Cotswold Geotechnical (Holdings) Ltd ("Cotswold Geotechnical"), an engineering consultancy based in Gloucestershire, has become the first company to be convicted under the new corporate manslaughter legislation. The conviction is in connection with a fatal construction accident caused by a failure to keep hazardous practices up to date with industry safety guidance. In September 2008, Alex Wright, a 27-year-old geologist from Cheltenham employed by Cotswold Geotechnical, died at a development site in Stroud, Gloucestershire when taking soil samples for a housing development in a trial pit that was 3.8 metres deep. A jury returned the guilty verdict at Winchester Crown Court on 15 February 2011.
The case against Cotswold Geotechnical
The prosecution's case was that the work had been undertaken in a trench that was dangerous. This was because of the risk of it collapsing due to its depth and because the company had failed to take all reasonably practicable steps to protect Mr Wright from the hazards inherent in working in a trench of that depth, as required under construction safety regulations. It could, for example, have erected supports in the pit or carried out remote surveying without anyone needing to enter the pit. Expert evidence was given to the effect that industry guidance on trial pit excavation had prohibited entry into excavations deeper than 1.2 metres for some years. Mr Wright had been working within just such a pit, without the necessary support, when it collapsed. Despite rescue attempts, Mr Wright suffered traumatic asphyxiation. Another trial pit on the site had collapsed earlier the same day.
Furthermore, Mr Wright had been left to do the work alone by his supervisor, a director of the company. After investigation by Gloucestershire Police and the Health and Safety Executive, the company was deemed by those authorities to have taken a cavalier approach towards health and safety compliance and to have been working to outdated practices, for example frequently requiring junior employees to enter and work in unsupported trial pits at depths of up to 3.5 metres.
Cotswold Geotechnical was the defendant in the case. Originally, a director of Cotswold had also been charged with gross negligence manslaughter, but he was deemed too ill to stand trial. The director's police interview and his pronouncements were put before the court for the jury to determine if the company's approach to safety had been adequate or grossly negligent. The director was reported to have told police investigators that he thought little had changed in trial pitting practices since his training, but when asked how he kept abreast of health and safety changes he candidly admitted: "I expect largely speaking we failed miserably."
Under the Corporate Manslaughter and Corporate Homicide Act 2007, a company commits corporate manslaughter if the way in which its activities are managed or organised:
- causes a person's death
- amounts to a gross breach of the company's duty of care to that person - gross negligence, and
- a substantial element of the gross negligence derives from the way the company's senior management had managed or organised the company's activities - senior management failure.
To secure a conviction the prosecution needed to demonstrate that:
- the way in which Cotswold Geotechnical's activities were managed or organised:
- caused Mr Wright's death and
- amounted to gross negligence towards him, and
- a substantial element of that gross negligence lay in the way Cotswold Geotechnical's senior management had managed or organised its activities.
After considering the evidence and just 90 minutes' deliberation, the jury returned a verdict of guilty. Mr Justice Field said that the gross breach of Cotswold Geotechnical's duty of care to Mr Wright was a "grave offence" and imposed a fine of £385,000 despite the fact that he was dealing with a small company. He said the company, described in court as in a difficult financial state, could pay the money back at £38,500 a year for ten years. He explained that the size of the financial penalty indicated the gravity of the offence and that it should have a deterrent effect on other companies and help ensure strong adherence to health and safety guidance. But he also commented that as the company was small a fine any larger would cause it to be liquidated, causing four people presently employed to lose their jobs: "it may well be that the fine in the terms of its payment will put this company into liquidation. If that is the case, it's unfortunate but unavoidable, but it's a consequence of the serious breach".
Some commentators have argued that the Act was not designed to prosecute small businesses like Cotswold Geotechnical. However, the proceedings are being seen by some as a test case for the legislation.
Practical lessons - safety management
The successful prosecution demonstrates the importance for businesses to have systems in place for keeping working procedures visibly up to date with industry developments on safe working practices and to ensure that hazardous operations involving serious, potentially fatal risks are monitored and audited for compliance with approved, safe processes. The larger the business, the more responsible the approach the courts will expect - more resources will be expected to be devoted to managing hazardous operations safely in advance, together with monitoring and auditing ongoing operations. The scale of this will be commensurate with the size of the business and the nature of the activity and its inherent risks, but ultimately the documented and practised system in place will need to withstand forensic scrutiny.
Businesses should take from this conviction the lesson that the task of keeping systems and practices up to the level of industry practice and guidance is a crucial responsibility which will be closely analysed in the event of a tragic accident. Unless a company is able to demonstrate a responsible approach to safety management the legal price for failing to do so is likely to be high. Safety management systems should be updated on a regular basis, at least annually and in hazardous operations more frequently.
The penalty for being found guilty of corporate manslaughter is a fine imposed by the Crown Court and there is no maximum financial limit. Businesses engaged in hazardous activity should check employers', public and Directors' and Officers' liability policies for legal expenses coverage. Criminal fines and legal defence costs are not recoverable under insurance on conviction.
It has been reported that in light of the success of this case Crown Prosecution Service lawyers are reconsidering a number of other fatalities with a view to bringing further corporate manslaughter charges.