02 February 2011
The Corporate Manslaughter and Homicide Act 2007 came into force on 6 April 2008 and applies to the whole of the UK. The Act introduces the statutory offences of corporate homicide in Scotland and corporate manslaughter for the rest of the UK.
Under section 1 of the Act, a company is guilty of either offence if the way in which its activities are managed or organised causes a person’s death, amount to a gross breach of a relevant duty of care owed by the company to the deceased and is a substantial element in the breach of the duty of care.
The Act was designed to address the difficulties prosecutors North and South of the Border have faced in securing convictions under common law due to the requirement to identify the “guilty mind” of the company.
The recent corporate manslaughter conviction of Cotswold Geotechnical Holdings at Winchester Crown Court is the first conviction of a company under the Act and potentially heralds a new dawn.
The tragic circumstances of this incident were that a junior geologist employee had been taking soil samples from inside a pit that had been excavated as part of a site survey. During this exercise the sides of the pit collapsed, burying the employee in soil. By the time the rescue team reached him, he had suffered fatal crushing injuries.
The sentencing judge described the company’s failures as a “grave offence” and imposed a fine of £385,000. Described in Court as being in a “parlous financial state”, it was submitted on behalf of the company that a larger fine would force it into liquidation and that four people would lose their jobs. The sentencing judge allowed the company 10 years to pay the fine at £35,500 per annum but nevertheless accepted that liquidation may still be an unavoidable consequence.
The case serves as a sobering reminder to companies who permit employees to engage in “wholly and unnecessarily dangerous activities”, who ignore well-recognised industry guidance and who fail to update their own risk assessments.
It does not however fully test the Act’s effectiveness in holding large organisations with complex management structures to account, as the company was run by a sole director and had a clear management structure. Nor does the case fully demonstrate the range of sentencing options available to the Court. The company could have found themselves subject to publication orders requiring them to disclose their corporate manslaughter conviction which, for many businesses, may leave an indelible stain which could be more damaging in the long term than a fine.
How soon the first corporate homicide conviction will follow North of the Border is anyone’s guess. In the meantime, bto fully anticipate renewed investigatory vigor on the part of the relevant authorities in considering the actions and responsibilities of senior management.