We all have our different opinions on the need for fire extinguishers, but fortunatly the law is quite clear. You need them.
In terms of what size of fire should be tackled, I would let the employees make their own judgement based upon their training.
If a person is on fire, and this does happen, a fire extinguishser or blanket will be needed. Likewise if their escape route is blocked.
Extinguishers are not just for the protection of escape routes, the Part 3 of BS 5306 makes this quite clear.
Sufficient numbers of employees should be trained in their use, as per the Workplace Regs.
That the bin may have plastics and is giving off fumes would not change my opinion on the need to put out the fire. I would expect this would be done fairly rapidly, but again the employee will make this decision based on their training and the circumstances.
Not all buildings have sterile escape routes, in fact many don't. Not all have compartmentation as per the Building Regs (for example any school that was built before Building Regs applied to schools). In some buildings a very small fire, left unchecked could grow and then spread before everyone gets out. Indeed this is what appears to have happened in the two recent prosecutions in Manchester.
I know there is a trend to tell people to ignore fire extinguishers, but they are there for a purpose, they have been successfully used for many years to put out fires. As Essex Fire Brigades stats. suggest, 90% of fires are put out before the brigade get there, this is many thousands of fires, I am not aware of statistics that suggest there are high numbers of injuries or deaths from people who try to put fires out.
We live in a soceity where employers are trying their best to eliminate all forms of risks, but by stopping people putting out fires, I think we are creating bigger risks.
Are you aparent assumptions that there is anacceptanble risk of injury to people who put out fires based on any evidence or statistics?
As for attending court, if you are willing to ignore the requirements of the workplace regs, that may just be what you have to do.