Simon explains; Developments in the law in recent years mean that health and safety failings by directors are now more likely to lead to the criminal prosecution of their companies and of directors as individuals.
On 11 May 2011, the Court of Appeal turned down our application for permission to appeal against the sentence and conviction of our client, Cotswold Geotechnical Holdings Ltd, which was the first company to have been charged under the new corporate manslaughter legislation. They ruled that the trial judge had been right to set the fine at £385,000, even though this represented 250% of the turnover of this small company in its last financial year. The managing director had also been charged with the offences of gross negligence manslaughter (which usually carries a prison sentence of a year or more) and breach of section 37 of the Health and Safety at Work etc Act 1974. We needed to fight three court applications to get the personal charges dropped on the basis of his ill health.
This latest judgement underscores developments in the law in recent years - health and safety failings by directors are now more likely to lead to the criminal prosecution of their companies and of directors as individuals. A variety of new risks combine to place a spotlight on the steps taken by directors to manage health and safety within their organisations. If directors do not act, they and the organisations they lead could find themselves with criminal convictions.
However, it is not all doom and gloom. As the importance of compliance with health and safety requirements has increased, so too has the clarity as to how to comply. Now is a time of opportunity for directors because clear guidance has been produced by the Institute of Directors and the HSE setting out what directors have to do in order to comply with the law and thereby reduce both the risk of accidents happening and vulnerability to prosecution - "Leading Health and Safety at Work: Leadership Actions for Directors and Board Members" ("the IoD Guidance") (http://www.iod.com/Home/Business-Information-and-Advice/Being-a-Director/MainWebsite/Resources/Document/HSE_guide.PDF).
New Risks
What are the new risks?
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- First, in relation to fatal accidents, we now have the new statutory offence of corporate manslaughter, which Cotswold Geotechnical was found to have committed. Corporate manslaughter can be committed by an organisation where the way in which its activities are managed by its senior management causes a person's death.
- Second, the stakes have been raised by the courts' new power to imprison a director or other employee who is convicted of a mainstream health and safety offence for up to two years.
- Third, new sentencing guidelines were published last year, which suggest we will see increasing levels of fines following convictions for work related fatalities.
Practical Advice
The key lesson for directors to learn from developments in recent years is the importance of ensuring that they are proactive in managing safety; they can no longer adopt the approach of simply dealing with issues as they arise. It will depend on all the circumstances as to how far each director ought reasonably to go, and the reasonable degree of involvement should take into account that specific director's role in the organisation.
The main practical advice is for senior management to familiarise themselves with the IoD Guidance and consider how best to implement it to set the right "tone at the top".
In the unfortunate event that an accident does occur within your organisation, it is important that managers know how to protect staff at the HSE interview stage and conduct an internal investigation that won't need to be disclosed, even if it contains damaging admissions. These procedures should be captured in an incident response protocol that has been drafted with specialist legal input. There are tried and trusted ways of cooperating with the authorities but nonetheless avoiding the legal pitfalls.
We are operating in an environment in which it has never been more important for directors and senior managers to set the right "tone at the top", in order to protect themselves and their organisations from criminal prosecution.
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