Corporate manslaughter – an update
The Corporate Manslaughter and Corporate Homicide Act came into force on 8 April 2008, which simplified the path to successful prosecution of a…
The Corporate Manslaughter and Corporate Homicide Act 2007 (the Act) came into force on 8 April 2008, which simplified the path to successful prosecution of a company and was intended to increase corporate manslaughter convictions - something rarely occurring under the common law.
The difficulties in convicting a large corporation under the common law offence were highlighted by a number of high profile incidents resulting in significant fatalities including the Herald of Free Enterprise ferry disaster and the Hatfield train crash.
Manslaughter prosecutions against the companies failed in both cases, one of the main reasons being that various acts of negligence could not be attributed to any individual being a "controlling mind" of the company. This was the necessary pre-requisite for liability at common law and consequently prosecutors instead tended to pursue smaller companies with owner/operator management.
The Act was brought in to change the "controlling mind" requirement, focusing instead on how an activity is managed and the adequacy of those arrangements across the organisation. A company commits corporate manslaughter if the way in which its activities are managed or organised (1) causes a person's death; (2) amounts to a gross breach of the company's duty of care to that person (gross negligence); and (3) a substantial element of the gross negligence derives from the way the company's senior management had managed or organised the company's activities.
Since the Act came into force there have been a number of prosecutions, most resulting in convictions. One that did not, nevertheless resulted in a successful prosecution under the Health and Safety at Work etc. Act 1974 ("HSWA"). Charges under HSWA are often also levied against a company (and/or its directors), with the reverse burden of proof under HSWA making for a far higher chance of a successful conviction.
The first successful corporate manslaughter conviction was in 2011, against Cotswold Geotechnical Holdings Ltd in relation to a construction accident caused by operating a system of work for digging trial pits that was unnecessarily dangerous and ignored recognised industry safety guidance. The company was fined £385,000. It was however a small owner managed company, employing only 8 people, and therefore likely to have been successfully prosecuted under the common law offence in any event - so little changed at this juncture.
Many of the cases that initially followed were similar. Following the Cotswold Geotechnical case there have been six convictions for corporate manslaughter, including:
- an agricultural company where the director of the company was driving the forklift truck which caused the death of a worker was fined £187,500;
- a sole director road sweeping company with assets of only £12,000 which pleaded guilty and was fined only £8,000 due to its lack of assets (although the director was also convicted under HSWA, fined £183,000 and disqualified for 5 years);
- a sporting club, which no longer exists, pleaded guilty following the death of an 11 year old girl in a banana boat accident and was fined £134,579; and
- a small construction firm where an employee was killed when a two tonne limestone slab fell when it was being lifted into position (company yet to be sentenced).
As such the largest prosecution to date remains the case of Lion Steel Equipment Limited in 2012. In addition to prosecuting the company for corporate manslaughter, three of its directors were also prosecuted for gross negligence manslaughter (with HSWA offences also charged). Although this was a larger company, with multiple sites and over 100 employees, it was still a company where the directors had a very direct role in management – as indicated by their gross negligence manslaughter charges. Lion Steel was fined £480,000 with the charges against the individual directors dropped following the company's guilty plea.
More recently, there have been the first two acquittals against charges brought under the Corporate Manslaughter Act:
PS & JE Ward Limited– a small, single site flower nursery with fewer than 50 employees was charged with corporate manslaughter (as well as offences contrary to HSWA) following the death of an employee from an electric shock. Directors of the company were directly involved in undertaking the same task which led to the employee's death. In April 2014, the company became the first to be cleared of corporate manslaughter, due in part to the employee acting of his own initiative, independent of company instructions. The company was convicted under HSWA, rather than the Corporate Manslaughter Act, in relation to the death and fined £50,000.
MNS Mining – in June 2014, a mining company was acquitted of four counts of corporate manslaughter following the death of four employees resulting from ingress of water at a mine in September 2011. The manager of the mine was also charged with gross negligence manslaughter for allegedly failing to conduct adequate inspections. Both the company and the manager were acquitted on the factual evidence of a geologist who cast doubt on when the water which killed the men would have become evident.
As can be seen from this summary of convictions and acquittals, the cases so far have been concluded against small and medium companies, often where directors of the company are hands-on in the activities which led to the death. This may not, however, tell the full story.
In the past year there has been a significant increase in the number of corporate manslaughter prosecutions and it is thought that there are around 50 active cases currently being considered for prosecution. Investigations into fatalities are typically long running and we may only now be starting to see the outcome of an increasing use of the legislation since its introduction. For example, the MNS Mining case mentioned above relates to an incident in 2011 but was not brought to court until June this year.
Although the majority of the successful prosecutions to date have been against companies with simple management structures, it is likely that the current impetus will lead to larger companies being targeted in line with the aims of the legislation. Although fatalities due to the actions, or inactions, of large corporations happen with unfortunate regularity, the legislation is still yet to be tested on a company of any reasonable size. When it does, the potential consequences are significant with adverse reputational impact and the Sentencing Guidelines stating that fines for organisations found guilty of corporate manslaughter may be in the millions and should seldom be below £500,000 (excluding substantial prosecution costs).
What remains important to companies of all sizes is to ensure that there is a responsible and proactive approach to safety management in place which is led from the board, and with a demonstrably up to date and suitably documented safety management system.