Morgan Russell Solicitors

Corporate Manslaughter

Update R v Lion Steel Equipment Ltd (20 July 2021):

In 2011 a steel company (Lion Steel Equipment Ltd) was charged with corporate manslaughter following the death of an employee in May 2008 and a lengthy investigation.  Following the guilty plea, in July 2012 the company was sentenced to a fine of £480,000 to be paid in instalments over four years and ordered to pay the prosecution costs of £84,000 within two years.   This is only the third conviction under the Corporate Homicide Act 2007. 

Three of the company’s directors were also charged with gross negligence, manslaughter and failure to discharge their duties under the Health & safety at Work Act 1974 for failing to ensure the safety of their employees at work.  At the trial in June 2012, the directors were either acquitted or had the charges against them dropped in return for the company’s guilty plea to corporate manslaughter.  Judge Gilbart QC pointed out that the office of director does not of itself create a personal duty of care to every employee, an argument proposed by the CPS, but that there is an omission if such a director was under a duty to act (e.g. where an individual director had responsibility for addressing safety).  The prosecution may have cast its net too wide in attempting to prosecute the directors as well as the company but it seems this may be a negotiating tactic being employed by the CPS, which in this case may well have helped secure the guilty plea.

Whilst the fine the company received is consistent with the published sentencing guidelines in light of a guilty plea, the fact that the judge in the case extended the period for payment of the fine and costs reflects the submissions made by the company not to prejudice the company’s trading and its current employees (given that this is the largest company to be convicted so far).  In passing sentence, his Honour Judge Gilbart QC said,

"I am very mindful of the 142 people who work at Lion Steel. I would regard it as most regrettable consequence, which would add to the terrible consequences of Mr Berry's death, if the effect of an order of this court were to imperil the employment of his former colleagues and those who would have been had he lived... the commission of this offence requires significant punishment, and I am quite satisfied that, with a longer payment period, that a loan can be raised on the buildings."

This is a reminder that companies and directors need to be mindful of the offences of corporate manslaughter and manslaughter by gross negligence.

This checklist sets out the factors which can lead to your business being prosecuted for corporate manslaughter and the penalties for breaching the legislation.

What are the offences?

Your business will be guilty of a corporate manslaughter offence if all of the following apply: 

  • The way in which your business’ activities are managed or organised causes a person’s death.
  • The person’s death is the result of a gross breach of a relevant duty of care owed to that person.
  • The way in which your business’ activities are managed or organised is a substantial element of the breach.

Who does the offence apply to? 

  • Corporate manslaughter legislation applies to all businesses operating in the UK.
  • It does not apply to individuals (for example, company directors or managers). However individuals can be prosecuted for the offence of manslaughter by gross negligence.
  • If your business is prosecuted under corporate manslaughter legislation, it (and the company directors and managers) could still be prosecuted for breaches of health and safety or other laws.

What constitutes a gross breach? 

  • “Gross breach” means conduct that falls far below what can reasonably be expected of your business in the circumstances.
  • A jury must take a number of factors into account when deciding whether your business is guilty of corporate manslaughter:
    • whether your business was in breach of health and safety legislation;
    • how serious the management failure was; and
    • how much of a risk there was of death occurring.
  • The jury must also take into account a number of other factors, including:
    • any health and safety guidance relating to the breach; and
    • whether there were any attitudes, policies, systems or accepted practices in your business that were likely to have encouraged a management failure.

What types of duty of care are covered? 

  • The legislation deals primarily with health and safety matters, but is not limited to these. It may be possible to prove a duty of care in a different context (for example, under environmental law).
  • The types of duty of care covered include a duty owed by a business to employees, a duty owed as an occupier of premises and a duty owed in connection with:
    • the supply of goods or services;
    • carrying out any construction or maintenance operations; or
    • carrying out any other activity on a commercial basis.

What are the penalties for breaching the legislation? 

Financial penalties  

  • A conviction for corporate manslaughter could lead to the imposition of an unlimited fine on your business. According to the sentencing guidelines, a convicted business should receive a fine that will rarely be less than £500,000 and may be in the millions of pounds.
  • Fines can be increased if there is evidence your business could have foreseen the accident and where breaches of rules were widespread within your business.

Remedial orders 

The court can impose a remedial order requiring your business to address specific failings involved in the offence. Since the court will not usually take into account any remedial costs when it assesses a fine, you may have to pay both a fine and the costs of improving your internal procedures to comply with a remedial order.

Reputational damage 

The court can impose a publicity order forcing your business to advertise that it has been convicted of corporate manslaughter. The order may include details of the conviction (for example, the amount of the fine and the terms of a remedial order).

Insurance 

Insurance cover will not be available to your business if it has been convicted of a corporate manslaughter offence. However, if you mount a successful defence, cover may be available for any legal costs your business has incurred. Make sure you check your position with your insurers.

Further Information

If you have any questions regarding the above or require additional information or assistance, please contact Debbie Turner on +44 (0)1372 461411.

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
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