Lion Steel Limited (Lion Steel) has become the third company to be convicted of the offence of corporate manslaughter since the Corporate Manslaughter and Corporate Homicide Act (the Act) was introduced in 2008. The company pleaded guilty to the offence following a three-week trial at Manchester Crown Court.
The Act replaced the common law offence of manslaughter by gross negligence by creating a new offence, which is committed by an organisation "…if the way in which its activities are managed or organised – (a) causes a person's death, and (b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased".
Lion Steel was charged following the death of 45-year-old employee, Steven Berry, who was fatally injured following a fall through a fragile roof panel at a company site in May 2008. The company and three of its directors were also charged under the Health and Safety at Work etc. Act 1974 (HSWA) for failing to ensure the health and safety of their employees and the three directors were also charged with gross negligence manslaughter.
However, the gross negligence manslaughter charges against the three directors were subsequently dropped and the HSWA charges left to lie on file with the agreement of the prosecution and the approval of the court when the company entered a guilty plea to the corporate manslaughter charge.
This case was of particular interest as under the Act the financial penalty that can be imposed is unlimited, subject to sentencing guidelines. The Sentencing Guideline Council's guidance published in 2010 suggests that fines for the offence should be at least £500,000 and may be measured in millions of pounds. Generally it has been thought that the full potential of the legislation and guidance has not been fully tested on a larger company as the first company to be found guilty of the charge of corporate manslaughter, Cotswold Geotechnical Holdings Ltd, was fined £385,000 in February 2011 following the death of a geologist as a result of a trench collapse as the financial situation of the company was taken into account (and in fact the company has now gone into liquidation). In May this year, pig farming company JWM Farms became the first Northern Irish entity to be convicted following the death of an employee at the farm's meal-mixing plant, and was fined £187,500 even though it was in better financial shape than Cotswold Geotechnical Holdings Ltd.
Although Lion Steel was a significantly bigger company than the two previously convicted, it is not of the size of company that the legislation sought to target. It was fined £480,000, to be paid over four years, with £84,000 costs.The fine was consistent with the published sentencing guidelines but the amount was discounted by 20% to £480,000 to reflect the company's guilty plea and the possibility that a greater fine could place the financial wellbeing of the company and its employees in danger. The costs to be paid were also discounted by 60% because of the delay in bringing the case to court by the prosecution.
Lion Steel will avoid having to self-publicise its conviction, as the offence was committed before the relevant part of the Act came into force giving the sentencing judge such power.