The Crown Prosecution Service (CPS) is bringing the first ever prosecution under the Corporate Manslaughter and Corporate Homicide Act 2007, which came into force just over a year ago. Cotswold Geotechnical Holdings (CGH) will be prosecuted under the Act and under the Health and Safety at Work Act 1974 (HSWA), following the death of 27-year-old junior geologist Alexander Wright.
The decision of the CPS is highly significant, not only because it is the first case under the new Act, but also because company director Peter Eaton is also being prosecuted on an individual basis, for gross negligence manslaughter, and breaching section 37 of the HSWA.
Penalties
Convictions for corporate manslaughter carry an unlimited fine for the employer on conviction and the current sentencing proposals – yet to be approved – have suggested fines of between 2.5% and 10% of annual turnover.
The court can also impose publicity and remedial orders. A publicity order is a new power, under which the court can require a defendant company to publicise the full details of the conviction in whatever medium the court considers appropriate – such as the national press, a company’s website, and notices to clients.
A conviction for gross negligence manslaughter carries a maximum sentence of life imprisonment for the individual, although the sentences have usually been around 18 month to two years in previous cases. The section 37 charge carries with it a maximum of two years in prison.
The case was heard at Stroud magistrates on 17 June and referred to Bristol Crown Court. If it is contested, it may be several years before the prosecution comes to a conclusion. Nonetheless, the CGH case serves as a timely reminder that the new Act provides prosecutors with a wide range of charges in cases involving fatalities.
So what can other employers learn from how the law is being applied in this instance?
Definition of guilt
An organisation is guilty of corporate manslaughter if the way its activities are managed or organised causes a death and amounts to a gross breach of a duty of care to the person who died. Factors which will be looked at by the court include:
- How serious was the failure?
- How much of a risk of death was there?
- Was Health and Safety Executive guidance followed?
- What were the “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”?
A substantial part of the breach must have been in the way activities were organised by “senior management”. However, as Cotswold Geotechnical is a relatively small company, with a turnover of only £330,000, this first prosecution is unlikely to shed much light on how the new Act will apply to larger organisations. In particular, it will probably do little to answer the key questions of what is “senior management”, and how should their actions or omissions be taken into account in establishing the gross breach test.
Preventive measures
What is clear from this case is that the landscape of health and safety enforcement has changed. Companies can expect huge fines based on a percentage of turnover and publicity orders, which will be highly damaging to a company’s reputation. The position of individual directors, officers and managers is extremely precarious in prosecutions of this nature, particularly in smaller companies where it is easier for the prosecution to single out individuals. Any conviction of individuals is highly likely to lead to a prison sentence.
Companies should take several practical steps to reduce the spectrum of a prosecution under the new Act:
- Audit – now is a good time to conduct a comprehensive audit and review of your safety management system in its entirety. In particular, make sure all procedures are properly documented and implemented by all levels of management and staff.
- Risk assessment – this cannot be stressed enough. All activities must be risk assessed by a competent person.
- Make sure health and safety responsibilities are clear and in writing at all levels.
- Look carefully at the actions of senior management.
- Appoint a health and safety director at board level.
- Keep careful records of all meetings where health and safety is on the agenda. Make sure it is on the agenda.
- Make sure action points are completed.
- Constantly improve your safety culture – no culture is ever perfect.
- Put in place an emergency action plan to deal effectively with incidents and investigations.
- Keep up to date with the law and guidance – it changes constantly.
- Check your insurance position, both in terms of company cover and in respect of directors and officers cover.
- Obtain legal advice at all times.
David Leckie is a partner in the commercial litigation and advocacy team, specialising in health and safety, with Maclay Murray & Spens.
Cotswold Geotechnical Holdings (CGH) faces unlimited fines, remedial and publicity orders following the ground-breaking decision of the Crown Prosecution Service last month to proceed with the first ever prosecution under the Corporate Manslaughter and Corporate Homicide Act 2007.
In addition, the company director Peter Eaton, 60, faces the possibility of a lengthy prison sentence for individual charges of both individual gross negligence manslaughter, and health and safety offences.
Junior geologist Alexander Wright was killed while working in a trench at a proposed housing site. Rescuers took more than two days to recover his body from beneath several tonnes of mud.
The case was heard at Stroud magistrates’ court on 17 June. However, as CGH is a small company which employs only a handful of people and has a turnover of around £330,000, this first prosecution is unlikely to shed much light on how the new Act will be applied to medium and larger-sized organisations.
This case makes it clear that the stakes for individual officers, managers and directors are higher than ever. Prosecutors will use all available laws at their disposal to secure convictions against both companies and individuals. This will inevitably result in prison sentences where fatalities occur.
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