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April 26, 2013

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Large companies can’t hide forever from Corporate Manslaughter Act

A large organisation is likely to face prosecution under the Corporate Manslaughter and Corporate Homicide Act 2007 at some point in the future, but the prospect of one being convicted of the offence is far less promising.

This was the view of Pinsent Masons’ Kevin Bridges, the lawyer who defended the first company convicted under the Act (Cotswold Geotechnical Holdings Ltd) and one of five legal experts who took part in an online round-table discussion hosted by SHP yesterday (23 April), to mark five years since the Act came into force.

Kevin was responding to a question — posed by a listener to the interactive online discussion — on whether the three cases that have ended in a conviction (Cotswold, Lion Steel Equipment Ltd and JMW Farms Ltd) and the four that are currently proceeding through the courts (MNS Mining, Prince’s Sporting Club Ltd, Mobile Sweepers (Reading) Ltd and PS & JE Ward Ltd) could have been prosecuted under the HSWA 1974 instead of the 2007 Act.

Kevin explained that many of the cases above involved, or involve, parallel prosecutions under the 1974 Act, and the Corporate Manslaughter Act was not necessary to bring about a conviction of the companies concerned — all of which are small, or medium-sized entities.

He added that many of the cases could have been just as easily prosecuted under the old common law. He went on to express doubts as to whether a large company will ever be convicted of corporate manslaughter because of the key test of whether the activities of senior management played a substantial role in causing the death.

Said Kevin: “In answer to the senior management test, should it be reviewed? Yes, because that will prove to be the biggest stumbling block.”

Adrian Darbishire QC, who prosecuted Cotswold, agreed, pointing out that if the Act really had been designed to catch large companies, those who drafted it would have “stepped away from the identification principle”. (This existed under common law and meant that an organisation could only be charged with corporate manslaughter if it could be proved that “a directing mind” — i.e. a senior individual embodying the company through their actions and decisions — was also guilty of the offence.)

“Where you have large organisations, with several layers of management, it becomes very difficult for this test to be reached,” explained Adrian.

Responding to a question from two listeners, who, referring specifically to the Lion Steel case, asked whether it is right that individual gross-negligence manslaughter and/or health and safety charges could be dropped in return for a guilty plea by a company to corporate manslaughter, Adrian stressed that such bargaining is commonplace in health and safety prosecutions.

“For a director, if the company is convicted, then he is looking at a fine for the company, versus possible imprisonment [if he is convicted on an individual charge under, say, s37 of the HSWA]. So the impetus to promote that deal is enormous.

“Is it right that someone who should be prosecuted can escape prosecution? No, but those are the kinds of compromises that take place, in pragmatic reality.”

Kevin Bridges highlighted that in the MNS Mining case, unlike the others that have so far come to court, no charges of gross-negligence manslaughter are being brought in parallel against directors; however, the mine manager — an individual below the company’s main board — is facing such a charge.

Asked to what extent senior managers and directors might hide behind the safety manager and use them as a scapegoat to avoid prosecution under the 2007 Act, Nick McMahon, from Reynolds Porter Chamberlain, pointed out that the definition of senior management — i.e. someone who plays a significant role in the management of an organisation’s activities — is such that a company could still face a charge of corporate manslaughter even if the board were not directly at fault.

On this matter, Mike Appleby, from Housemans, referred to the judge’s remarks in relation to the HSWA 1974 prosecution of Balfour Beatty Rail Infrastructure Services in 2005/6 over the Hatfield rail crash, and, in particular, the role of Nicolas Jeffries — a civil engineer who was responsible for enforcing Railtrack standards for the firm. According to the judge Mr Jeffries, although not a member of the board, in this part of his job “reigned supreme” and could therefore constitute a “directing mind”.

Staying on the theme of transport, several listeners wanted to know if a work-related road death would fall into the bracket of corporate manslaughter. Paul Verrico, a lawyer at Eversheds, pointed out that the HSE does not see driving for work as an enforcement priority but more a matter for the Police, except in cases where there is evidence of a link to management-systems failure.

He told the audience: “It is not a case where if an employee is using a handheld mobile phone [and causes a road death], then the company will face a corporate-manslaughter charge.”

However, he did refer to a case in 2000, in which Roy Bowles Transport was convicted of manslaughter after one of its lorry drivers, known by the firm to have worked excessive hours, fell asleep at the wheel and caused the death of two motorists.

Despite much criticism of the 2007 Act for not resulting in more companies being brought to account for serious wrongdoing that have resulted in deaths, Nick McMahon did point out that its introduction had had the effect of “zooming health and safety up the corporate agenda” — not least because of the substantial penalties compared with fatal incidents prosecuted under the HSWA, and the potential reputational damage associated with a conviction.

For anyone who missed the live discussion, or who attended but would like to listen again, the 45-minute webinar will be available on demand on the SHP website in the next few days — please visit www.shponline.co.uk/shp-webinar-corporate-manslaughter.

SHP is hosting a traditional seminar on this subject at the SHP Legal Arena at this year’s Safety & Health Expo. Steffan Groch, from DWF, who represented Lion Steel Equipment Ltd, will be speaking at 11am on Tuesday, 14 May — for more details, see www.shponline.co.uk/shp-legal-arena-2013

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