Just over a year since the Corporate Manslaughter and Corporate Homicide Act 2007 (the Act) came into force on 6 April 2008, the Crown Prosecution Service has authorised a charge of corporate manslaughter against a small family business, Cotswold Geotechnical Holdings Ltd, together with Health & Safety at Work Act charges arising from the death of an employee Alexander Wright. In 2008 Mr Wright, who was employed as a junior geologist, was crushed when the sides of an excavated pit collapsed whilst he was collecting soil samples.
Providing a firm reminder that gross negligence manslaughter has not gone away, a company director, Peter Eaton, has also been charged with that offence together with an offence contrary to s.37 of the Health and Safety at Work etc Act 1974. Mr Eaton is due to appear at Stroud Magistrates' Court on 17 June facing charges as an individual and on behalf of the company.
An organisation is guilty of corporate manslaughter if the way in which its activities are managed or organised causes a person's death and amounts to a gross breach of a relevant duty of care owed to the deceased. A substantial part of the failure within the organisation must have been at a senior level.
A conviction for gross negligence manslaughter carries a maximum sentence of life imprisonment, whilst a conviction for corporate manslaughter against an organisation attracts an unlimited fine. If the Sentencing Advisory Panel's sentencing recommendations are implemented, it is expected that the starting point for a fine for corporate manslaughter committed by a first-time offender pleading not guilty, should be five per cent of their average annual turnover for the three years prior to sentencing. The court should then take into account aggravating or mitigating circumstances, arriving at a fine which is likely to fall between 2.5 to ten per cent of turnover. The Act also allows the court to make a publicity order requiring a business to publicise its failures and any remedial action required.
Since April 2008 the HSE have recorded 228 fatal accidents at work. It is to be anticipated that a number of corporate manslaughter investigations are presently underway and likely to result in prosecution. The police take the lead in these investigations with significant input from the HSE. It was estimated by the government that they would not expect to prosecute more than 3-4 cases per year. The outcome of these investigations will be awaited with interest.
It is perhaps surprising that the CPS did not target a larger organisation for the first prosecution with the potential for a multi million pound fine. Disappointing also as this would have provided some useful guidance on how the Act will be applied to larger UK businesses, in particular illuminating the application of phrases such as "senior management" and "management failure". This may reflect the historical tendency to target those organisations where senior management and the chain of decision making are more readily identifiable, making a prosecution more likely to succeed. Certainly in this case the directors in such a small company would have been closely associated with the day to day running of the business, making it relatively easy to identify a controlling mind under the pre-Act provisions. It should be remembered that the purpose of the Act was in fact to remove the obstacles to establishing gross negligence such as the identification of a controlling mind. Always a difficult exercise in larger organisations with more complex management structures. For this reason the majority of successful prosecutions pre-Act involved small businesses, suggesting the new legislation has made little progress one year on from its introduction.
This prosecution does however stress the importance of organisations taking the opportunity to review management systems as well as their health and safety procedures. Directors are advised to check that they have adequate liability insurance to cover individual investigations and prosecutions.
For further information please contact Suzanne Day.
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Source: Beachcroft LLP 30/04/2009
Beachcroft Insurance Litigation Alert is published on a general basis for information only and no liability is accepted for errors of fact or opinion it may contain. Professional advice should always be obtained before applying the information to particular circumstances.
