A Corporate Death Sentence

Introduction

On 9^th February 2010, the Sentencing Guidelines Council (SGC) published a ‘Definitive Guideline' that must be considered by every Court in England & Wales when sentencing organisations for Corporate Manslaughter & Health and Safety offences that result in death.

On 26^th April 2010, a Judge in Northern Ireland fined a large engineering firm (FG Wilson) £90,000 plus costs in connection with the death of an employee. Roy Montgomery died when he was crushed between a moving crane and a roof beam in October 2008. FG Wilson pleaded guilty at Antrim Crown Court to two breaches of health and safety legislation. In this case, the Judge commented that he was not bound by the new Sentencing Guideline in sentencing FG Wilson. We understand, however, from local press reports and interviews with the Head of the Major Investigation Team within the Health and Safety Executive for Northern Ireland that our new Justice Minister (David Ford MLA) is expected to be asked to consider adopting the Guideline for use in Northern Ireland in the near future.

The effects of this new Guideline could be hard-hitting, particularly as it provides specific scope for the imposition of punitive fines and publication of conviction details. The potential impact on an organisation's financial status, reputation and marketability is significant and should be at the forefront of corporate minds pending the outcome of the first corporate manslaughter prosecution. Jacqueline McAleese takes a closer look.

Who does the Guideline apply to?

All organisations (rather than individuals) convicted of corporate manslaughter or health and safety offences when the offence/offences cause death.

Will the Guidelines apply to sentencing of all health and safety offences?

No. The Guideline only applies to the most serious offences of corporate manslaughter/health and safety offences where an offence is shown to have been a significant cause of death. We are, therefore, concerned with harm of the most serious kind.

Where death occurs, an organisation may be prosecuted for corporate manslaughter and, in the alterative, various specific health and safety offences.

When did the Guideline come into force?

The Guideline applies to the sentencing of all organisations on or after 15^th February 2010.  This means that even if a relevant offence was committed in 2009, for example, the Guideline will be applied by the Courts if the Defendant organisation is sentenced on or after 15^th February 2010.

So, what's new?

The Guideline clearly sets out (for the first time) factors the Courts should consider in sentencing an organisation for corporate manslaughter/health and safety offences that cause death.

Serious business

The Court may have regard to the following in assessing the seriousness of the offence: -

• How foreseeable was the injury (usually, the more foreseeable the injury, the graver the offence will be)?
• How far short of the applicable standard did the Defendant fall?
• How common was the relevant breach within the Defendant organisation?
• How far up the organisation did the breach go (usually, the higher up the responsibility, the more serious the offence)?

Aggravation and Mitigation

The Court may also consider the following aggravating and mitigating circumstances: -

Aggravating factors: -

• More than one death or very serious injury in addition to the death/s in question;
• Failure to heed warnings/advice or to respond to ‘near misses';
• Cost - cutting at the expense of safety;
• Deliberate failure to obtain or comply with relevant licensing regulation; and
• Injury to vulnerable persons.

Mitigating factors: -

• Prompt acceptance of responsibility;
• High-level co-operation with the investigation;
• Genuine efforts to remedy the defect;
• Good health and safety record; and
• Responsible attitude to health and safety (an example quoted is
• consultation with experts or those affected by an organisation's activities).

Note: The unauthorised act of an employee is unlikely to provide mitigation to an offence of corporate manslaughter (which requires proof of a gross breach of a duty of care) but may mitigate a health and safety offence.

‘Killer' fines

The Court's power to impose a fine for a corporate manslaughter offence is unlimited pursuant to the Corporate Manslaughter and Corporate Homicide Act 2007.

The new Guideline, does, however, provide some insight in relation to what organisations can expect upon conviction. In particular, the Guideline: -

• Sets out factors that are likely to affect the financial penalty imposed by the Court and make it clear that the fine must have an impact on the Defendant; and
• Confirms that whilst the fine should be of a punitive nature, the Defendant should also be capable of paying it, even if payment is made over a number of years.

In addition, the Guideline provides that: -

• The Court should obtain financial information relating to the Defendant (profit, turnover and assets, preferably by reference to a three year period, including the year of the offence) before imposing a fine;
• Any correlation between the penalty imposed and turnover/profit is not appropriate;
• Appropriate fines for Corporate Manslaughter will "seldom be less than £500,000 and may be measured in millions of pounds";
• Fines for health and safety offences will "seldom be less than £100,000 (where the offence caused death) and may be measured in hundreds of thousands of pounds or more";
• A guilty plea should result in a fine being appropriately reduced;
• A large organisation should be required to pay any fine imposed within 28 days. A longer period may be imposed for a smaller or financially stretched organisation. In any event the first payment (by instalment or otherwise) should be made a short time after sentencing;
• The Court should consider the effect on the employment of innocent parties, the effect on the provision of public services cost and whether a fine may put the company out of business; and
• Whilst compensation should be dealt with in the civil courts, there may be occasional cases (for example if a Defendant is uninsured and payment may not otherwise be made) when the Court should consider making a compensation order in respect of bereavement/funeral expenses.

The Court is unlikely to take the following factors into account when imposing a fine: -

• The effect of the fine on shareholders and/or directors;
• The Defendant's ability to pay civil compensation;
• The cost of meeting any remedial order (as commented upon below); and
• Whether the fine will put the Defendant out of business (in some ‘bad' cases this may be appropriate.

Headlines

The Guideline provides that Publicity Orders (requiring a Defendant to publish details of their conviction in terms stipulated by the Court) can only be made in relation to Corporate Manslaughter offences committed after 15^th February 2010. The Guideline also provides that these Orders should be made in virtually all cases as their purpose is deterrence/punishment and that: -

• They should contain a provision to ensure that the conviction becomes known to shareholders in the case of companies and to local people in the case of public bodies;
• The Courts should consider requiring the Defendant to put a statement on its website; and
• A specific form of newspaper announcement may be ordered, subject to whether news coverage is likely in any event.

If it's broken...fix it!

The Court may order a Defendant to remedy any specific failings involved in the alleged corporate manslaughter/health and safety offence. The Guideline provides that remedial steps ought to have been taken pre-sentencing. If they have not, the Defendant will be deprived of significant mitigation.

Jacqueline McAleese
Associate
Carson McDowell