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The Corporate Manslaughter Act The Corporate Manslaughter Act

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Jul 15

The Corporate Manslaughter Act

The Corporate Manslaughter and Corporate Homicide Act 2007 established a new statutory offence of corporate manslaughter (corporate culpable homicide in Scotland).

An organisation is guilty of the offence if the way in which it manages or organises its activities causes a death and amounts to a gross breach of a relevant duty of care to the deceased. A substantial part of the breach must have been in the way activities were managed by the senior management of the organisation.

The new offence builds on the responsibilities that employers and organisations already owe to their employees and members of the general public, with regard to the premises they occupy and the activities they carry out.

Previously, an organisation could only be convicted of manslaughter if a ‘directing mind’ – i.e. a senior manager or director – was also personally liable. However, this did not reflect the reality of the way decisions are made in large organisations and there were very few prosecutions as a result. The new offence is concerned with the corporate liability of the organisation itself, allowing this to be assessed on a wider basis and providing greater accountability for serious management failings across the organisation. It will continue to be possible to bring prosecutions for gross negligence manslaughter against individuals, where there is sufficient evidence and it is in the public interest to do so.

When determining whether an organisation is guilty of the new offence of corporate manslaughter, the courts will look at management systems and practices across the organisation and whether an adequate standard of care was applied to the fatal activity. Juries will be required to consider the extent to which an organisation was in breach of its health and safety requirements and how serious those failings were. They will be able to consider the culture that exists within an organisation regarding health and safety issues. Lax management attitudes that result in a lower standard of care than could reasonably be expected will be punished.

An organisation convicted of the new offence may receive:

  • an unlimited fine;
  • a publicity order requiring an organisation to publicise its conviction and certain details of the offence; and
  • a remedial order requiring the organisation to address the cause of the fatal injury.

The sentencing guidelines state that ‘fines for companies and organisations found guilty of corporate manslaughter may be millions of pounds and should seldom be below £500,000. For other health and safety offences that cause death, fines from £100,000 up to hundreds of thousands of pounds should be imposed. In deciding the level of fine, account must be taken of the financial circumstances of the offending organisation.’

As is usual with new legislation, cases brought under the Act took a while to reach court, with the first prosecutions involving small companies.

More recently, Lion Steel Equipment Ltd., which manufactures storage products, was convicted following the death, in May 2008, of one of its employees, Steven Berry, who fell through a plastic roof at an industrial unit in Manchester. The company had 142 employees, and over the three years from 1 October 2008 to 30 September 2011 its turnover was in the region of £10 million per annum, with a profit before tax of between £187,000 and £317,000.

The company was fined £480,000, which is the largest fine levied under the Act to date, even though the guidance on sentencing refers to a fine of less than £500,000 seldom being appropriate after a conviction. The fine is payable in four instalments with the final payment due in September 2015.

Several factors were taken into account in determining the level of the fine, including the timeliness of the company’s guilty plea and the financial position of the company. The judge commented, “I would regard it as a most regrettable consequence, which would add to the terrible consequences of Mr Berry’s death, if the effect of an order of this court were to imperil the employment of his former colleagues and those who would have been had he lived.” The judge was satisfied by an accountant’s report that a fine of more than £100,000, payable in a short period, could have a serious impact on the viability of the business. On the other hand, the judge was of the view that the commission of the offence did require a significant punishment and was satisfied that, with a longer payment period, a loan could be raised on the buildings.

In a further case, which concerned the death of an 11-year-old child who was hit by a speedboat whilst attending a friend’s birthday party at a lake, the company that operated the leisure site pleaded guilty to charges under the Act.

Charges against one of the company’s directors were dropped.

After hearing that the company had a ‘lax attitude’ to health and safety and that the speedboat driver had no recognised qualifications, the decision of the judge was to fine the company ‘every penny it has’ – £135,000 including costs.

In the sixth prosecution under the Act, Mobile Sweepers Ltd. entered a plea of guilty to a charge of corporate manslaughter following the death of a casual worker in an accident at its premises in Reading.

The 56-year-old man, who had worked for the company on and off for 15 years, had no training in mechanics but had been asked to carry out an emergency repair to a road-sweeping machine. In doing so, he inadvertently removed a hydraulic hose, which caused the raised hopper for collecting dirt to fall on him. He suffered serious head and chest injuries and died almost instantly.

Winchester Crown Court heard that an investigation into the man’s death had revealed a number of serious defects in the company’s health and safety procedures which contributed to the accident.

The company was fined £8,000 and ordered to pay a further £4,000 in costs. In addition, the director of the company was fined £183,000. Failure to pay the fine within 12 months will lead to a three-year custodial sentence.

The director, who formed a new company to carry on a similar trade on the day of the accident, was also disqualified from acting as a company director for five years.

Two more companies have recently pleaded guilty to charges of corporate manslaughter under the Act.

In the first case, a sawmill company in Northern Ireland, A Diamond and Son, was fined £75,000 and ordered to pay £15,832 in costs for breaches of health and safety law that led to the death of one of its employees in September 2012. The 54-year-old employee was carrying out a repair to a large sawmill machine without its having been isolated from all power sources. The machine moved and crushed him. Safety guards preventing access to dangerous parts of the sawmill were not in place, the electrical safety key for the safety gates had been disabled and the mill workers who used the machine had not been trained how to operate it in maintenance mode. However, the judge accepted that the breaches resulted from ‘human failings’ rather than cutting corners in order to increase profits.

In the second case, a building and joining firm, Peter Mawson Limited, was fined £200,000 for the corporate manslaughter offence and a further £20,000 for a breach of the Health and Safety at Work etc. Act 1974 after a 42-year-old employee died as a result of falling through a roof at the farm premises where he was working, landing on a concrete floor 7.6 metres below. The skylight was known to be fragile yet no equipment was provided to prevent workers falling through it. The owner of the company also pleaded guilty to the charge of failing to ensure the safety of employees and was given an eight-month prison sentence, suspended for two years, 200 hours’ unpaid work and ordered to make public details of the offence via the company website and in a half-page advertisement in the local newspaper. He was also ordered to pay costs of £31,505.

These cases show that that the courts will take very seriously breaches of health and safety laws that lead to someone being killed. Employers are advised to keep their procedures under review, especially those with direct health and safety implications. Successful defences to charges of corporate manslaughter will inevitably depend on being able to prove that the organisation takes a responsible attitude to health and safety, with appropriate risk management procedures in place that are enforced rigorously.

Source: Commercial

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