The Corporate Manslaughter and Corporate Homicide Act 2007, which came into effect in April 2008, achieved its first conviction in February this year, of Cotswold Geotechnical Holdings Ltd.
The case attracted huge media attention purely as it was the first conviction under the Act. However, there may be wider ramifications for employers and it remains to be seen whether or not the Act will lead to larger companies being prosecuted. As Cotswold Geotechnical Holdings was run by a sole owner and was a small organisation, it was felt that this case did not determine the full extent of the Act, which was established to address the problems of convicting larger organisations. The real test will be when a substantial organisation with an elaborate management structure is prosecuted.
When the Act initially came into force it was implied that there would be an average of 12 cases per year. However, the Crown Prosecution Service has mentioned that they are contemplating a number of other records of evidence in relation to possible further prosecutions for the offence. Prior to the law coming into effect, it had been hard to convict bigger companies but it was possible for a corporate body to be prosecuted for a selection of criminal offences including the common law offence of gross negligence manslaughter. However for an organisation to be guilty of an offence, it was imperative for a senior member of staff, such as a managing director (known as a controlling mind) to be guilty of the offence. Where any events occurred prior to 6th April, the pre-existing law applies and the current Act only applies to deaths where the injury or behaviour leading to the death, occurs on or after 6th April.
The Act focuses on the way in which a business’ activities are maintained and co-ordinated, which is generally referred to as “management failure” and whether that caused death and was a gross breach of the relevant duty of care. In addition the way in which activities are maintained and co-ordinated by senior management needs to be a significant aspect of the breach.
Organisations need to consider the sentencing guidelines, as they do not only apply to corporate manslaughter cases but also to health and safety offences that result in a person losing their life. The director of Cotswold Geotechnical Holdings was charged with an offence under the HSAW as well as gross negligence manslaughter. It was the company itself who was the first to be charged under the 2007 Act. The Act indubitably predicts concurrent prosecutions for both breaches in health and safety as well as corporate manslaughter as both of these emerge from identical facts.
It is likely that both the Health and Safety Executive and The Crown Prosecution Service will persist in prosecuting senior officials with health and safety offences which carry serious sentence, including imprisonment. One of the main sanctions for conviction under the Act is an unrestricted fine. Sentencing guidelines published in February 2010 stated that fines should seldom be less that £500,000. Cotswold Geotechnical Holdings were fined £385,000 to be paid in equally split amounts over a period of ten years. This decision was based purely on the company’s financial situation, although it is plausible the company may go into liquidation as a result of the conviction. The presiding judge at the time said that if the company was to go out of business that would be a consequence of the appalling breach that had been committed.
Cotswold Geotechnical Holdings has applied for permission to appeal its conviction. At the time this article has been published, no other information is currently available.
View our update on the Corporate Manslaughter Act (March 2012).
