On 20 July, Lion Steel Equipment Limited became only the third company in the UK to be convicted of corporate manslaughter and was fined £480,000 and ordered to pay prosecution costs of £84,000. It is the largest of the three organizations so far convicted of the offence (it has over 100 employees) but is still nothing like the size of the businesses that were probably the real targets of the changes in the law four years ago, and a healthcare organization is still yet to be prosecuted. However, public and private healthcare organizations continue to be investigated for Corporate Manslaughter and the Lion Steel case still needs to be considered by those working in this sector.
Lion Steel was charged following the death of an employee who suffered fatal injuries when he fell through a fragile roof at its site in Hyde, Cheshire in May 2008. The company admitted the offence earlier this month, part way through a trial, on the basis that all charges against its directors would be dropped (three men had been charged with gross negligence manslaughter and health and safety charges).
The fine that Lion Steel received of £480,000 is consistent with published sentencing guidelines for Corporate Manslaughter. The extended period for payment of the fine and costs (up to 3 years) reflects submissions made regarding the company’s ability to pay such a significant sum immediately without prejudicing the prospects of current employees. This has clear implications for potential fines against public healthcare organizations (which would be paid for by the public in increased taxes), and private healthcare organizations who may also have their fine reduced if they are able to plead that the size of their fine may impinge on their ability to deliver their healthcare services. The costs awarded in Lion Steel were reduced by a factor of 50% due to the delay in bringing the prosecution which is also in itself interesting.
Lion Steel is certainly bigger than Cotswold Geotechnical Holdings and JMW Farms (the other two organizations convicted for Corporate Manslaughter since it came into force in April 2008). The company pleaded guilty and so there was no opportunity to have a Trial which could have explored some of the more challenging and uncertain aspects of the Act which still remain to be tested in respect of a larger company. For example, how will the courts resolve the question of who is a “senior manager” in larger organizations? For healthcare organizations this means that Police investigating Corporate Manslaughter will still be forced into looking at corporate senior managers as well as medical senior managers. How far up the Corporate ladder a person has to be before they become a “senior manager” remains an unknown.
Lion Steel also demonstrated that the juxtaposition of a Corporate Manslaughter Act prosecution against a Company alongside a prosecution against an individual (for gross negligence manslaughter or section 37 of the Health and Safety at Work etc. Act 1974) is still something that will cause the Courts difficulties. In Lion Steel the case against the directors for individual offences was severed from the Corporate Manslaughter case and then dropped, However, whether the prosecutors opt for Corporate Manslaughter or individual charges (or both), senior managers need to know that they will be targeted for investigation. Furthermore, until a large healthcare organization is actually prosecuted and tried in Court, investigators will continue (without having any guidance to the contrary) to investigate all the way up to the top of these organizations whenever there is any death or large scale safety incident.