The CPS has announced that it has authorised the first prosecution of a company under the new corporate manslaughter laws which came into force in April 2008.
Cotswold Geotechnical Holdings Ltd will be prosecuted in relation to the death of an employee on 5 September 2008 near Stroud in Gloucestershire. The company also faces a separate charge under the Health and Safety at Work Act 1974. Alexander Wright was employed by Cotswold Geotechnical Holdings as a junior geologist. He was taking soil samples from inside a pit which had been excavated as part of a site survey. The sides of the pit collapsed on top of him. A post-mortem revealed that he had suffocated in the mud.
Peter Eaton, a director of the company, has been charged individually with causing manslaughter by gross negligence and also with a health and safety offence.
Under the Corporate Manslaughter and Corporate Homicide Act 2007, an organisation is guilty of corporate manslaughter if:
- The way in which its activities were managed or organised causes a death.
- There is a "gross breach" of duty of care to the person who died – i.e. has conduct fallen below what can reasonably be expected.
- A substantial part of the breach must be the way in which senior management organised the company's activities.
The cases come before Stroud Magistrates' Court on 17 June but will be heard in Crown Court which is the only venue for manslaughter charges.
In determining whether the company is guilty, the Court will look at the extent to which the company was complying not only with health and safety law, but also with relevant guidance and codes of practice. Safety culture and the attitude of management will also come under scrutiny.
One of the aims of the Act was to address criticisms that the old law enabled larger and more diverse organisations to escape liability for corporate manslaughter. Whilst the old law focussed on the negligence of one individual deemed to be the “directing mind” of the company, the new law looks at the company as a whole. The Act looks at systemic failures – failures in the way that activities are organised, managed and carried out. Minor actions or omissions by a number of people can now be “totted up” to determine whether a company is liable.
The first prosecutions will attract attention as practitioners see how the Courts interpret the new law and the fines awarded. In particular, there will be interest in what the Court deems to be “senior management”. What level of involvement in the management or organisation of a company will be required? What level of conduct can reasonably be expected?
Whilst someone had to be first, there may be disappointment that a relatively small company is the first to come under scrutiny. Theoretically, it should be straightforward to scrutinise the management and organisation of a smaller entity. It should be easier to determine whether a “Site Manager” of a company employing 15 people is “senior management” than a “Site Manager” in a company employing 150 people for instance. Is the CPS “testing the water” with a small organisation rather than on a large organisation?
In terms of fines, the maximum sentence on conviction is an unlimited fine. But what of the amount? Practitioners await the publication of the Sentencing Advisory Panel’s guidance on sentencing of corporate manslaughter offences. This was supposed to come out last year, but is not likely to make an appearance until later this year. In the draft guidance, a tariff system of sentencing was proposed with a starting point of five per cent of average turnover for the past three years.
With turnover being an inadequate reflection of a company’s profitability, there was concern that a fine based on turnover could very well put an organisation into administration. Of course, this may not be a bad thing in some cases and no job is worth dying for. But with a continued slide in the UK economy predicted, the Panel may be reconsidering this element.
But it is not only the fine that companies should be concerned about. The Court can impose a Publicity Order forcing the company to publicise its conviction in the regional and national press, in its annual report and by writing to shareholders and customers.
This may be the first corporate manslaughter prosecution, but it certainly won't be the last. Organisations should ensure that they have robust health and safety management procedures in place, that responsibilities are understood and adhered to and a good safety culture is maintained.