The first prosecution
The Corporate Manslaughter and Corporate Homicide Act 2007 ("the Act") introduced a new offence imposing criminal liability on companies and other organisations where there has been a gross failing in the management of health and safety with fatal consequences.
In the first case brought under the Act, Cotswold Geotechnical (Holdings) Ltd was charged under the Act in connection with the death of its employee Alex Wright at Brimscombe near Stroud in Gloucestershire in 2008.
Following a trial at Winchester Crown Court, the company was convicted of corporate manslaughter on 15th February 2011.
The Offence
The Act creates a new criminal offence of corporate manslaughter and replaces the common law offence of manslaughter by gross negligence for companies. Previously, before a company could be convicted of manslaughter a "directing mind" of the organisation (that is a senior individual who could be said to embody the company in his actions and decisions) also had to be guilty of gross negligence.
Under the Act, an organisation is guilty of the offence of corporate manslaughter if the way in which its activities are managed or organised causes a person's death and this amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased. A "relevant duty of care" in relation to an organisation includes an employer's duties to his employees and an occupiers' duty to visitors. The Act does not create new duties of care; the new offence is based on the existing civil law of negligence. It is for the Judge and not the jury to decide whether a duty of care is owed.
A breach of a duty of care is "gross" only if it falls far below what can reasonably be expected of the organisation in the circumstances. In determining this the Act sets out certain factors that the jury must take into account namely:-
- Whether the organisation was in breach of health and safety legislation;
- How serious was the management failure;
- How much of a risk there was of death occurring
The Act also sets out a non-exhaustive list of factors that a jury may take into account including any health and safety guidance relating to the breach and whether there were any attitudes, policies, systems or accepted practices in the organisation that were likely to have encouraged a management failure.
A substantial part of the breach must have been in the way that the activities were managed by "senior management". Senior management means people who play significant roles in the making of decisions about how the whole or a substantial part of the organisation's activities are to be managed or organised or people who are actually managing or organising the whole or a substantial part of those activities. Exactly who is a member of an organisation's senior management will depend upon the nature and scale of the organisation's activities. Directors and similar senior management will always be senior management. Regional managers in national organisations and managers of different operational divisions could also constitute senior management for the purposes of the Act.
It is not necessary to show that the management failure was the sole cause of death. The prosecution need only show that "but for" the management failure, the death would not have occurred.
The Cotswold Geotechnical Case
Cotswold Geotechnical's "senior management" consisted of Peter Eaton. He was the sole director as well as a major shareholder in the company.
Initially Mr Eaton was also charged personally, with manslaughter. This charge was dropped in 2010 on grounds of Mr Eaton's ill health.
To convict the company of corporate manslaughter, the prosecuting authority had to show that the way in which it was managed:
- caused Mr Wright's death and
- fell far below what could reasonably be expected in the circumstances
The following important facts emerged during the trial:
- Mr Eaton had been at the site but left before the accident. Mr Wright was left alone to "finish off", with others working nearby (but with no view of what was happening).
- The pit that Mr Wright entered was more than 3.5m deep and its sides were not supported.
- The pit collapsed and Mr Wright died.
- Mr Eaton was too ill to give evidence. In a statement read to the Court he said that he was "astonished" that Mr Wright had entered the pit after he left site.
- The Court was shown a DVD of Mr Eaton's police interview.
The interview confirmed that
5.1. The company's Health and Safety policy document was written by Mr Eaton in 1992 and had not been updated since;
5.2. The company had been "using the same procedures" to dig trial pits since 1971;
5.3. There is well recognised industry guidance that prohibits entry into pits and trenches that are deeper than 1.2 metres unless the pit/trench is properly supported. The company's policy did not clearly state that staff should not enter such pits. Mr Eaton considered that geologists like himself and Mr Wright were competent to assess whether this guidance was applicable to a particular trench.
5.4. Mr Eaton said that his health and safety record should be judged by the actions of his staff and not the quality of his paperwork on the subject. - Cotswold Geotechnical had been warned about allowing employees to enter unsupported pits in 2005.
Penalties
Penalties under the new Act can include:-
- Fine;
- Publicity Order which requires the organisation to publicise the fact of its conviction and certain details of the offence in a way specified by the Court, e.g. in an annual report or a letter to customers;
- Remedial Order which requires the organisation to address the cause of a fatal injury
Guidelines for sentencing under the Act were published by the Sentencing Guidelines Council in 2010. Factors identified which affect the seriousness of the case include how foreseeable was serious injury, how far short of the applicable standard did the Defendant fall, how common was the kind of breach in this organisation and how far up the organisation did the failure go. The offence may be aggravated if there has been more than one death/additional injuries and/or a failure to heed previous warnings or advice by the Health & Safety Inspectorate or employees or where the failure was due to cost cutting measures and/or the injury was to a more vulnerable person. Conversely, factors which would mitigate sentence include prompt acceptance of responsibility, high level of cooperation with investigation, genuine efforts to remedy the defects, a good health and safety record and a responsible attitude to health and safety.
Whilst the same standard of behaviour is expected of both small and large organisations, the means of the Defendant are relevant to the level of the fine. The court should look carefully at both turnover and profit as well as the assets of the organisation. A wealthy Defendant should pay a larger fine than a poor one. The fine is intended to "inflict painful punishment" but it should be a fine that the Defendant is capable of paying, perhaps over a number of years. In assessing the level of fine, the court should consider the effect on the employment of the innocent; for example if the company/organisation were forced to cease trading, innocent employees would lose their jobs. Shareholders, directors and prices charged will not normally be relevant although the provision of public services may be relevant. The guidelines suggest that the appropriate fine will "seldom be less than £500,000 and may be measured in millions of pounds".
Cotswold Geotechnical's sentence
The company was ordered to pay a fine of £385,000 in annual instalments over the next 10 years. This figure reflected the very small size of the business. It is notable, however, that the Judge expressly recognised the possibility that it may lead to the company having to go into liquidation. He said that this would be unfortunate, but the possibility was an unavoidable consequence of the seriousness of the breach.
Comment
This is an important case, as it is the first prosecution under the Act. Its success may encourage the authorities to use it more frequently. However, it is not the type of case for which the legislation was introduced. Because the company was a small one, with a single "directing mind", it would have been equally susceptible to prosecution under the old law. It might therefore be regarded as a soft target.
It remains to be seen to what extent the Act can be successfully applied to the larger organisations for which it was designed.
As for the level of fine, whilst this was below the £500,000 suggested minimum, it is still sufficient, given the small size of the company, to act as a powerful deterrent. It shows that the Courts are willing to apply the full rigour of the sentencing guidelines, which expressly contemplate the possibility that in "bad" cases the fine might result in the liquidation of a business.
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