It is an offence to sell food that has gone past its sell by date. Fines for offending businesses are decided by magistrates using sentencing guidelines that, in simple terms, identify a starting point for the fine by reference "scores" for factors like blameworthiness and risk of Harm. These scores are used to place the offending in a financial bracket on a chart by reference to turnover. The Judge can then increase or decrease the fine taking into account offender behaviour.
The highest turnover category is "Large - £50 million or over". What happens if your business turnover is in the £bn not £m? And the Judge is less than impressed with the defendant's perceived conduct?
On 21 April 2021, a District Judge imposed a fine of £7.65m to Tesco at Birmingham Magistrates for displaying food for sale beyond its "use by" date on three separate occasions in 2016 and 2017 at three different stores in Birmingham.
Without a chart to place the offending scores on the Judge's approach was to find a figure that would bring the message home to Tesco "and to others in the food business".
This is a largest penalty by reference to previous reported fines. For example, Tesco were fined £160,000 at Reading Magistrates Court in September 2020 for what the Judge in Birmingham described as "similar offences". It far exceeds the upper levels for more serious food safety offences referred to in the Sentencing Guidelines for Food Safety and Hygiene Offences.
Tesco may appeal although that does carry risk for the industry if the Court of Appeal endorse the District Judge's approach. The Court of Appeal recently confirmed in a health and safety case that the starting point is that sentencing very large organisations remains very firmly a matter for the sentencing courts discretion.
The Tesco decision does not bind future Courts although Prosecutors will no doubt refer to it. There has been an upward trend in sentencing generally since 2016 and decisions like this highlight the risk of getting things wrong and the uncertainties of litigation.
The key point most retailers will take from the case is to make sure procedures to remove out of date food from the shelves are working.
In addition, the following emerged from procedural arguments during the long history of the Prosecution:
• The Secretary of State allowed the prosecution to proceed despite Tesco's Primary Authority withholding consent. The fact that a Primary Authority had validated Tesco's procedures did not mean they could avoid proving they had exercised Due Diligence in implementation.
• If the date has expired, the offence has been committed. A retailer cannot defend a case by arguing that food wasn’t microbiologically unsafe even though the use by date had expired.
The Judges' comments on his perception of Tesco's conduct are relevant as it clearly informed where he set the fine. The conduct of the case and how that impacted the fine is therefore of potential interest to retailers facing future regulatory enforcement.
The prosecution followed an earlier breach in 2015 after which Tesco was given the opportunity by the Environmental Health Officers (EHO) to review its procedures rather than face enforcement action.
Following that review, Tesco invited the EHO to re-visit and inspect its handiwork only for the EHO to find many items still on sale beyond the use by date, a step described by the Judge as "an own goal".
The Sentencing Guidelines are a bit more involved than the simplified summary above. They set out a nine-step process for the Judge to run through to arrive at a sentence within a specified range between £100 and £3m (depending on turnover, Culpability, Harm and factors affecting seriousness and judgements about proportionality).
The guidelines do allow in principle for fines to exceed this upper limit where a company's turnover is very high but do not give much guidance to a Judge on how to do that. So, the fine is of interest to lawyers for that reason and (depending on the outcome of any Appeal by Tesco) the Judges' comments are of practical relevance to food retailers considering their response to a future prosecution.
Firstly, the Judge did not take kindly to Tesco's legal arguments designed to avoid prosecution. Tesco tried a number of mechanisms to foil prosecution including:
- Asking its Primary Authority to decline to consent to prosecution.
- Applying to the Secretary of State Office for Product Safety Standards to revoke the Primary Authority consent
- Applying to the High Court to overturn a refusal by the District Judge to allow expert evidence on whether the food was actually unsafe.
The Judge accepted that Culpability should be categorised as "medium" because systems were in place but were not sufficiently adhered to or implemented. So, despite the high level of fine, this was not a case of really serious wrongdoing.
However, the second point of note of caution for the approach to future cases is that the Judge took a clear dislike to Tesco's use of scientific evidence to argue that Harm should be categorised as low risk (category 3). Their expert argued there was little or no risk of actual adverse effect on individuals. The judge dismissed the expert's approach as "cavalier" in trying to shift the responsibility for deciding whether food was safe to the consumer.
The Judge appears (although doesn’t say this) to have accepted the prosecution argument that the correct categorisation of Harm was two on the Sentencing Guidelines scale. This includes features such as a medium risk of an adverse effect on individuals and situations where a regulator might be substantially undermined by offender activities (e.g. where the law is ignored, and the consumer is left to decide if food is safe or not).
The third cautionary tale is that the Judge viewed the lack of cooperation and Tesco's attempts to avoid being prosecuted added to the seriousness of the offence. So did the long delay in pleading guilty. Tesco only entered Guilty pleas on 21 September 2020 when all avenues to avoid being prosecuted had been exhausted. In other words, this all bumped up the fine. The Judge stated that" this guilty plea must rank as probably the most reluctant guilty plea in legal history" and "there is… no genuine contrition about these offences. Tesco are only pleading guilty because they have run out of options".
Not only did the Judge dismiss Tesco's expert evidence when determining the level of Harm to consumers, the Judge also used Tesco's attempt to run the argument as adding to the seriousness of the offence because the use of expert evidence in the way he perceived it "belittled the law".
Fortunately for Tesco, the Judge did recognise Tesco's overall good record across 2900 stores. This partially offset the factors that increased seriousness.
When it came to finding a starting point for the fine, the Judge was clearly troubled by the turnover categories in the Sentencing Guidelines. The guidelines state that where turnover greatly exceeds that threshold, "it may [emphasis added] be necessary to move outside the suggested range to achieve a proportionate sentence".
The Judge stated that the Sentencing Council desperately needed to provide guidance on how to sentence multi-billion-pound companies. Absent of this, the approach in this case "is simply a matter of finding a figure which brings the message home to the defendant company and to others in the food business".
The entry point for the fine for a £50m plus turnover business based on the assessed level of Culpability and Harm identified by the Judge is £90,000 with a range of £35,000 to £220,000.
He accepted that the fact that Tesco's turnover is not £50m but £50bn (give or take) did not mean that the entry point should be £90m. The figure he started with (without further explanation) was £10m which he increased to £12m due to the seriousness of the number of stores, offences and the conduct by Tesco. He then reduced it to £10.8m for mitigation. Perhaps surprisingly, given his comments about the reluctant guilty plea, he a gave 30% credit for guilty pleas to arrive at a figure of £7.56m plus prosecution costs of £95,500. No doubt Tesco's defence costs were somewhat higher.
Tesco may well agree with the Judge that guidance would be helpful for Magistrates Courts when exercising unlimited sentencing powers. They may also consider there to be grounds for appeal against sentence.
Lawyers will watch this with interest, (and we will update you if there are developments), but in the meantime retailers and their lawyers will no doubt weigh the Judges remarks into their thinking when deciding on tactics when responding to enforcement.
As stated at the outset, the more positive response is to avoid getting into that predicament in the first place. If nothing else, this case is a reminder of the value of keeping on top of procedures to ensure out of date food is removed from the shelves.
If you would like more detail on the specific legal points or practical advice on implementation and response, please get in touch.