Good Company October 2014 edition
- Corporate manslaughter cases in 2014
- Directors' personal guarantees
- Directors' duties in a third party fraud
- Holding company directors – potential liability as director of subsidiaries?
- Claiming for group losses
- The employee ownership business model
Background to the offence
The Corporate Manslaughter and Corporate Homicide Act 2007 (the "Act") has been in force since 6 April 2008. It was introduced to make it easier for the authorities to prosecute organisations where a corporate management failing has caused a fatality. It replaces the old law of corporate manslaughter but sits alongside existing Health and Safety at Work Act offences. Safety related prosecutions are therefore typically brought under Health and Safety at Work Act as well as under the Act.
It is an offence under the Act if the management or organisation of a company, partnership or other organisation is grossly negligent, the senior management are substantially to blame for that failure and the failure has caused someone's death. "Gross negligence" means conduct which falls far below what can reasonably be expected of the organisation in the circumstances. If convicted, the penalty is an unlimited fine, in addition to which the court has powers to make publicity, compensation and certain other orders.
The Act applies to harm resulting in death within the UK, within the UK's territorial waters, on a British ship, aircraft or hovercraft or on an oil rig or other offshore installation already covered by UK criminal law.
The Act does not apply to individuals, who continue to be liable under the common law offence of gross negligence manslaughter and under existing health and safety legislation.
Corporate manslaughter cases in 2014 to date
To date 2014 has seen two convictions and two acquittals under the Act, details of which are set out below.
PS and JE Ward Ltd – Not guilty
Tractor driver Grzegorz Krystian Pieton was electrocuted when the hydraulic lift trailer he was towing hit an overhead power cable in Norfolk in July 2010. He subsequently died.
Mr Pieton's employer, PS and JE Ward Ltd, was acquitted of the charge of corporate manslaughter in April 2014. This was the first case of an organisation being acquitted of such a charge. During the hearing it emerged that Mr Pieton had attended a training course for forklift truck drivers that covered working under live cables and it appeared that Mr Pieton was acting under his own initiative in carrying out the task in hand rather than following instructions from a director, both factors which are believed to have contributed to the outcome of the case.
The company was however convicted and fined under section 2(1) of the Health and Safety at Work Act 1974 which states that "It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees". The company was fined £50,000 and ordered to pay costs of £47,932.
Cavendish Masonry Limited – Guilty
In May this year Cavendish Masonry was found guilty of corporate manslaughter following the death of its employee David Evans during the refurbishment of a large Oxfordshire estate in February 2010. A two-tonne limestone block fell off a concrete lintel and crushed the 23 year old. The company had previously pleaded guilty to an offence under section 2(1) of the Health and Safety at Work Act 1974.
Cavendish Masonry were found to have committed a gross breach of their duty of care in their management and organisation of work on the estate, by failing to take reasonable care in the planning and execution of those activities. As at the time of writing, details of the sentence were not available.
MNS Mining Limited – Not guilty
In June 2014 MNS Mining Limited was acquitted of four counts of corporate manslaughter following the drowning of four individuals trapped in the Gleision drift mine in 2011 when 650,000 gallons of water flooded the Swansea Valley mine following a controlled explosion.
The prosecution claimed the mine manager, charged with four counts of gross negligence manslaughter, had not carried out adequate inspections the day before the incident, but evidence from an expert geologist confirmed that the water could have gathered following the explosion. The mine manager was also acquitted.
Mobile Sweepers (Reading) Limited – Guilty
This case involved the death of Malcolm Hinton, who was crushed to death whilst he carried out repairs to a road sweeper. The company pleaded guilty to corporate manslaughter and was fined £8,000 and ordered to pay £4,000 in costs. The company was also ordered to publicise its wrongdoing. The company's sole director, Mervyn Owens, was fined £183,000 after he admitted breaches of health and safety legislation and was disqualified from being a company director for 5 years.
There are a number of practical steps which organisations can take to minimise the risk of prosecution under the Act and under general health and safety legislation. In particular, ensuring the following:
- The formulation and regular review of a written health and safety policy.
- Regular risk assessments to identify and manage the source of risks to employees and members of the public.
- Clearly defined roles and responsibilities for safety matters – from the board down.
- Proper and adequate training.
- The appointment of a member of the board with overall responsibility for health and safety.
- Regular reports to the board on matters concerning health and safety.
- A process for monitoring the effectiveness of the health and safety system and reviewing and amending it as appropriate.
For further guidance on corporate manslaughter and health and safety issues, please contact Rhys Griffiths on 020 7861 4546.
Rhys Griffiths is a Partner in Fieldfisher's Dispute Resolution Group in London and Ruth Lewis is an associate in Fieldfisher's Corporate Group in London.
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