Corporate Manslaughter – Your Personal Risk

From our H&S practitioner, the following piece is aimed at helping Companies and individuals avoid risks associated with the new corporate manslaughter legislation.

Corporate Manslaughter Act – plea hearing postponed to October 2009 with a trial date of February 23rd 2010.
The first charge to be brought into the Courts in respect of corporate manslaughter was instigated on 23 April 2009 when the CPS authorised a charge of corporate manslaughter against Gloucestershire-based Company, Cotswold Geotechnical Holdings, over the death of a 27-year-old employee -

Mr. Wright, a junior geologist. He was killed in September 2008 when the sides of the pit in which he'd been collecting soil samples collapsed and crushed him under several tonnes of mud. The Emergency Services were unable to recover his body for two days.

As well as corporate manslaughter, Cotswold Geotechnical Holdings has been charged with breaching Section 2(1) of the Health and Safety at Work Act (HSW Act) for failing to protect Mr. Wright.

The Company’s sole Director has personally been charged with gross negligence and manslaughter under a breach of Section 37 of the Health and Safety at Work Act. It states that where a Company's offence “is committed with the consent, or due to the connivance or neglect of a Director, the Director will also be guilty of that offence”.

The reviewing lawyer at the CPS Special Crime Division, said at the time: "Under the Corporate Manslaughter and Corporate Homicide Act 2007 an organisation is guilty of corporate manslaughter if the way in which its activities are managed or organised causes a death and amounts to a gross breach of a duty of care to the person who died.

"A substantial part of the breach must have been in the way activities were organised by senior management.”

Cotswold Geotechnical recorded a turnover of £330,000 in 2008. The offence carries the potential for an unlimited fine, but draft guidance has suggested fines of between 5% and 10% of a convicted company's turnover.
As this is a landmark case, it is being tried in the Crown Court rather than a Magistrates Court. At a hearing on 19th August, the plea hearing was adjourned until the middle of October, with a trial date set for February 23rd 2010.
The gross negligence manslaughter charge carries a maximum sentence of life imprisonment.

The Corporate Manslaughter Act: A Brief Summary

The Corporate Manslaughter Act came into force in April 2008, after much protracted discussions prior to its introduction. The Act itself did not introduce any new observations or safety requirements over and above those already addressed in the Health & Safety at Work Act, and the Duty of Care Regulations. However……..the basis of the change is that the old common law offence of manslaughter was confined to individuals or corporate bodies, with the onerous requirement to prove the personal and individual guilt of manslaughter of one of the "controlling minds" at the highest levels of management. The new Act extends this from individuals and corporate bodies to include sole traders and partnerships, as well as collective bodies such as trade unions, police forces and government bodies. There are no exceptions for the size of organisation.

The rationale behind the corporate manslaughter offence is the acknowledgement of socially unacceptable attitudes to risk management at leadership level within organisations. The Act does not require proof of any individual being guilty of an offence (as did the old law); it does allow for the aggregation of a series of collective errors which together conclude that companies are organisationally criminally deficient. The offence is aimed at systemic failures to manage safety and risk in organisations.
Safety consultants could be included among defendants - as suppliers of a service - if their advice or inspections are found to be deficient.

Addressing health & safety issues should not be seen as a regulatory burden and effective management brings other benefits, aside from reducing the risk of prosecution. These benefits include:
Having a systematic and consistent approach to risk management. You work out the best way to handle each key activity and make sure that everyone uses the same approach, every time – practice makes perfect.
Improved health and safety performance reduces costs associated with accidents and incidents. Efficient systems save costs too.
Improved awareness of regulatory requirements reduces the chance of unwittingly committing any offences.
Relationships, morale and productivity improve when employees see that Managers are actively looking after their health and safety.
Demonstrating a responsible attitude towards employees improves company image and can generate positive PR for your business. Investors will have a greater degree of confidence.
Insurance premiums may be lower for companies able to demonstrate that risks are effectively controlled.