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Organisations need to reflect on the implications for their businesses
Following conviction at Winchester Crown Court earlier this week Judge Mr Justice Field has delivered sentence in the case of Cotswold Geotechnical Holding Ltd.
The company has been fined £385k in the first prosecution taken under the Corporate Manslaughter and Corporate Homicide Act 2007 (CMCH 2007). The prosecution arose from the death of employee Alexander Wright in September 2008.
Previously for a corporate manslaughter prosecution to succeed it was necessary to secure a conviction against a senior individual within the company. This hurdle was part of the cause of failures of the prosecutions following the Herald of Free Enterprise disaster and the Southall and Hatfield rail disasters.
Mr Wright had been working alone in a 3.5m trench after managing director Peter Eaton, left for the day. The trench collapsed on Mr Wright and buried him. He died of asphyxiation.
Fine could put company into liqudation
The company was described in court as being in a “parlous financial state” and was permitted to pay the fine over 10 years at £38,500 per annum. Mr Justice Field said the fine marked the gravity of the crime and the deterrent effect it would have on companies to adhere to health and safety guidance.
He said a larger fine would cause the small company to be liquidated, and four people would lose their jobs but added:
“It may well be that the fine in the terms of its payment will put this company into liquidation. If that is the case it’s unfortunate but unavoidable but it’s a consequence of the serious breach”
Gloucestershire Constabulary said:
“As a result of our investigation we found the company had a cavalier attitude towards health and safety. The way it taught and supervised junior engineers was inherently dangerous and the methods of working were outdated.”
Implications for directors and managers
This prosecution involved a small organisation. Nevertheless, the fine is sizable and illustrates that larger more profitable companies can expect more substantial fines. For construction clients, designers and contractors this case highlights two other important implications arising from deaths at work.
1. Personal stress
The personal physical stress of the investigative and judicial process arising from a death at work should not be underestimated by those holding senior positions. The director of Cotswold [Peter Eaton] has been very unwell since the investigation started. The period of time between the incident and conclusion of proceedings is rarely likely to be less that 3-4 years.
2. Corporate reputation
Conviction under CMCH 2007 is a finding that the grossly negligent way directors and other senior staff managed the business caused the death of a person.
The way in which the business was managed will come under close investigation and presented before court. Full details of managememt failings will be laid bare for all to see.
With increasing interest in health and safety throughout supply chains the implications for future business could be enormous. Clients may not be easily convinced an organisation has put in place sufficient changes to overcome failings that led to the death.
On conviction companies could find themselves subject to publicity orders. This aspect of the act has yet to be fully tested and could potentially be highly damaging to the ongoing credibility of the business.
Future corporate manslaughter cases
There are a number of investigations in the pipeline arising from deaths at work that have occurred since CMCH 2007 came into force. These will move towards conclusion and it is likely that some will result in CMCH prosecutions involving larger companies.
Comment
There is guidance available on the practical leadership actions required to minimise the prospects of a CMCH 2007 prosecution being launched.
Our own menu of minimum actions for directors and senior manager are:
- carry out your H&S duties diligently;
- deal with and respond to issues without delay;
- allocate sufficient time and resources to H&S management and controls;
- be familiar with your own systems and standards;
- take positive and visible steps to promote & encourage compliance;
- know what good H&S management looks like and work towards it;
- understand the strengths and weaknesses of your organisation and work on both; and
- judge managers and staff on H&S performance in addition to other outputs.