REUTERS | Juan Carlos Ulate

Corporate manslaughter law after the conviction and sentencing of Cotswold

On 15 February 2011, Cotswold Geotechnical (Holdings) Ltd became the first company in the UK to be convicted of corporate manslaughter under the Corporate Manslaughter and Corporate Homicide Act 2007 (2007 Act).

For practitioners in health and safety, the first corporate manslaughter prosecution was eagerly awaited. It was hoped that with it would come clarification of some of the controversial elements of this new offence. However, while the case has attracted much publicity, the conviction and sentence have left many still unclear how the new legislation will actually impact on individuals and companies facing prosecution under the 2007 Act.

Corporate Manslaughter and Corporate Homicide Act 2007

The 2007 Act was introduced to make companies more accountable following workplace fatalities. Under the old common law offence of corporate manslaughter, only a handful of companies were successfully prosecuted. Those were small companies whose directors had a direct hand in the day-to-day operations of the business. Proving the link to the “directing mind” was not a challenge.

The purpose of the 2007 Act is to make it easier to convict companies whose work activities cause someone’s death by linking the breach to senior management actions, rather than those who lead the business. Therefore, it is disappointing that the first prosecution under the 2007 Act was of a relatively small organisation, whose management became involved in on-site operations. It is arguable that Cotswold could have been successfully prosecuted under the old common law.

Who is the senior management?

Under the 2007 Act, one of the main concerns for businesses is precisely who in the organisation would be classed as “senior management”, whose actions could potentially land the business in court should a death arise. The Cotswold case did not require the court to undertake a detailed assessment of the meaning of “senior management” and therefore takes us little further in understanding this element of the offence.

Peter Eaton, the director of Cotswold, initially also faced prosecution for manslaughter and health and safety charges. Due to his ill health, the Crown Prosecution Service (CPS) dropped the prosecution against him and progressed solely against the business.

However, this case clearly demonstrates that the CPS has a real appetite to prosecute individuals following workplace fatalities. Although the company was prosecuted, the prosecution focused on the role played by individuals. It is interesting to note that during the court case, footage of Peter Eaton’s interview under caution with the police was played to the jury. Interviews under caution are always a very important stage of any investigation. But the impact that comments or demeanour can have on a jury watching a recording of the interview can be far greater than the impact on the trained officers conducting the interview. The importance of ensuring that directors or managers facing such formal interviews receive legal advice before and during the interview cannot be underestimated.

Approach to sentencing

The court’s approach to sentencing is interesting. On 17 February 2011, Cotswold was ordered to pay a fine of £385,000 over a 10-year period. This is a large fine given the size of the company.

In February 2010, the Sentencing Guidelines Council published its definitive guidelines for judges sentencing corporate manslaughter cases. The Council recommended that businesses convicted for corporate manslaughter should receive a fine rarely below £500,000 and it could be in the millions of pounds. However, fines of this size cannot be imposed on small businesses. The amount of the fine must also reflect the means of the offender. The level of the fine imposed on Cotswold is a clear indication that the courts are going to take this type of case seriously, even where the business is relatively small.

Other sentencing orders

The judge does not appear to have used his discretionary powers under the 2007 Act to impose a remedial or publicity order against Cotswold. In the circumstances, this is unsurprising.

Remedial orders, which require a business to take specific safety steps to prevent further accidents, will rarely be used. It would be a very bold company that failed to make any changes to its safe systems of work following a fatality. In the majority of cases, it is expected that such changes would be made well before the court case. Changes are likely to be instigated by the company itself or by the Health and Safety Executive (HSE) using its powers to serve improvement or prohibition notices.

Under the 2007 Act, sentencing judges have discretion to order a company to publicise the conviction as an incentive to make changes in the future. Arguably, a publicity order in this case would have been superfluous. Cotswold’s prosecution and sentencing have been widely reported, not just in the health and safety press, but also at national level.

Despite the level of the fine, it is the impact of the adverse publicity that is the real sentence for a business. It will be very hard for Cotswold to recover from the impact of this conviction against its name. Many businesses feared that when the 2007 Act was introduced, the adverse publicity would be more prejudicial than the level of fines imposed. This case proves those fears are well founded.

First conviction falls short of clarifying the law

This case, albeit tragic, did not require the court to give detailed consideration to the key issues that practitioners are waiting to have clarified. As a result, this case changes little. We still await the prosecution of a medium or large organisation where the key issues, posed by the 2007 Act, will have to be addressed. However, as these will be the very cases where it will be harder to secure a conviction, we may need to wait even longer before we receive any practical guidance from the courts.

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