Cotswold Geotechnical Case – the outcome and implications for Fellows
On 15 February 2011 at Winchester Crown Court, Cotswold Geotechnical Holdings was found guilty of corporate manslaughter. This decision, which has been highly publicised in recent days, marks the first successful prosecution of a corporation under the provisions of the Corporate Manslaughter and Corporate Homicide Act 2007.
Facts of the Case
The facts of the case in brief are these. The victim, Mr Alexander Wright, an employee of Cotswold Geotechnical (and Fellow of the Geological Society) was killed in September 2008 when the unsupported trial pit in which he was working collapsed. The trial pit was reported to be 3.8m deep. As a result, Cotswold Geotechnical and its company director, Mr Peter Eaton (also a Fellow), were charged with Corporate Manslaughter and Gross Negligence Manslaughter, respectively.
Whilst the case against Mr Eaton was subsequently dropped, in light of his ill-health, the CPS succeeded in its claim against Cotswold Geotechnical for corporate manslaughter, resulting in the company being fined £385,000, which it has been permitted to pay-off over a ten year period.
Implications for Fellows
The case of Cotswold Geotechnical highlights the fact that Fellows need to be aware that the Corporate Manslaughter and Corporate Homicide Act 2007, which came into force on 6 April 2008, now makes it substantially easier for criminal prosecutions to be brought against corporate entities for manslaughter with respect to the activities of their senior management.
The difficulties of successfully suing a company for corporate manslaughter under the old common law, which were highlighted by a number of high profile cases, including the Hatfield Rail Crash and The Herald of Free Enterprise Ferry disasters, lay in the need to establish that the acts of negligence of a senior individual which led to the victim’s death could be attributable to the company on the basis of them being the “directing mind” of the corporation. This proved to be an almost insurmountable threshold and, more often than not, companies were pursued instead under the relevant Health and Safety legislation.
A New Era for Corporate Manslaughter Liability
The New Test for Corporate Manslaughter
Under the new regime of the Corporate Manslaughter and Corporate Homicide Act (which has now abolished liability for corporations for manslaughter at common law), a claim for corporate manslaughter can now be brought where it can be established that “an organisation” has caused a person’s death as a result of a gross breach of its duty of care, that is, where the activities of the organisation’s “senior management” are managed or organised in a way which falls far below the standard reasonably expected of them in the circumstances.
In this way, the emphasis is now firmly placed on the way in which corporations manage and organise their business operations.
Who are “Senior Management”?
The term “senior management” is of potentially broad application, including any person who plays a significant role in making decisions about how either the whole or a substantial part of the corporation’s activities are to be managed, or persons who undertake the actual managing or organising of the whole or a substantial part of the activities themselves.
In the case of Cotswold Geotechnical, the claim was brought on the basis that Mr Wright’s death had been caused as a result of the company’s failure to follow common industry practice/guidance by ensuring that the trial pit was supported, which the Judge found to be wholly and unnecessarily dangerous”. HSE guidance (and common industry practice) is that 1.2m is the maximum depth of trial pit that should be entered where no support is in place.
To whom is a duty of care owed?
Another notable aspect of the new legislation of which Fellows should be aware is that the duty of care owed by corporations is deemed to exist in a potentially wide range of circumstances. For example: where an organisation is acting in its capacity as an employer, it owes a duty of care to its employees as well as to other persons working for the organisation or performing services on its behalf (such as contractors); as the occupier of premises; in circumstances where the organisation is carrying on construction or maintenance operations, or, in respect of any other commercial activity undertaken by the organisation.
Sanctions for Corporate Manslaughter
The sanctions for corporate manslaughter include requiring the corporation to publicise its conviction, unlimited financial penalties and the imposition of orders requiring the company to undertake remedial action, where relevant.
Are individuals liable under the new legislation?
The Corporate Manslaughter and Corporate Homicide Act does not deal with liability of individuals, which continues to be governed by a claim for Gross Negligence Manslaughter under the provisions of the Health and Safety at Work Act 1974.
In essence, a director, company secretary or other manager of the company may be held personally liable where their gross negligence results in a breach of duty of care owed to the deceased victim. The term “gross” negligence is an important element and in this context has been held by the courts to require more than establishing mere negligence; referring to a situation where the defendant has exhibited “such disregard for the life and safety of others as to amount to a crime”.
Gross Negligence Manslaughter carries with it the maximum term jail sentence of life imprisonment, although current court guidelines indicate that sentences are often lower.
The Key Message for Fellows
The decision in Cotswold Geotechnical serves as a stark reminder to all Fellows of the need to be aware of the potential impact which relevant legislation may have on their professional activities. In particular, regarding both the existence of potential corporate and personal prosecution whilst acting in a company management capacity, as well as the obligations owed by organisations to Fellows whilst acting in their capacity as employees/contractors.
In particular, Fellows who are acting in a senior management capacity should ensure that they are undertaking all necessary precautions (such as following industry-standard practice and guidance), to assure themselves that in carrying out their activities on behalf of the company they are providing a safe working environment for employees and contractors as well as to any foreseeable potential onsite visitors. Conversely, those Fellows carrying out the work, such as engineering geologists, are entitled to expect employers/contractors to undertake all reasonable and stringent measures to ensure their health and safety in the working environment, particularly in view of the very real threat of corporate liability being imposed under the new legislation.
Further guidance on these issues is available from the HSE website at www.hse.gov.uk/corpmanslaughter/faqs.htm
. Guidance has been issued by the Institute of Directors in conjunction with the HSE which sets out good practice for directors in carrying out their responsibilities for health and safety matters, which may be found at www.hse.gov.uk/leadership/index.htm