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Corporate Manslaughter Act and its Impact on Organisations

Corporate Manslaughter Act and its Impact on Organisations

13 March 2018

The Corporate Manslaughter and Corporate Homicide Act (The Act) has now been in place since 2007 but what impact has it made in terms of the conviction and punishment of organisations?

Let’s consider the following 4 questions:

  1. Why did we need a new Act? What needs to be proved to secure a conviction?Over the years this has resulted in public pressure being exerted on the authorities and cries of “why aren’t senior people in these organisations being held to account” and “justice has not been served”. As a result, the Corporate Manslaughter and Corporate Homicide Act 2007 was passed.

     

    According to the Corporate Manslaughter Act, an organisation can be found guilty if:

    • The way in which an organisation’s activities are managed or organised...
    • Causes a person’s death
    • Amounts to a gross breach of ...
    • A relevant duty of care owed by the organisation to the deceased

      The Act also states that:

      “An organisation is guilty […] only if the way in which its activities are managed or organised by its senior management is a substantial element in the breach […]”
      It is a crown court offence. The jury needs to decide whether there was a gross breach and consider whether the evidence shows that the organisation failed to comply with health and safety law related to the alleged breach; if so, how serious that failure was and how much of a risk of death it posed.

      The jury may also:
    • consider the extent to which evidence shows that there were attitudes, policies, systems or accepted practices within the organisation that were likely to have encouraged any such failure or to have produced tolerance of it
    • have regard to any health and safety guidance that relates to the alleged breach.
     

    3) What punishment options does the judge have under the Act?

    It must be remembered that The Act applies only to organisations and therefore no individuals will be fined or imprisoned as a result of it. (Personal manslaughter and offences under the Health & Safety at Work Act however can still be used against individuals).

    Once the organisation has been found guilty, the judge can use any/all of the following punishment options:

    • Remedial Order

      Directing the organisation to put right / remedy the causes of the circumstances which led to the fatal incident.
       
    • Publicity Order

      An order which forces the organisation to publicise the fact that it had been found guilty of Corporate Manslaughter.
      One such order (see Fig.1 below) was issued to Mobile Sweepers (Reading) Ltd in 2014.
      This Guide stated factors that needed to be taken into consideration and included the seriousness of the offence:

       

      • how far up the organisation did the offence go?
      • Is the breach common in the organisation?
      • Are there any mitigating factors and the size and nature of the organisation?

      It also stated however that:
      “A fixed correlation between the fine and either turnover or profit is not appropriate”
      and
      “The appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds.”

      Updated guidance: Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline

      However, the courts have now implemented new and updated guidance from the Sentencing Council: “Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline”.
      This came into force in England and Wales for sentencing on or after 1 February 2016, regardless of the date of the offence, following an apparent desire to treat health and safety breaches as seriously as other offences such as financial irregularities.

      Subsequent use of these guidelines appears to be giving the courts greater confidence when deciding the level of fine, resulting in an observed increase in the number of fines exceeding £1million in the last two years.The guideline allows the judge to follow established criteria when deciding the appropriate level of fine, including taking into consideration amongst other things, the turnover of the organisation.

      4) What successful convictions have there been to date?

      Since 2017 to the end of 2017 there have been 25 convictions, four of these in 2017 (see Table 1 in Appendix at the end of the post). Most of these companies have been relatively small in size and the average fine for the first 24 cases was £288,354. The latest case at the time of writing this article (Martinisation, see below) resulted in £1.2M fine.

      It can be said that the successful cases so far gives no interpretive case law, as these cases were all involving small companies and the terms:
      • “gross breach of a relevant duty of care” and
      • “the way in which its activities are managed or organised by its senior management is a substantial element in the breach”

      Arguably they have yet to be tested in a case against a large company with many layers of management and/ or complex structures.

      The one case that has resulted in a fine over £1million is that of HSE v Martinisation (London) Ltd, unreported 19 May 2017, Central Criminal Court:

      • Two workers died in November 2014 when they fell from a balcony while trying to lift a sofa using ropes.
      • The Old Bailey heard that the sofa delivery company had recommended that an external furniture lift was hired at a cost of £848.
      • Company director, Martin Gutaj, replied saying "Unfortunately, we do not have time for all that. Please deliver the sofa and we will get it up to the flat".
      • Gutaj was convicted under HSWA and jailed for 14 months;

      The company was found guilty of Corporate Manslaughter and the Health and Safety at Work Act offences –and fined £1.2M and £72,000 costs.

      So has the Corporate Manslaughter Act achieved its aim?

      Whilst The Act was meant to clarify the terms of Corporate Manslaughter and to potentially make conviction of the crime easier (especially in larger organisations), there is debate as to whether it has achieved its original objectives.

      With only 25 successful convictions in 10 years the courts have hardly been overwhelmed with prosecutions taken by the Crown Prosecution Service (CPS). Furthermore, all of the successful cases have been against relatively small companies and arguably most of them may have been found guilty of corporate manslaughter under the old definition, especially if the senior managers also had personal manslaughter charges against them.

      It seems that the legal and health and safety professions are waiting for a strong test of The Act where a successful prosecution of a large company occurs. This will serve to help define some of its terms and provide interpretive case law, in addition to raising its profile amongst large organisations and corporate bodies. The investigation into the Grenfell Tower fire may well be a watershed point for the Corporate Manslaughter Act.

      Need help on the Corporate Manslaughter legislation?

      If you or your Senior Executives need guidance on how to be compliant in line with the Corporate Mansuaghter Act, contact us aboutIOSH Safety for Executives and Directors training or any company specific Directors' briefing or consultancy

      Post writers

      Andrew Ashford CMIOSH (qualified barrister and NEBOSH examiner) presented to Astutis consultants on the impact of the Corporate Manslaughter Act and Andrew Froude CMIOSH has written his understanding of this legal update.

      Appendix

      Convicted company

      Nature of incident

      Sentence date

       

      Fine

      Plea

      Trading?

      Cotswold Geotechnical Holdings[1]

      Geologic trench collapsed

      15 Feb 2011

       

      £385,000

      Not guilty

      No

      JMW Farms[2]

      Bin fell from forklift tines

      8 May 2012

       

      £187,500

      Guilty

      Yes

      Lion Steel Equipment[3]

      Fell 13m through roof light

      20 July 2012

       

      £480,000

      Guilty

      Yes

      J Murray and Son[4]

      Pulled into unguarded machine

      15 Oct 2013

       

      £100,000

      Guilty

      Yes

      Princes Sporting Club[5]

      Struck by speedboat

      22 Nov 2013

       

      £135,000

      Guilty

      No

      Mobile Sweepers (Reading)[6]

      Falling street sweeper hopper

      2 Feb 2014

       

      £8000

      Guilty

      No

      Cavendish Masonry[7]

      Falling two tonne limestone block

      18 Nov 2014

       

      £150,000

      Not guilty

      No

      Sterecycle (Rotherham)[8]

      Struck by debris from autoclave explosion

      7 Nov 2014

       

      £500,000

      Not guilty

      No

      A Diamond and Son (Timber)[9]

      Struck by moving machinery

      28 Jan 2015

       

      £75,000

      Guilty

      Yes

      Peter Mawson[10]

      Fell 7.6m through roof light

      3 Feb 2015

       

      £200,000

      Guilty

      No

      Pyranha Mouldings[11]

      Trapped in oven when it was turned on

      25 March 2015

       

      £200,000

      Not guilty

      Yes

      Nicole Enterprises

      Falling static caravan

      27 March 2015

       

      £100,000

      Guilty

      Yes

      Kings Scaffolding

      Fell 4m through roof light

      12 Oct 2015

       

      £300,000

      Guilty

      Yes

      Huntley Mount Engineering[12]

      Pulled into unguarded metal lathe

      14 July 2015

       

      £150,000

      Guilty

      No

      CAV Aerospace[13]

      Overstocked metal sheets collapsed

      31 July 2015

       

      £600,000

      Not guilty

      No

      Linley Developments[14]

      Structurally unsound wall collapsed

      24 Sept 2015

       

      £200,000

      Guilty

      No

      Cheshire Gates and Automation[15] 

      Faulty automated gate

      7 Dec 2015

       

      £50,000

      Guilty

      No

      Baldwins Crane Hire[16]

      Crash involving crane with faulty brakes

      22 Dec 2015

       

      £700,000

      Not guilty

      Yes

      Sherwood Rise

      Failure to provide adequate care

      5 Feb 2016

       

      £300,000

      Guilty

      Yes

      Monavon Construction[17]

      Fell 3.7m into new-build’s basement

      27 June 2016

       

      £500,000

      Guilty

      No

      Bilston Skips[18]

      Fell 2.4m from top of skip

      16 Aug 2016

       

      £600,000

      Not guilty

      No

      SR and RJ Brown[19]

      Fell from building roof

      16 March 2017

       

      £300,000

      Guilty

      Yes

      Koseoglu Metal Work[20]

      Fell through roof light

      19 May 2017

       

      £300,000

      Guilty

      Yes

      Ozdil Investments[20]

      Fell through roof light

      19 May 2017

       

      £500,000

      Not guilty

      Yes

      Martinisation (London)[21]

      Fell from balcony during lifting operation

      7 July 2017

       

      £1,200,000

      Not guilty

      No


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