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Cotswold Geotechnical (Holdings) Limited was the first company convicted of corporate manslaughter under the Corporate Manslaughter and Corporate Homicide Act 2007. Guy Bastable, Partner at BCL Burton Copeland, offers his expert opinion.

Alexander Wright, a junior geologist and employee of the company, was killed while taking soil samples from the inside of an excavated pit two and a half years ago.

Cotswold Geotechnical was fined £385,000, or 115 percent of its annual revenue for the year of the accident, to be paid over ten years. This was despite the fact that the sentencing judge believed that the fine and payment plan could lead to the company’s liquidation. According to Mr Justice Field, this was an unfortunate but unavoidable result of the serious breach.

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The Crime

In April 2008, the Corporate Manslaughter and Corporate Homicide Act of 2007 went into effect. Previously, it had been notoriously difficult to convict large corporations of the common law offence of gross negligence manslaughter (which, until the Act, was commonly referred to as “corporate manslaughter”), though a number of small companies had been convicted.

The Act eliminates the old law’s requirement to identify and prove the guilt of a “directing mind,” a senior individual who could be said to embody the company in his actions and decisions. In a large or medium-sized organisation, such an individual is frequently removed from the events leading up to the death, making establishing his guilt for gross negligence manslaughter unlikely.

Instead, the Act focuses on how the organization’s activities are managed or organised, which is commonly referred to as a “management failure,” and whether this caused the death and was a gross breach of a relevant duty of care. Furthermore, the manner in which its activities were managed or organised by its senior management must have been a significant component of that breach. Furthermore, unlike the previous common law offence, the Act allows for the aggregation of failures by a number of senior management.

Cotswold Geotechnical did not put the Act to the test because it was a small company (only four employees at the time of sentence), and the judge determined that the company’s sole director, Mr Peter Eaton, was “in substance” the company.

Mr Eaton was on the scene shortly before the accident and was directly involved in the events that transpired. Furthermore, the company’s approach to trial pitting, for which Mr Eaton was responsible, was found to be wholly and unnecessarily dangerous, as well as to have ignored well-known industry guidance. In such circumstances, the company could have been convicted of corporate manslaughter, a previous common law offence (which no longer applies to organisations in the light of the Act).

Prosecutions and investigations

In England and Wales, the Crown Prosecution Service is in charge of prosecuting corporate manslaughter. The CPS has issued guidance requiring police investigating fatalities to consider the possibility of a corporate manslaughter prosecution, as well as looking at individual actions for possible prosecution for gross negligence manslaughter under common law. The CPS has also stated that investigations will focus far more on senior management and whether their actions or omissions contributed to the fatality than previously.

The Act broadens the range of offences available to police and the CPS when investigating or prosecuting a company or its employees following a fatal accident. Following a fatal accident, an investigation will be launched with the goal of prosecuting: *An organisation for corporate manslaughter *An organisation for violating the Health and Safety at Work etc Act 1974 *An individual for gross negligence manslaughter *A director/manager/etc for secondary liability in relation to the organization’s breach of the HSWA

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*An employee for violating Section 7 of the HSWA.

Indeed, in Cotswold Geotechnical, in addition to the corporate manslaughter charge, the company was initially charged with an HSWA violation. Mr Eaton was also charged with gross negligence manslaughter under common law and an HSWA violation. In the end, Mr Eaton was too ill to stand trial for gross negligence manslaughter or the HSWA offence, and the HSWA charge against the company was dropped after the judge suggested that it might confuse the jury. Despite the fact that the new Act explicitly anticipates simultaneous or sequential prosecutions for corporate manslaughter and a violation of health and safety legislation arising from the same set of facts, this was not the case.

Sentencing

The main penalty for corporate manslaughter under the Act is an unlimited fine. Individuals cannot be convicted of corporate manslaughter and, as a result, cannot be sentenced to a term of imprisonment under the Act, though directors and senior individuals can be sentenced to imprisonment if convicted of one of a number of health and safety offences. This includes secondary liability for organisational breaches caused by the senior individual’s consent, connivance, or neglect.

The Sentencing Guidelines Council issued definitive guidelines for sentencing organisations for corporate manslaughter or health and safety offences that result in death in 2010.

The guidelines state that there will inevitably be a wide range of fines reflecting the seriousness of the offence and the differences in the circumstances of the defendants, but they also state that fines for corporations found guilty of corporate manslaughter can be in the millions of pounds and should rarely be less than £500,000.

Fines ranging from £100,000 to hundreds of thousands of pounds should be imposed for health and safety violations that result in death.

The guidelines also state that, while a fine is intended to be a painful punishment, it must be one that the defendant organisation can afford.

In the case of Cotswold Geotechnical, representations were made on the company’s behalf that it was in dire financial straits, that it had barely broken even the previous year, that it had few assets and no reserves, and that the sole director had kept it afloat. This, however, was insufficient to bring it far below the £500,000 starting point for a company convicted of corporate manslaughter. Mr Justice Field, while acknowledging that a larger fine would force the company into liquidation, fined the company £385,000 to be paid over ten years, despite the fact that the fine and terms of payment could force the company into liquidation. “If that’s the case,” Mr Justice Field continued, “it’s unfortunate but unavoidable.” However, it is a result of the serious breach.”

The guidelines provide for payment by instalments, but, inthe case of a large organisation, the fine should be payable within 28 days. in the case of a smaller or financially stretched organisation, it is permissible to require payment to be spread over a much longer period and there is no limitation to payment within 12 months (as is the case with individual defendants) in Cotswold Geotechnical, Mr Justice Field also said that the fine marked the gravity of the offence and the deterrent effect that it would have on organisations to strongly adhere to health and safety guidance.

If Cotswold Geotechnical appeals its sentence, it will be interesting to see the approach of the Court of Appeal to sentencing an organisation of such a small size. in any event, the approach to instalments makes clear the Court’s intention to extract the maximum fine possible – or even not possible – from organisations with limited means when sentencing following a conviction for corporate manslaughter.Bearing in mind the small size of Cotswold Geotechnical, in cases of serious breach, large originations can expect much larger fines and very large organisaitions can expect fines in the millions.

Last Updated on December 30, 2021

Indra-Gupta

Author: Indra Gupta

Indra is an in-house writer with a love of Newcastle United and all things sustainable.

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