July 2016: A construction company has been fined £550,000 after pleading guilty to two counts of corporate manslaughter and a breach of Health and Safety at Work etc. Act 1974 (HSWA 1974) following the deaths of two passersby. The company was fined £250,000 for each of the deaths, as well as £50,000 for failing to discharge its duty to persons other than employees in breach of the HSWA 1974, and ordered to pay £23,653 in prosecution costs.
The construction company was responsible for a building site where part of the site had plywood hoardings in place which covered the pavement. Two pedestrians were seen arguing and scuffling with one another early one morning and made contact with the hoardings which gave way, sending both men falling into the basement area resulting in their deaths.
December 2015: A company has been fined £700,000 after being found guilty by a jury for corporate manslaughter. It was also ordered to pay all CPS costs and half of the Health & Safety Executive’s costs. The conviction followed the death of one of their employees, a crane driver, in 2011. At the time of his death he was driving a 16 wheel, 130 tonne crane down an access road when it crashed after failing to negotiate a steep bend.
An aggravating feature of the case was that on wider investigation, several of the company’s cranes were discovered to have faults with their brakes or other operating systems. The company had failed to service and maintain the vehicles which would have prevented the accident.
This business briefing sets out the factors which can lead to a business being prosecuted for corporate manslaughter and the penalties for breaching the legislation.
What are the offences? A business will be guilty of a corporate manslaughter offence if all of the following apply:
- The way in which the business’ activities are managed or organised causes a person’s death
- The person’s death is the result of a gross breach of a relevant duty of care owed to that person
- The way in which the business’ activities are managed or organised is a substantial element of the breach
Who does the offence apply to?
- Corporate manslaughter legislation applies to all businesses operating in the UK
- It does not apply to individuals (for example, company directors or managers). However individuals can be prosecuted for the offence of manslaughter by gross negligence
- If a business is prosecuted under corporate manslaughter legislation, it (and the company directors and managers) could still be prosecuted for breaches of health and safety or other laws
What constitutes a gross breach?
- “Gross breach” means conduct that falls far below what can reasonably be expected of a business in the circumstances
- A jury must take a number of factors into account when deciding whether a business is guilty of corporate manslaughter:
- whether the business was in breach of health and safety legislation
- how serious the management failure was, and
- how much of a risk there was of death occurring
- The jury must also take into account a number of other factors, including:
- any health and safety guidance relating to the breach, and
- whether there were any attitudes, policies, systems or accepted practices in the business that were likely to have encouraged a management failure
What types of duty of care are covered?
- The legislation deals primarily with health and safety matters, but is not limited to these. It may be possible to prove a duty of care in a different context (for example, under environmental law)
- The types of duty of care covered include a duty owed by a business to employees, a duty owed as an occupier of premises and a duty owed in connection with:
- the supply of goods or services
- carrying out any construction or maintenance operations, or
- carrying out any other activity on a commercial basis
What are the penalties for breaching the legislation?
- The maximum sentence is an unlimited fine with a suggested range of £180,000 fine to a £20 million fine.
- The more foreseeable a serious injury was, the higher the company’s culpability will be considered, and so will attract a higher fine.
- In some cases the fine will have the effect of putting the offending company out of business and the court is entitled to consider this an acceptable consequence.
Remedial orders: The court can impose a remedial order requiring a business to address specific failings involved in the sentence. Because the court will not usually take into account any remedial costs when it assesses a fine, the business may have to pay both a fine and the costs of improving its internal procedures to comply with a remedial order.
Reputational damage: The court can impose a publicity order forcing a business to advertise that it has been convicted of corporate manslaughter. The order may include details of the conviction (for example, the amount of the fine and the terms of a remedial order).
Insurance: Insurance cover will not be available to a business if it has been convicted of a corporate manslaughter offence. However, if the business mounts a successful defence, cover may be available for any legal costs it has incurred. Businesses should ensure they check their position with their insurers.
The content of this Business Briefing is for information only and does not constitute legal advice. It states the law as at July 2016. We recommend that specific professional advice is obtained on any particular matter. We do not accept responsibility for any loss arising as a result of the use of the information contained in this briefing.