Cotswold Geotechnical Holdings Ltd was convicted of corporate manslaughter on 15 February 2011, in connection with the death of Alexander Wright. Wright, a 27 year old geologist, was taking soil samples in a deep trench when it collapsed and killed him. The company had ignored industry guidance on deep excavations.
A company is guilty of corporate manslaughter in England and Wales if it owes a duty to take reasonable care for a person's safety and the way in which its activities have been managed or organised amounts to a gross breach of that duty and causes the person's death. How the activities were managed or organised by senior management must be a substantial element of the gross breach of duty. In Scots law, the offence is called corporate homicide.
This is the first prosecution under the Corporate Manslaughter and Corporate Homicide Act 2007, which came into force in April 2008. The Crown Prosecution Service is currently considering a number of other files of evidence in relation to further possible prosecutions under the Act.
Although companies could be convicted of manslaughter or culpable homicide before the Act, this involved identifying a senior individual who could be said to embody the company and who was personally culpable for the death. This meant it was extremely difficult to bring a successful prosecution, especially of a larger company. The Act enables companies to be prosecuted for systemic management failures, without any one senior individual being culpable. However, this aspect of the Act was not tested in this case, as the judge commented that Cotswold Geotechnical's director was in substance the company.
The primary penalty under the Act is an unlimited fine. Cotswold Geotechnical was fined £385,000, payable over 10 years. In setting the fine, the judge took account of the fact that the company was in a parlous financial state. He noted that the company was on a small scale and a larger fine would push it into liquidation, causing four innocent people to lose their jobs. However he acknowledged that in practice even this fine might lead to liquidation of the company: this would be unfortunate but an unavoidable consequence of the serious breach of duty.
Larger companies convicted under the Act could expect to pay much larger fines. Under guidelines issued by the Sentencing Guidelines Council, courts should look carefully at both turnover and profit, and also at assets, in order to gauge the resources of the convicted company. The guidelines state the appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds.
Nor can larger, financially sound companies expect to be allowed extended periods in which to pay fines: the guidelines state fines should be payable within 28 days in the case of a large company.
In addition to imposing fines, the court has the power to impose publicity and remedial orders on convicted companies. It does not appear that any such orders were made in this case.
The sentencing guidelines indicate a publicity order should usually be imposed, requiring the company to publicise its conviction, particulars of the offence and the penalties imposed. Publication may be required in the form of newspaper announcements and/or on the company's website, and details may have to be given to shareholders. In the case of Cotswold Geotechnical, the fact that this was the first prosecution under the Act has secured press coverage for the conviction, and the company's size would have made notification to shareholders unnecessary.
Remedial orders, requiring specific action to remedy failings, are less likely to be made than publicity orders, as the company is likely to have taken appropriate steps by the time of sentencing.
Click here for the Sentencing Guidelines Council definitive guideline on corporate manslaughter & health and safety offences causing death.
For more information, please contact:
01224 356 140
020 7002 8536
Given your interest in Health & Safety law, you may find some of our other updates particularly useful. Corporate, for example, has been selected by many of our clients who have signed up to Health & Safety. To register for additional bulletins, guides and seminars, visit sign up.
Please feel free to forward on this bulletin to friends and colleagues who may find it of interest and wish to subscribe themselves.
This briefing is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to any particular matter.