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Another company charged with corporate manslaughter

14/12/2012

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United Kingdom

Another company charged with corporate manslaughter

1.  PS & JE Ward Ltd

PS & JE Ward Ltd, a company which runs a plant nursery, has very recently been charged by the CPS with corporate manslaughter under the Corporate Manslaughter and Corporate Homicide Act 2007 ("the Act"). The charge relates to the death of Grzegorz Krystian Pieton, an employee of PS & JE Ward Ltd who died in July 2010 when the metal hydraulic lift trailer he was towing touched an overhead power line and gave him an electric shock.

2.  The offence

The Act provides that an organisation is guilty of an offence if the way in which its activities are managed or organised by its senior management is grossly negligent and that this causes a person's death. There is no liability for individuals under the Act but they can be charged in an individual capacity under the existing law of gross negligence manslaughter.

The prosecution must prove that a substantial element of the gross negligence of the company resulted from the way the senior management managed or organised its activities. Conduct which will be considered as gross negligence will be that which falls far below what can reasonably be expected of the organisation in the circumstances. The factors a jury will take into account when deciding this question is whether the organisation failed to comply with any health and safety legislation, how serious that failure was and how much of a risk of death it posed.  A jury can also take into account the safety culture of the organisation.

The penalty, if convicted, is an unlimited fine. The courts also have the power to impose remedial orders, publicity orders (i.e. to compel the company to publicise the fact of its conviction), compensation orders, prosecution costs orders and a victim surcharge.

3.  Other cases

There have, to date, been relatively few charges of this nature made, but, in April 2012, it was indicated by the Attorney General that there are a significant number of cases (approximately fifty) in which the offence of corporate manslaughter is being considered by the Special Crime and Counter Terrorism Division to which the cases have been referred.

In February 2011 the first trial relating to a corporate manslaughter charge resulted in the jury finding the accused company, Cotswold Geotechnical (Holdings) Ltd, guilty and a fine of £385,000 being imposed. The gravity of the fine was said to reflect the seriousness of the offence, but the court acknowledged that the level of the fine risked the company’s insolvency given its financial state. As such, the court ruled that the fine could be paid over ten years.

In July 2012 Lion Steel Ltd was fined £480,000, to be paid in four instalments, plus £64,000 prosecution costs. It is stated in the sentencing guidelines to the Act that a fine will rarely be less than £500,000. In this instance, however, the court took Lion Steel Ltd's guilty plea into account. As above, the court acknowledged the risk of insolvency and subsequent loss of employment to its current employees when deciding the level of the fine.

A fine of £187,500 to be paid within 6 months, plus £13,000 costs was imposed on JMW Farm Limited, a company in Northern Ireland, in May 2012. This is the largest fine awarded in Northern Ireland to date for a health and safety related offence.

4.  Practical steps

To ensure that your organisation does not fall foul of the law you need to consider:

  • your health and safety standards
  • the adequacy of your existing safety management systems
  • possible improvements to those systems
  • regular auditing of compliance with health and safety law
  • developing an incident response plan
  • reviewing your liability insurance.

If you would like more information on how you can protect your business against liability, please contact Rhys Griffiths.

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