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May 16, 2012

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SHE 12 – Managers in the firing line

The rise in the prosecution of individuals for health and safety offences alongside their companies was charted and explained by Hilary Ross, a partner at law firm DWF, in an address to an SHP Legal Arena bursting at the seams today (16 May).

According to the HSE, there has been a 32 per cent increase in the prosecution of individuals since 2008, despite the fact that the HSE does not have a specific policy of prosecuting individual employees or directors.

So why has there been this increase? “There are many reasons,” said Hilary. “We have seen that health and safety cases have become more challenging. As defendants have become more sophisticated in their defence, so the HSE has become more sophisticated in how they investigate.”

The two corporate manslaughter cases that have been, or are about to be, heard in England have married together the corporation being prosecuted with the individual director. “I can see pigeons coming home to roost in the case of Lion Steel Equipment,” she said. In this case, three of the firm’s directors were charged with gross negligence manslaughter as well as the company being charged with corporate manslaughter following a worker’s death after a fall. The case is due to be heard in June 2012 and DWF are defending the company. In the first successful prosecution under the Corporate Manslaughter Act Cotswold Geotechnical Holdings was fined £385,000 in 2011

Hilary went on to explain the circumstances under which an individual can be prosecuted:
• The person must be employed
• They must be in the course of their employment
• They must either have not taken reasonable care of their own or someone else’s health and safety or cooperated with their employer to allow the employer to comply with their statutory duties.

The facts and circumstances of each case are key in determining whether an individual will be prosecuted, she said. Individuals can be prosecuted under s7 (employees), s37 (directors and managers), or s8 or s36 (other individuals) of the HSWA 1974. They can also be prosecuted under the common law offence of gross negligence manslaughter.

In the last five years there have been 55 health and safety prosecutions of individuals. In deciding whether to prosecute, the HSE will look at what employee did and how that fitted in with their responsibilities, but will also look at other aspects, as the employee is not expected to compensate for the employer’s failure, including common practice at the company and whether any previous warnings have been issued.

She cited the case of Michael Cunningham where he failed to ensure a bucket was safety attached to an excavator. It fell and killed another employee as a result of his actions. “However,” Hilary commented, “the amount of Michael Cunningham’s fine was not stunning, as it was only £700, so I don’t know what kind of message this sends out.”

Hilary went on to talk about prosecutions under s37 of the HSWA, under which there have been 39 directors prosecuted in the last five years. “The question we get asked most about as solicitors,” she said, “is – because I have ‘manager’ in my title, can I be prosecuted?” Hilary explained that only a manager who is part of the company’s controlling mind comes under s37 of the Act. “The key to bringing a prosecution under s37 is the scope of the manager’s position within the company. Directors can be prosecuted when the company commits an offence to which the individual has consented, connived in some way or been negligent or turned a blind eye.”

With regard to what the HSE looks at when deciding whether or not to prosecute a director, Hilary said they will look at whether the matter was in the effective control of the director. “That means we rarely, if ever, see a FTSE100 company director being prosecuted – it tends to be small SMEs,” she observed. This is because the more actively involved in a company the director is, the more likely they are to be prosecuted. She added that the HSE is increasingly looking at internal audits as well as whether they company or individual has been given a previous warning.

Hilary also observed that there is a tendency not to go after individual directors when they are the sole director of a company. “But we are increasingly finding that unscrupulous one-man-bands are winding up their business rather than face possible prosecution,” she warned.

Going on to talk about prosecutions under other sections of the HSWA, Hilary said that under s8, a company or a person who contributed to, or caused an offence, can be prosecuted, although there have only been three prosecutions under this section in the last 10 years.

S36, however, is the “bane of the life of health and safety advisers,” she said. Under this section, if an individual gives the wrong advice, causing a company to commit an offence, the adviser themselves can be prosecuted. There have been 17 prosecutions of individuals under this section in the last 14 years.

Finally, individuals can still be prosecuted where there has been a fatality under the common law offence of gross negligence manslaughter. There have been 10 cases of this in the last five years.

“We are finding that while corporate manslaughter does not require individuals to be prosecuted, it seems to be becoming a common trend that individuals are being prosecuted along with the company,” Hilary reiterated.  In the Lion Steel corporate manslaughter case for example, not only the company is being prosecuted, but also the three individual directors. “This is bringing unforeseen problems,” she said, because where the director is being prosecuted, the evidence is slightly different from the company’s evidence.” I think that while it might be well intentioned for the CPS and Police to look at prosecuting individuals in the circumstances it is going to open a can of worms in the future.

The penalties for individuals include imprisonment (all the cases of gross negligence manslaughter in the last five years), and fines, which are more common and tend to be around £2-3000 for s8 and s36 offences and an average of around £4000 for s37 offences. Directors can also be disqualified for s37 offences.

Finally, she added somewhat reluctantly that a small minority of HSE inspectors are misusing their powers to carry out investigations since they are more likely to get a conviction of a company if an individual is investigated. “It is only natural that an individual being investigated is not going to cover the company’s back,” she said.


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12 years ago

Vulnerability to prosecution of SHE managers and Directors seems to me a side issue.
The reason for the relative* increase in accidents and occupational fatalities, since 1970, results principally from folk knowing little of the science behind the tasks and from not having practical experience or the ability to undertake them. There is far too much focus on law, box-ticking and other window dressing.

(* per numbers exposed to risk)

12 years ago

If you are a Company Director responsible for the H/S & W of your employees and or others affected by your undertakings, is it not incumbant upon you to ensure that the company has robust procedures to mitigate risk, and that these procedures are evidenced in the work place by suitable monitoring and reporting structures, back to the point of directorship?

If you claim not to be aware as a Director, why is this situation either tolerated or allowed to develop if using robust procedures?

12 years ago

The accusation that individuals are not covering the companies back is typical Corporate Lawyer speak.

If the company is not guilty of an offence why worry, and if the individual is put forward as a target by the company why show loyalty to an employer?

Having been interviewed under caution (PACE) myself as a SHEQ Advisor and then having interviewed people as an IOC for HSE, both voluntarily and under caution, the degree and extent of deception by both employers and employees is staggering.

12 years ago

What about employers that refuse to listen to those who raise H&S matters, those that are not complying with the regulations? How are we suppose to tackle these employers? Hilary’s comments: • They must either have not taken reasonable care of their own or someone else’s health and safety or cooperated with their employer to allow the employer to comply with their statutory duties. employers break the rules and do not listen to employees!