shred waste receptacles containing flammable-liquid and gas residues, and that there were unsafe operating procedures in place. It also concluded that it should have been operated in a segregated area, away from where flammable substances were being stored.
 
Sentencing on 28 July, Judge Teage QC fined Pakawaste £50,000 after it pleaded guilty to breaching section 6(1) HSWA 1974 for failing to ensure the shredding unit was designed and constructed to be safe. The company was also ordered to pay costs of £87,030 – less than the full costs of £116,039 claimed against the company by the HSE. The judge reduced the company’s costs by 25 per cent, as it had not engaged in some of the debates that protracted the case.
 
David Hamer, Group managing director of Pakawaste, said that, since the incident, the company has changed its health and safety policy and procedures and invested a lot of time and money in them. It has also delivered and installed more than 600 machines to the waste industry.
 
The case against Greenway was more complicated. In addition to a charge of breaching its general duties under HSWA 1974 the company faced specific allegations by the HSE relating to inadequate arrangements for separation/segregation between the shredding operation and other flammable materials being held prior to shredding, and a failure to install bunding to contain the flammable liquids within the process area.
 
According to the HSE, “this meant that the initial fire spread rapidly, ultimately engulfing the whole site. The initial explosion and fire was a local problem, or difficulty, but escalated and was turned into a major fire and incident as a result of this failure”.
 
Greenway had originally entered a limited plea in December 2010, accepting the general-duty failure but rejecting the other allegations relating to its role in allowing the spread of the fire. However, the HSE did not initially agree the basis of plea.
 
A Newton hearing had been scheduled (where a party has accepted guilt but disputes some of the facts put forward by the prosecution, so a judge must decide which party is telling the truth) but this was subsequently avoided following a joint meeting of experts. According to Greenway’s barrister, Jeremy Barnett, this practice – which is normally reserved for civil proceedings – was to see if the issues could be resolved without the need for a lengthy and costly hearing.
 
Two experts put forward by the defence and two by the HSE considered issues relating to the design of the shredder and the spread of the fire. In relation to the latter, the experts – while agreeing that Greenway did not do everything that was reasonably practicable to prevent the spread of the fire – concluded that “secondary bunding provides no protection against projectiles [the exploding aerosol containers], or thermal radiation, and, therefore, would not have prevented the spread of the fire by these mechanisms”.
 
With regard to the HSE’s contention that bunding would have limited the escape and surface run-off of flammable liquid from the shredder and a nearby IBC containing waste from the machine, the experts conceded that bunding “would have provided some protection or mitigation of risk”, as the burning liquid “would have been contained thereby within a more closely restricted area”. However, segregation by a standalone firewall “would not be certain to contain spillages. . .and would not increase the effectiveness of the secondary bund”.
 
Judge Teage, in his sentencing remarks, criticised the HSE for the “pointless and inconclusive debate” on bunds and firewalls, but also censured Greenway for the “largely futile dispute” on the spread of the fire.
 
He subsequently sentenced on the basis of the agreed conclusions set out in the experts’ joint report and Greenway’s original plea of guilty to a charge under section 2(1) HSWA 1974 of failing to protect the health and safety of its employees. He fined the company £37,500 but reduced the HSE’s claimed costs of £138,079 by a quarter to £103,560, saying he was not convinced that all the costs were reasonable, nor that the investigation and prosecution focused on “truly relevant” issues. “Otherwise,” he added, “there may develop an unfortunate practice of indiscriminate pursuit of all possible theoretical breaches of duty, without regard to their relative importance in the overall picture.”
 
The costs were further reduced to £50,000, based on Greenway’s ability to pay.

Investigating HSE inspector Gill Chambers commented: “There was obviously a fault in Pakawaste’s design and manufacturing process, which resulted in the shredding unit exploding. Greenway should also have had better procedures and arrangements in place to protect its workers.”

“It is extremely important for companies working with potentially dangerous materials to identify the hazards and make a proper assessment of the risk. Machinery has to be fit for purpose and there must be safe working practices for dealing with flammable substances.”

Greenway’s barrister, Jeremy Barnett, who was instructed to act in the case by Dan Stowres, of Irwin Mitchell solicitors, said: “Although Greenway incurred costs in contesting allegations that were made by the HSE at the outset of the case, the acceptance by the judge of the case as set out in the basis of plea resulted in a substantial reduction in fines and costs that would have resulted had the case been accepted on a full basis.”

Mr Barnett explained that the use of joint experts in criminal proceedings was “a novel suggestion” and said he hoped they would become commonplace in criminal cases, as “they can prevent the wasting of costs by the HSE, the Court and the defendants”.

For more details on the case, visit Mr Barnett’s website.

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