On 11 May 2011, the Court of Appeal turned down the application from our client, Cotswold Geotechnical Holdings Ltd, for permission to appeal against its conviction for corporate manslaughter and its sentence (in the first prosecution under the new corporate manslaughter legislation).
The Court ruled that the trial judge had been right to set the fine at £385,000, even though this represented 250% of the turnover of this small company in its last financial year.
The managing director had also been charged with the offences of gross negligence manslaughter and breach of section 37 of the Health and Safety at Work etc Act 1974. Following a series of hard fought court applications, these charges were dropped on the basis of the managing director’s ill health.
This latest ruling underscores developments in the law in recent years – health and safety failings by directors are now more likely to lead to the criminal prosecution of their companies and of directors as individuals.
A variety of new risks – corporate manslaughter, the option of imprisonment on conviction for mainstream health and safety offences, and the sentencing guidelines published last year in respect of corporate manslaughter and health and safety offences causing death – combine to place a spotlight on the steps taken by directors to manage health and safety within their organisations. If directors do not act, they and the organisations they lead could find themselves with criminal convictions.
However, it is not all doom and gloom. As the importance of compliance with health and safety requirements has increased, so too has the clarity as to how to comply. Now is a time of opportunity for directors because clear guidance has been produced by the Institute of Directors and the HSE setting out what directors have to do in order to comply with the law and thereby reduce both the risk of accidents happening and vulnerability to prosecution – “Leading Health and Safety at Work: Leadership Actions for Directors and Board Members” (“IoD Guidance”).
Legal benefits of compliance with IoD Guidance
The practical significance of the IoD Guidance is clear – it represents an opportunity for directors and senior managers to reduce both their personal exposure and their organisation’s exposure to criminal liability. Compliance with the guidance should assist an organisation to set the correct “tone at the top” and influence the organisation’s safety culture, which should result in a reduced likelihood of an incident occurring.
Compliance may also have the benefit of reducing the likelihood of a successful prosecution should an incident occur.
In the unfortunate event that an accident does occur, it is important that managers know how to protect staff at the HSE interview stage and conduct an internal investigation that may be privileged and protected from disclosure. These procedures should be captured in an incident response protocol that has been drafted with specialist legal input. There are tried and trusted ways of cooperating with the authorities but nonetheless avoiding the legal pitfalls.
We are operating in an environment in which it has never been more important for directors and senior managers to set the right tone at the top, in order to protect themselves and their organisation from criminal prosecution. Directors should therefore take full advantage of the IoD’s clear guidance.