Corporate Manslaughter and Corporate Homicide Act - Update

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Letter to Branches




No. 658/12
Ref EX13
Date: 29 August 2012

To: All Branches

Dear Colleagues,

Corporate Manslaughter and Corporate Homicide Act - Update

Background

The CWU was one of the leading campaigning Unions for the introduction of a new Corporate Manslaughter Act along with other Trade Unions, the Hazards Campaign and the Centre For Corporate Accountability. The last Labour Government finally introduced the Corporate Manslaughter and Corporate Homicide Act 2007 which came into force on 6th April 2008. This is an update report on the Act and the accompanying Sentencing Guidelines which both failed to go as far as we would have preferred and key major health and safety cases, prosecutions and court penalties in recent times.

History

Between 1992 to 2005 (prior to the Act) there were 34 prosecutions for work related corporate manslaughter in England and Wales but only six small organisations were convicted. Clearly that system was not working. What is important now is to ensure that processes of the Corporate Manslaughter and Corporate Homicide Act are tight enough to tie loopholes in the system and not allow it to become the next on the list of laws that corporations laugh in the face of.

Corporate Manslaughter and Corporate Homicide Act

Under the Corporate Manslaughter and Corporate Homicide Act which came into force on 6 April 2008, companies and organisations can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care. Firms which are found guilty can face unlimited fines, remedial orders and publicity orders. A remedial order requires a business to take steps to remedy any management failure that led to a death. A publicity order can also be imposed which would require an offending organisation to publicise that it has been convicted of the offence, giving the details, the amount of any fine imposed and the terms of any remedial order made. In the 4 years since the Act came into force just 3 firms have been prosecuted under the act. Many more could have been. One obvious example (Network Rail) is detailed below.

Sentencing Council Guidelines

The Sentencing Council Guidelines published in 2010 indicate that fines should rarely be less than £500,000 and may go into the millions. It recommended a starting point of a fine of 5% of company turnover for a first offence with a not guilty plea rising to 10% of turnover.

For a successful conviction the following needs to be proven; that the defendant is an organisation that causes the person’s death, that the duty of care owed by the organisation was breached due to mismanagement of activities on a senior level and that the defendant must not fall within one of the exemptions to the Act (military operations, policing, emergency response, child protection work and probation to name a few).

Lion Steel Ltd (£480,000 Fine)
After pleading guilty to an offence of corporate manslaughter, Greater Manchester based Lion Steel Ltd was recently fined £480,000 plus costs of £84,000. The fine, which is the highest that has been imposed for this offence, must be repaid in installments, with £100,000 to be paid by the end of September. Lion Steel Ltd pleaded guilty at Manchester Crown Court to the corporate manslaughter of Steven Berry at the Hyde site on Johnson Brook Road. This is the third time a company has been charged with, and now convicted for, the new offence of corporate manslaughter. Steven Berry fell through a fragile roof panel and tragically died as a result of injuries sustained in the fall on 29 May 2008. Having campaigned for many years for the new Corporate Manslaughter Law, the CWU's thoughts are very much with the victim's family at this difficult time.  All other charges against the company and its directors had been dropped.

In setting the fine, the seriousness of the offence and the firm’s ability to pay are key factors for consideration. £480,000 is a significant amount, but the judge had no desire to put the firm out of business and has allowed them to pay in installments. The Fine could and perhaps should have been much higher. The judge accepted that the company had a previous good safety record and reflected upon the potential effect of a large fine by setting the fine 20 per cent lower than that recommended by the Sentencing Council Guidelines.

From a legal perspective, we haven’t learnt a huge amount from this case. Certain issues, such as who can be considered ‘senior management’ in large firms, remain unresolved.

What we have learnt though, is that businesses found guilty of corporate manslaughter can now stand to receive substantial fines along with lots of negative publicity which is at least something but in our view penalties still remain lower than they should be.


Cotswold Geotechnical Holdings (£385,000 Fine)
Cotswold Geotechnical Holdings were the first company to be convicted under the
Corporate Manslaughter and Corporate Homicide Act 2008, and were fined £385,000.
This was £115,000 under the minimum fine suggested in the 2010 Sentencing Council
guidelines, due to its precarious financial position of Cotswold Geotechnical Holdings.


JMW Farms Limited (Co. Armagh) (£187,500 Fine)
In Northern Ireland, JMW Farms Limited (Co. Armagh) were also convicted of corporate
manslaughter offences and were fined £187,500 (a record for Northern Ireland).



Network Rail (£1 Million Fine but no Corporate Manslaughter Charge)
In December 2005, Olivia Bazlinton and Charlotte Thompson, aged 14 and 13 respectively, were killed instantly after being hit by a train at a level crossing at Elsenham station. Network Rail pleaded guilty to two charges under The Management of Health and Safety at Work Regulations and to one charge under the Health and Safety at Work Act. A risk assessment conducted in May 2001 noted the wicket-gate pedestrian crossing was “undesirably risky”, and a report three years prior to the incident had recommended automatic locking gates at the crossing, but this had never been actioned. Despite the judge damning Network Rail with allegations of “corporate blindness” and acknowledging that the company “failed to ensure that the risks were properly assessed, controlled or managed”, no Corporate Manslaughter charges were brought under the legislation at the time and the company was fined £1m within the aforementioned statutes. So, to surmise, a public crossing with considerable footfall was allowed to remain for a number of years with inadequate safety measures in place, resulting in tragedy, the company admitted fault and still charges of corporate manslaughter were deemed inappropriate! (No motivation for large organisations to commit to governing their health and safety with any real commitment).

UK's Highest Health & Safety Fines
2005 - Transco Plc, £15m Fine for health and safety breaches in relation to the 1999 massive explosion which destroyed a house in Larkhall Scotland killing the Findlay family.

2000 - Balfour Beatty and Network Rail £13.5m Fines for health and safety breaches in connection with the Hatfield rail crash, which killed four people.

2004 - Thames Trains £2m Fine  at a hearing in April 2004 after pleading guilty to two health and safety breaches in connection with the Ladbroke Grove Train Crash which happened on 5 October 1999 with 31 people killed and 520 injured. This remains the worst rail accident on the Great Western Main Line.

1997 - Four firms were taken to court over the Port of Ramsgate Gangway Collapse in September 1994 which killed six and seriously injured seven people. They were fined a total of £1.7m in 1997. Two Swedish firms, FEAB and FKAB were found guilty after they denied safety failures and fined a total of £1m between them. Port Ramsgate had to pay a £200,000 after Fine and Lloyd's Register of Shipping, which certified the walkway as sage, was fined £500,000 after admitting one health and safety charge - the first criminal conviction in its 237-year history.

1999 - Great Western Trains was fined £1.5m under the Health and Safety at Work Act in July 1999 after seven people were killed and 147 injured in the September 1997 Southall Train Crash. Manslaughter charges against the firm were dropped. The Train Driver was acquitted of seven counts of manslaughter.

1999 - Balfour Beatty was fined £1.2m in February 1999 over the October 1994 Heathrow Tunnel Collapse which put hundreds of lives at risk during
construction. Balfour Beatty admitted failing to ensure the safety of its employees and the public.  Australian engineering firm Geoconsult, which was responsible for monitoring the project, was fined £500,000.

2002 - BP Grangemouth Refinery was fined £750,000 for a major fire in the refinery pipework and BP Chemicals Ltd were fined £250,000 for a for a steam pipe explosion, occurring three days before the fire. The hearing was in January 2002.

Famous Quote
Baron Edward Thurlow, (9 December 1731 – 12 September 1806) Lawyer, Tory politicianand Lord Chancellor, once said whilst expressing his frustration at pinning wrongdoing on slippery businesses;

“Did you ever expect a corporation to have a conscience when it has no soul to be damned and no body to be kicked”

Yours Sincerely


Dave Joyce
National Health, Safety & Environment Officer