Last year the criminal court fined Balfour Beatty £10m after it pleaded guilty to its part in the Hatfield rail disaster. Then last month the Court of Appeal lopped £2.5m off the penalty. Here’s why …

Instead of paying the £10m fine ordered by the judge at the Old Bailey, Balfour Beatty has had it reduced to £7.5m by the Court of Appeal. Balfour, being a decent chastened lot, will no doubt send the £2.5m bonus to the 102 people injured and the families of the four who lost their lives. Not many hours before the Hatfield rail disaster, I was on another train on that line. I travel on it all the time. I vividly recall being jolted in my seat. No, I can’t swear it was at Hatfield, but it was thereabouts. I shrugged it off. Or did so until the lunchtime news bulletin described the restaurant car of the high speed train having its roof ripped off.

The £10m fine was for a simple criminal offence: exposing the general public to risks to our health or risks to our safety when conducting your business. Just putting folk “at risk” is a criminal offence. Injury or worse puts the sentence up of course but the offence is risk: “It shall be the duty of every employer to conduct his undertaking in such a way as to ensure, as far as reasonably practicable, that persons not in his employment [you and me] who may be affected thereby are not thereby exposed to risks to their health and safety.” That’s been the law for 30-years.

The bewildering feature of the Balfour case, for me at least, is that Balfour Beatty is an utterly professional enterprise that took and takes its duties towards public safety so seriously. And yet its team at Hitchin, the team in Hertfordshire, went so wrong.

The Hitchin office was “Fred Carno’s Circus”, “a Shambles”, “the blind leading the blind”. No that’s not me saying that. That’s the Old Bailey judge agreeing with counsel. It was a £368m, seven-year contract. The firm’s job was to inspect 330 miles of track between London and Berwick-upon-Tweed. On a weekly basis trackmen did a visual check of every yard of track against a specified list of defects. An inspector admitted that what he was doing was useless. The risk in the uselessness is a criminal offence; three quarters of a million passengers a year travel the Hatfield line. And it’s not just the inspector who has gone wrong. The judge said that senior management was to blame, since it “ought to know”. Then on an eight-week basis there was to be a special inspection by a route section manager. That fellow let it creep from eight weeks to five and a half months. Incidentally he forged a report falsely recording an inspection not long before the derailment. Then there was supposed to be a biennial check by a track engineer. It was done just two months before the crash. In a nutshell the visual inspections, which should have discovered the defective state of the track, were largely a useless formality, were known by those inspecting to be such and this state of affairs should have come to the attention of senior management.

Next came ultrasonic testing – a walking stick machine is pushed along the rail, making a recorded scan. The results spelt danger but “those to whom reports were made were not competent to deduce this”. They had not received appropriate training.

Not many hours before the Hatfield rail disaster, I was on another train on that line. I travel on it all the time

If a firm the size of Balfour having a huge resource didn’t put in place proper training, what hope the rest?

On day 93 of the trial Balfour changed its plea from not guilty to guilty. All that was left was the sentence. Historically, fines for such offences have been too low. That’s gone. Gone too are low fines for small companies, big for big. It’s the offence and risk that counts. What also counts is running a risk with my skin with a view to profit in your pocket. The fine goes up. The objective is to bring a message home, not only to the firm’s managers but also to those who own it, as shareholders. True, you can mitigate the fine by a prompt admission of responsibility, plea of guilty, steps to remedy differences. By the way Balfour did forthwith act with exemplary measures after the accident to prevent any future recurrence of the event. The fine of £10m did however reflect sentencing guidelines and “incompetence of a serious order”.

So, why did the Court of Appeal lop off £2.5m? Well now, the judge fined the other guilty defendant, Railtrack, £3.5m. The disparity between the two fines was too great. The test in law is whether an objective outsider knowing the circumstances would consider that something had gone wrong with the administration of justice when comparing the two fines and the Lord Chief Justice said, yes. The gate was thus opened for the Court of Appeal to review the fine. That’s as may be, just remember, as a builder or architect or surveyor or engineer, don’t put the public’s skin at risk, much less cause the skin actual harm.