SENTENCING STATEMENTS

On sentencing, the Sheriff made the following statement in Court:

“The accused company is the owner and operator of Cameron House Hotel at Loch Lomond and pled guilty on indictment in relation to two separate offences in terms of the Fire (Scotland) Act 2005. The offences are, to a large measure, identical but specify the provisions of the Act dealing with employees and others for whom the company had an obligation to take such fire safety measures as were reasonable. In the main these others were the hotel guests. The consequences of a fire which took place at Cameron House Hotel on 18 December 2017 were significant in relation to fire damage to the structure of the hotel. The events were inevitably alarming and harmful to all those present on the premises including many guests as well as staff. The outcome was catastrophic for two guests, Simon Midgley and Richard Dyson who, as a consequence of the smoke and gases produced by the fire were unable to escape from the premises and tragically lost their lives.

One employee, a night porter at the premises, has also pled guilty to an offence concerning the fire where he accepted responsibility that he failed to take reasonable care of the health and safety of persons affected by his acts including the guests of the hotel. 

It was his act that, after he had cleared ashes and embers from a log fire in the reception area, he left these in a polythene bag in a cupboard. Sometime shortly thereafter these ashes and embers ignited a fire which began in the cupboard and then spread to the rest of the hotel. 

An examination of the tragic circumstances appropriately, and inevitably, focused on the way in which the company conducted its business and in particular whether it had regard to health and safety legislation in general and in particular the obligations imposed by the Fire (Scotland) Act 2005. The company was obligated to take fire safety measures necessary to ensure the safety of employees and separately to take such measures which were reasonable for the company to take to ensure the safety of hotel guests. The company have pled guilty to the indictment before me in respect of failures in three separate ways. Firstly that they failed to have a safe system of work in respect of removal and disposal of ashes and embers from fires including that metal bins which came to be used for the storage and disposal of the ashes were properly maintained and emptied; secondly that they failed to ensure that employees were given instruction, training and supervision in the safe removal and disposal of the ash and embers; and thirdly that they failed to keep cupboards containing potential ignition sources free of combustibles. In essence, the night porter had never been told how he should gather the ashes and embers and where he should put them. Metal bins at the rear of the premises which were routinely used and which would have provided for safe disposal were, on 18 December, already full and the night porter knew this. The arrangement for the provision of these bins was not effectively organised and structured and whatever limited arrangement had been in place had ceased to function as far back as October in 2017. 

In 2016, fire risk assessors who were properly and appropriately instructed by the company to make an assessment of the fire risks in the hotel observed that there was no written policy covering the emptying of the open fires. A clear recommendation was made that a written policy should be developed which could then have been made available to all employees and others.

I was told that the resort manager of the company delegated this recommendation to the deputy general manager of the hotel. That individual did not delegate the preparation of a written procedure to anyone else due to, what I was told, his apparent understanding that there was not an issue involved in relation to removal of hot ashes. I do not consider that it is only hindsight that would have led to the obvious conclusion that that approach was flawed. 

In any event, at a further assessment in 2017, the same fire assessors highlighted that the written procedure, which they had earlier recommended, had still not been implemented.  For reasons which I cannot grasp, this situation was challenged by the resort manager and a risk and safety manager. Such was their influence in challenging it that the fire safety assessors succumbed and produced a revised report. I am told that the situation proceeded on the basis that the resort manager had made a wrong assumption that such a procedure was properly in place. I do not understand why the simple and obvious course of action of obtaining and considering the recommended written procedure was not the course of action taken rather than a senior member of staff making assumptions. In the absence of any formal procedure, individual members of staff had no option but to deal with matters as they thought best. The indictment, in addition to the events of 18 December leading to the fire, make reference also to events of 15 December when night porters, removed ash and embers from fires and put these into polythene bags containing water. This was not an appropriate course of action. A more senior member of staff castigated these members of staff for acting in this way. Tragically what did not follow from that was a proper consideration of why the staff members were acting as they did by reference to what should have been an appropriate safe system. No additional instructions were given to staff at that stage nor was the absence of any written set of instructions highlighted. 

In relation to the removal of ash and embers from the hotel building and their deposit in metal bins outside the premises there was clearly information that this was a habitual course of action for staff members and indeed the night porter, who on 18 December put the bag in the cupboard was aware, in advance, that the metal bins at the rear of the premises were full and unable to store more ashes. The provision in relation to these bins, their maintenance and emptying, was entirely reliant on communications between individuals simply doing what they thought best and the fact that a change in a particular employee resulted in what practice there was simply stopping illustrates to me, and in my view ought to have illustrated to anyone who had appropriate regard to the fire safety of the premises, that the whole regime ought to have been the subject of proper and managed attention. 

The other essential and catastrophic element which materially influenced the development of the fire was that the cupboard in which the employee placed the ashes and embers had within it kindling, cardboard and newspapers all of which are readily combustible and contributed to the fire taking hold in the cupboard and developing from there. The culpability of the company arises from that general situation which illustrated an unsafe system of work amplified by the fact that on two occasions earlier in 2017 the Scottish Fire and Rescue Service (SFRS), in fulfilling their statutory responsibilities in relation to fire safety, carried out an audit of the hotel and highlighted that these materials were stored in this cupboard which had another source of potential ignition of fire in the form of an electrical installation apparatus. Informed by that, the Fire and Rescue Service directed that it was unacceptable to have combustible material stored adjacent to a potential source of ignition. That instruction also made clear the danger of fire spreading rapidly through the building due to its age and highlighting that, because of the threat of voids in the structure, smoke and gases could spread in an irregular way. While some action was taken by the company in response to this, the action was ill-focused, unsatisfactory and ineffective.

In respect of the materials in the cupboard, I was told that assurances were given to SFRS in August 2017 that the combustibles would be removed from the cupboard. I was advised that the resort manager brought this issue to the attention of the relevant managers in the premises but in doing so, regrettably and in my view unacceptably, omitted reference to the fire risk of storage of combustibles. It simply narrated “concierge cupboard to be tidied…”

The issue was specifically raised again in November 2017 in a letter addressed to the resort manager by the Scottish Fire and Rescue Service. That included the full findings of the audit in 2017. The task of dealing with combustibles in the cupboard was again delegated, in this case, to the general manager of the premises who himself, appropriately, examined the cupboard and noticed combustible materials, mainly newspapers, on a shelf adjacent to the electrical installation apparatus which had been identified by SFRS as a potential source of ignition of fire. Appropriately again he took photographs of this and conveyed these with an email to staff with the instruction “can you make safe and speak to team, highlighted previously by fire safety inspection and evidently still an issue.” Superficial importance was given to the issue because later in the day the general manager spoke to the assistant head concierge but did nothing other than request that the newspapers be removed and that the shelf in the cupboard be kept clear. A request was made back to the general manager whether newspapers could be stored on the floor in the cupboard and permission was given. It is clear that the general manager’s general comment “make safe” was diluted and translated simply to an exercise of tidying and not removing the sort of combustible materials which, since they remained present on 18 December allowed the catastrophic fire to take hold and develop. There were, I was told, repeated instances of leaflets, kindling, newspapers and other materials being in the cupboard and, in particular on 16 December, I understand that four bags of kindling were deposited in the cupboard. 

On behalf of the company, I was told that the events set out in the indictment were a matter of concern and remorse in equal measure. I was asked to accept that the organisation took its general health and safety responsibilities very seriously and to illustrate that I was told that a director of the company had personally attended court even in the context of the present Covid regulations. It was emphasised that the company sought annual assessments by appropriate fire assessors as part of the general compliance with health and safety legislation and it was suggested to me that “a detailed suite of measures” were in place designed to address the various risks that might exist and which had to be guarded against. I was told that there was in addition a process for monitoring and auditing the fire safety regime. Emphasis was placed on the fact that, in general, comments had been made by those who were carrying out assessments of the hotel which highlighted their general perspective that the hotel promoted a positive health and safety culture and that, in general, it was accepted that the company were complying with guidance or recommendations which had been given. Employees of the premises also supported the general perspective that there was compliance. 

It was emphasised that the failings which did occur, notwithstanding the arrangements which were in place were not as a result of a deliberate breach but occurred as a result of a combination of errors and misinterpretation by individuals who were, nevertheless, endeavouring to ensure that the fire safety measures were implemented effectively.

So far as the charges are concerned it was accepted that there was no written procedure for the disposal of ash and embers and that the absence of that procedure provided the opportunity (in my view, the necessity) for those responsible to improvise. This I was told arose from assumptions wrongly made by the resort manager.

However difficult it might be to understand the conduct of the night porter in depositing the plastic bag with ashes in the cupboard, it was nevertheless accepted that if a formal procedure had been in place the risk of individuals improvising or indeed behaving inappropriately would have been addressed.   

In respect of the clearance of the cupboard, it was emphasised to me that the hazard being guarded against was that of an electrical fire not of something arising from anything else. It was suggested that it was in that context that attention focussed on the shelf where the electrical fitting was located, and that shelf was cleared and there was no evidence that thereafter the particular shelf itself was not kept clear. Again I was asked to conclude that this was a genuine misinterpretation of the situation.

To a significant extent, I accept what was said about the overall regime which was in place in the hotel and I accept that in any large operation, such as a hotel, a whole range of health and safety measures in general, and fire measures in particular required to be developed and deployed. It was quite appropriate for these to be informed and guided by specific specialists and it was also inevitable the Scottish Fire and Rescue Service would contribute in terms of their statutory obligation. 

I do not consider that the company simply disregarded advice or recommendations but rather that inputs of this sort were translated or interpreted wrongly or incompletely and that, as eventually passed on to those whose actions mattered, the obligations or the means by how these were best to be met were unclear or ill focussed. Counsel confirmed that a system of auditing was appropriate and necessary and was in place, but, in my view, it is in this area potentially the greatest deficiencies were apparent. I simply did not regard it as acceptable that advice was given by fire assessors that a written set of procedures should be developed for dealing with the ashes and embers from the fire and that this was not done. Worse, on a future review, the fact that that had not been done was again highlighted but senior representatives of the company made the assumption that the situation described was wrong without obtaining and referring to the written guidance which had been recommended. Such a course could have been undertaken very easily. Had that been undertaken then much of what happened on 18 December could not have occurred. The regime in respect of the emptying of the bins and the reliance on a particular member of staff was also in my view quite bizarre, and of course had a written set of instructions been in place then that would also have been clarified and staff identified to undertake the necessary duties. That the habitual measures which seemed to have been safe, fell away simply because of the change of head groundsman, is and ought to have been alarming to anyone effectively monitoring the system of work which should have been in place.

The comments made in August 2017 by the Scottish Fire and Rescue Service in respect of the storage of combustible materials in the cupboard could not have been clearer. The fact that a statement that it was “unacceptable to have combustibles stored adjacent to a source of ignition” become translated to an instruction: “Concierge Cupboard to be tidied…” is unacceptable and while I cannot, nor need not, determine whether the resort manager did not understand the fire safety implications of failing to explain the reasons why removal of combustibles was necessary, it was inevitable that those to whom the instruction was issued could not have had the fire safety implications as their guiding context. The later exchanges between the general manager and the head concierge about storing newspapers on the floor rather than on the shelf beside the electrical box also indicated the disastrous departure from the fire safety imperative of removing all combustibles from the cupboard.  It was very clear that this cupboard was a convenience to the concierge staff where they had ready access to materials which were useful to lighting the fires in the reception area or in the restaurant.  It was also the location where the fire first ignited and it was from there that because of the voids and unusual structure of the building it was able to spread so rapidly outside the confines of that cupboard by which point it was impossible for the fire to be controlled. 

I was further addressed that the company had taken steps to cooperate entirely with the investigation and, in terms of the refurbishment in advance of the reopening of the hotel, significant steps have been taken to improve the general fire regime together with an intensive programme of training of the individuals involved. I am content to accept these circumstances in mitigation in relation to the responsibility of the company.  

Counsel for Cameron House Resort Limited very properly directed me to guidelines prepared by the English Sentencing Council in respect of breaches of duties by employers or occupiers of premises towards their employees or others in terms of the health and safety regulations. Decisions by the High Court in Scotland have confirmed that it is appropriate for Scottish courts to have reference to these guidelines. I was told that there was no specific guidance in relation to the Fire (Scotland) Act but it was accepted both by counsel for the accused and by the advocate depute that the guidelines in relation to health and safety would equally apply in relation to the Fire (Scotland) Act in relation to safety measures concerning fires. 

Inevitably reference to these guidelines involves a series of assessments and measurements in relation to a range of options which are set out in writing and in tables and which involve allocations of particular figures of calculation in grids with reference to increasing and diminishing figures applicable to concepts of culpability and of seriousness of harm and the likelihood of harm. At the hearing of this case on 22 January I sought to indicate to the family of Simon Midgley who were present in court and repeat to them today and to the family of Richard Dyson observing remotely, that the exercise of using guidelines is not any attempt to evaluate a personal catastrophe or loss by reference to such a grid of figures. I extend my comments to those others who were present in the hotel, and who may have sustained injury from the smoke and fire gases in the premises, and who will, to a greater or lesser extent, have been affected by the trauma of the fire and for guests of being evacuated from the comfort and safety of their room. It is simply a helpful and practical means to give assistance to courts in applying penalties and sentences on a consistent basis. That having been said, counsel made appropriate submissions on how I should view the guidelines and the application of those guidelines to the present case. It is not, I think, fundamental in delivering this statement today that I proceed through the details of the guidelines themselves nor indeed counsel’s submissions. I add only that the advocate depute quite properly suggested that I should take a different approach and place the level of culpability and the likelihood of harm in different categories. 

As I understand things, I should have regard to these guidelines, but I should not seek to use them in a mechanistic or formulaic way. I do not consider that they can or should be seen to provide an exact arithmetical process by which the appropriate disposal can be calculated.  Neither counsel nor the advocate depute referred me to specific cases in Scotland in respect of any guidance on an appropriate penalty in this case. I have considered the general guidance of the Court in Scottish Power Generation Ltd v HMA in 2016 but I am unaware of any directly comparable Scottish case.

Whilst not here developing matters in detail, I was asked by counsel on behalf of the accused company to consider that the level of culpability was medium. That was on the basis that I should not conclude that there was a serious or systemic failure within the organisation to address risks. The advocate depute suggested a contrary view and that I should see the culpability level as high. The individual descriptions in the guidelines suggest that within the categorisation of high culpability “ignoring concerns raised by… others” and “allowing breaches to persist over a long period of time” ought to categorise the level of culpability as high. In my view, the true level of culpability might be described as, at the lower end of high or the higher end of medium. 

Counsel then turned to assessment of the level of harm and recognised that the deaths which arose reflected a level A in terms of seriousness of the harm risked, he suggested that the failures of the company when objectively assessed and, setting aside for this purpose the tragic consequences which in fact arose, properly indicated nothing higher than a medium likelihood of harm. He went on to accept that in considering that deaths had occurred and that including employees and guests significant number of people were exposed which may properly elevate the placement in the penalty calculation with the effect being to increase the allocated harm category identified in the appropriate table or alternatively to move the level of penalty up within the original range. 

Counsel accepted that at the conclusion of the process of allocating the various measures to places in tables I had an overriding obligation to consider the general purpose of fire safety legislation and further accepted the terms of the guidance that in setting the level of a fine it must be “sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation”.

In assessing the financial position of the company counsel properly recognised that I should not have regard to the turnover and profit and loss figures only for the years subsequent to the fire (which of course were markedly reduced) but should have regard to the figures in advance of that and he properly made appropriate accounts to me. He was also able to indicate to me the expectation in relation to turnover in the current financial year should it be that the hotel is able to reopen as anticipated. In that respect he suggested the figure may have been in the order of about £15 million. While accepting that may not be very far removed, I observe that the process of renovation and rebuilding of the hotel has increased the capacity of the hotel and it may be realistic to anticipate that turnover would also increase from the pre-fire situation although the extent by which that will happen is very difficult if not impossible to determine at this stage. Using the relevant figures fits the description in the guidance of a medium sized organisation which is an organisation of a turnover between £10 million and £50 million.

In concluding his submissions in relation to the guidance I was asked to consider that none of the aggravating factors set out were present whereas all of the mitigating factors were evident in relation to the actions of the company at the time and thereafter.

The advocate depute made some additional comments in relation to the applicability of the guidelines and as I have already indicated where I should place the company in terms of the appropriate grids and guidance.

As I have indicated I do not consider that the deaths which arose, the harm which affected significant people then and still, the passage of time over which these identifiable failure of fire safety had arisen in circumstances where the company were alerted by two separate expert advisers, would justify me in simply leaving the matter in the range of penalties set out for medium culpability with level 2 harm category. I do not, however, completely discount submissions made by counsel as to the overall extent of the company’s arrangement in relation to fire safety as part of health and safety provision.  I also specifically take account of the absence of any aggravating features as described in the Sentencing Guidelines and the inclusion of all the mitigating features. I include in my assessment the financial information given to me in terms of turnover and profit. I also have regard to the fact that the company had appropriate fire insurance to allow the rebuilding of the hotel, that they had occupier liability insurance which will deal with any civil action which might arise from these tragic events and also had profit insurance, the result of which is likely to be that the company will not have sustained the significant losses in relation to their income which might otherwise have happened.  In these circumstances the obligation of making any fine sufficiently substantial to have real economic impact in my view requires that the penalty move up rather than down. 

In all of these circumstances therefore I consider that the appropriate penalty which I ought to impose in relation to both charges would have been a fine of £750,000. Since the plea was tendered by section 76 procedure and accepted by the advocate depute as being a plea tendered in line with discussions from an early point and where, had the matter proceeded to trial, this would, in all likelihood, have been a lengthy and potentially complex trial involving many witnesses, from a variety of locations and many expert witnesses, I consider that it is appropriate to afford the company a discount in the order of one third from that penalty. I will therefore impose a fine of £500,000.”

29 January 2021