Corporate Manslaughter Update

The Corporate Manslaughter and Corporate Homicide Act was a landmark law that came into force on the 6th April 2008, following the culmination of ten years of campaigning by unions and other groups.

After a series of disasters where prosecutions collapsed or could not be mounted; to included the deaths of 187 people after the capsizing of the Herald of Free Enterprise in 1987; the King’s Cross Underground fire in the same year (31 deaths); the Piper Alpha oil platform disaster in 1988 (167 deaths); and the Paddington rail crash in 1999 (31 deaths).

Companies that might otherwise have been able to avoid prosecution or conviction will, under the Corporate Manslaughter Act, be more easily brought to justice and will face the prospect of heavy fines, if they are found to have caused death due to their gross corporate health and safety failures.

Under the old laws a company could be convicted only if the “directing mind” or senior individual could be identified as responsible for gross failings leading to a death. The new Act enables the collective actions of a company’s management to be examined. Although individuals could not be jailed, companies faced unlimited fines. The implementation of this law was possibly the “most significant change in health and safety law for approximately 30 years”, and that although penalties were only fines, the consequences could be crippling.

At the time, the Sentencing Advisory Panel suggested fines of up to 10 per cent of a company’s annual turnover during the previous three years. Fines could easily be hundreds of millions of pounds.” The Act would also apply to other organisations such as some government departments, police forces, partnerships and trade unions; however linking fines to turnover could of put small firms out of business, serving as a wake-up call to businesses to update their health and safety controls for the wellbeing of their employees and the public.” Gibb, F (2008)

Following much consultation the Sentencing Guidelines Council (SGC), the body that sets sentencing bands for criminal offences, said fines “may be millions of pounds and should seldom be below £500,000” in its final guidance document published yesterday (10 February 2010).

“The advice is clear – punitive and significant fines should be imposed both to deter and to reflect public concern at avoidable loss of life,” the SGC said. When deciding on fines, judges should not be influenced by the impact on shareholders and directors, the SGC said but should consider the potential effects of innocent employees and the effect the fine may have on the provision of services to the public.

Fines should be increased where is evidence that the business could have foreseen the accident and where breaches of rules were widespread in the organisation. For other health and safety offences that cause death, fines should begin at £100,000 and go into the “hundreds of thousands” the SGC said. Lord Justice Anthony Hughes, a Court of Appeal judge who sits on the SGC, said: “These are serious offences and the fines must be punitive and substantial and have an impact on the company or organisation.”

These sentencing guidelines take effect from February 15, 2010 and will apply to all prosecutions that go before a court from that date, even if the incident occurred a number of months or even years ago”. In almost all cases, businesses will also be forced to publish statements about their conviction for corporate manslaughter, including details of the offence and the fine. Under the SGC's original guidelines, fines might have been linked to the offending company’s turnover - a feature that has not survived into the final guidance. In conjunction with the threat of up to two years in prison for individual directors, managers or employees for health and safety breaches, organisations should now be in no doubt that demonstrating a strong health and safety culture is as strategically vital as dealing with any other business risk. Herman, M (2010)

The first ever prosecution case to be tried under this Corporate Manslaughter Act  commenced in February against Cotswold Geotechnical Limited, following the death of an employee on 5th September 2008. Links to the sentencing guidelines website and sentencing guidelines themselves can be found below.

Website: http://www.sentencing-guidelines.gov.uk/
Guideline: http://www.sentencing-guidelines.gov.uk/docs/guideline_on_corporate_manslaughter.pdf 

References
Gibb, F, (2008, April) - Corporate Manslaughter Act: firms face huge fines for deaths – TimesOnline, The Times Newspapers Ltd, News International Group.
http://business.timesonline.co.uk/tol/business/law/article3671096.ece

(2010, February) - Local authorities and other public sector bodies face fines running into millions if guilty of corporate manslaughter – Local Government Lawyer, HB Editorial Services Ltd. http://localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=1063%3Alocal-authorities-and-other-public-sector-bodies-face-fines-running-into-millions-if-guilty-of-corporate-manslaughter&catid=59%3Agovernance-a-risk-articles&q=&Itemid=8

Herman , M (2010, February) - Corporate Manslaughter fines to reach millions – TimesOnline, The Times Newspapers Ltd, News International Group.
http://business.timesonline.co.uk/tol/business/law/article7021753.ece