Wednesday 29 August 2012 by Jonathan Grimes
On 3 July 2012 Lion Steel Limited became the third company in the UK to be convicted of the statutory offence of corporate manslaughter under the Corporate Manslaughter and Corporate Homicide Act 2007 (the act). The case concerned the death of Stephen Berry on 29 May 2008, who died following a fall through a fragile roof panel.
What is the significance of this conviction and can we learn anything from it about how such cases may be conducted in the future, and whether the act is proving to be a success? The route to the conviction was somewhat unconventional. Although the company was originally charged with corporate manslaughter, shortly before the trial, the judge severed the corporate manslaughter charge and the trial proceeded against the company on health and safety charges, and against three individual directors on charges of gross negligence manslaughter and health and safety charges.
Following a submission at the conclusion of the prosecution case, the cases of gross negligence manslaughter were dismissed against two of the directors. Following this, a decision was made by the company, with the agreement of the prosecution and the approval of the court, that the company would plead guilty to corporate manslaughter but that all remaining charges against the directors would be dropped.
The case does not, therefore, provide any further insights into the practical application of the act in a trial process. None of the difficulties that might have been anticipated have been explored. For example, how should a judge sum up to the jury the definition of 'gross' when the statutory definition applied to the company is different to the common law one applied to the human defendants? How, in practice, will the prosecution approach the task of proving that the activities of the company's senior management is a substantial element in the breach of a duty of care owed to the deceased?
The trial of Cotswold Geotechnical Holdings Ltd in February 2011 remains the only one, to date, of a company for the statutory offence of corporate manslaughter. The third case, JMW Farms Ltd was, like Lion Steel, a conviction following a guilty plea. While the Cotswold case showed how a successful prosecution could be brought against a small, single director company, it remains to be seen how the act copes with a larger company with greater layers of management. It had been thought that Lion Steel might have been that case to shed some light on this.
One aspect of the case that was watched with interest was the sentencing, which took place on 20 July 2012. The company was fined £480,000 to be paid in instalments by September 2015 and ordered to pay prosecution costs of £84,000 to be paid within two years. The judge indicated that he had reduced both the fine and the costs to reflect the fact that the company had offered in April 2012 to plead guilty to corporate manslaughter if the charges against the individual directors were dropped.
The two companies previously convicted of this offence, Cotswold and JMW Farms received fines of £385,000 and £187,500 respectively. The Sentencing Guidelines Council published guidance in 2010 suggesting that for corporate manslaughter the appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds. Of the three companies convicted so far Lion Steel was the largest, employing 140 people and with a turnover of £10m per annum. The judge was explicit in stating that it was his intention that the fine should not jeopardise the future existence of the company, which was his reason for providing three years within which to pay.
A Publicity Order (a requirement for the convicted company to publicise its conviction in a manner prescribed by the court) was not available in this case as the offence was committed before the part of the act came into force that gives the sentencing judge the power to make such an order. In any event the judge noted that such an order would not achieve anything more than would the publicising of his sentencing remarks.
That this is only the third conviction to be secured in the four years since the act came into force is an issue of some concern, particularly to those who had high hopes of the act's ability to deliver better corporate accountability than was previously achievable under the common law. In March this year questions were asked in parliament about the lack of prosecutions. The written answer to this question revealed that there were in the region of 50 cases under review by the Crown Prosecution Service where one of the charges under consideration was corporate manslaughter. The answer also stated that of the five cases in which the CPS had advised, that advice had only been to charge in one case (Lion Steel Ltd).
It was always understood there would be a delay in cases reaching the courts but this alone is not the reason for the small number of cases. In the same period that there have been only three prosecutions for corporate manslaughter there have been at least 50 convictions of companies for health and safety offences arising from fatal accidents occurring since the act came into force. Of course only the worst corporate failings will warrant a corporate manslaughter charge, whereas a very high proportion of fatal accidents result in prosecutions for health and safety offences. Nonetheless it is hard to believe that of the hundreds of deaths at work that have so far occurred since the act came into force only three have involved corporate failings sufficiently bad to warrant a charge of corporate manslaughter.
A factor may be the manner in which potential corporate manslaughter cases are investigated. It has always been the position that the police have primacy in manslaughter investigations, including those following fatal accidents. The police teams investigating these cases are invariably drawn from criminal investigation departments diverted, for the duration of the investigation, from their normal role investigating other forms of serious crime. Significantly the police officers involved rarely have any previous experience of fatal accident investigations.
This leads to the curious situation whereby the most serious and complex fatal accident investigations are conducted by those with little, if any, previous experience, while the Health and Safety Executive - the recognised experts in this area - are relegated to an advisory role. As a consequence, there is no doubt that potential corporate manslaughter cases are simply not being recognised for what they are.
Despite the substantial fine imposed on Lion Steel, there may be those who suggest that a deal in which a company is punished by way of a fine, to reduce, it may be speculated, the risk of one of its directors being convicted of manslaughter and sent to prison, is poor justice. The larger question whether this act is capable to tackling larger companies and more complex circumstances, remains unanswered by this case; and since there are currently no other prosecutions in the pipeline, it may remain unanswered for some time.
Jonathan Grimes is a partner at Kingsley Napley, specialising in criminal law