This article first appeared in Mining Journal.
The trial of MNS Mining after the Gleision mine disaster and the introduction of new sentencing guidelines are reminders for mining companies of the consequences of corporate manslaughter and the need to have adequate health and safety controls in place.
In 2008, the much heralded Corporate Manslaughter and Corporate Homicide Act 2007 came into force. It was intended to usher in a new era of corporate responsibility in the wake of a series of failed prosecutions against large organisations for high profile disasters, such as the capsize of the Herald of Free Enterprise and the Southall and Hatfield rail crashes.
Seven years later, however, the number of convictions under the act stands at just 16 and last year saw a number of failed corporate manslaughter prosecutions in the courts, including the largest prosecution to date against MNS Mining, which was acquitted of corporate manslaughter for the 2011 Gleision mine disaster, which resulted in four fatalities.
Some argue that the low number of convictions reflects improvements in health and safety standards in the UK; there has not been an incident of the likes of the Hatfield rail disaster since the act came into force. Others take the view that the new act has not overcome the evidential issues under the old law and that the threshold for securing corporate manslaughter convictions remains too high. There is also concern that the police squads that are assigned to investigate the fatalities are ill-equipped to deal with such complex corporate offences.
Prior to the new act, for a company to be liable for manslaughter, it was necessary to prove gross negligence by a single controlling mind of the company, usually a director or other senior officer. Combined failings of various individuals across a company could not be aggregated to meet the test. The evidential difficulties with identifying this level of individual management failure in a large organisation meant most prosecutions failed.
In the face of lobbying by trade unions, families of victims and the health and safety industry, the new offence of corporate manslaughter (or corporate homicide in Scotland) was introduced to rectify this defect in the old law. Under the new act, a company will be guilty of corporate manslaughter if the way in which its activities are managed causes a person’s death and amounts to a gross breach of the duty of care owed by the organisation to the deceased.
“As the focus of any corporate manslaughter investigation will be on identifying senior management failings, company directors and managers should understand their health and safety obligations and those of their organisation, ensuring that they are familiar with the company incident response plan so that they are prepared to deal with a criminal investigation by the police rather than the Health and Safety Executive in the event of an incident”
Notably, the requirement for a gross breach of a duty of care at a senior management level remains. Under the 2007 act, an organisation will only be guilty of the offence if the way in which its activities are managed by its senior management is a “substantial element” of the breach. As yet, there has not been any judicial consideration of who qualifies as a senior manager or what constitutes a “substantial element” of the breach as all of the prosecutions to date have been of relatively small companies, where senior management (usually a sole director) has been closely involved in the day-to-day operations of the business.
For example, in the Gleision case, it was accepted that the manager of the mine was a senior manager and in charge of the mine’s operations, there was therefore no doubt that any failing by the mine manager equated to a failing by the company.
Fines for corporate manslaughter are unlimited. Sentencing guidelines published shortly after the act was introduced stated that fines would “rarely be less than £500,000 (US$760,000)”. However, most fines have fallen well short of this anticipated minimum and the highest fine to date is just £600,000, which was levied against CAV Aerospace, after an employee died at its warehouse at Cambridge airport in January 2013.
In response to concerns raised about the level of fines for serious health and safety offences, including corporate manslaughter, new sentencing guidelines have recently been published by the Sentencing Council, which will come into force on 1 February 2016. Courts will be obliged to follow the guidelines when sentencing organisations for corporate manslaughter.
The guidelines set out sentencing ranges within which a company should be fined for an offence. For the first time, the turnover of the offender will be used to identify the starting point of the fine. For small business (those with turnover of less than £10 million), fines will start at £540,000. The starting point for medium organisations (turnover of £10 million to £50 million) is £2 million and for large organisations with a turnover of more than £50 million, fines will start at £5 million and could be up to £20 million. The sentencing ranges reflect the different levels of harm and the culpability of the offender and are subject to further adjustment within the category range for aggravating and mitigating factors.
Once this process has been undertaken, and the level of fine calculated, the court will then step back to review the sentence and, if necessary, adjust the final amount of the fine to ensure that it is proportionate. This may require the court to consider other factors such as the organisation’s profit margins, the potential impact of the fine on the offender’s ability to improve conditions in the organisation and on employees, service users, customers and the local economy.
As ever, prevention is better than cure and companies should ensure that their health and safety policies remain up to date, with appropriate risk assessments in place and health and safety leadership demonstrated from the top down. As the focus of any corporate manslaughter investigation will be on identifying senior management failings, company directors and managers should understand their health and safety obligations and those of their organisation, ensuring that they are familiar with the company incident response plan so that they are prepared to deal with a criminal investigation by the police rather than the Health and Safety Executive in the event of an incident.
A police investigation invokes the use of criminal powers of document seizure, evidence gathering and interviewing of witnesses. The controlled management of such invasive investigations is essential to prevent the police investigation overrunning the operations of a business.
Notwithstanding the relatively low number of convictions since the act came into force, there is no doubt that the prosecuting authorities will select a high profile test case to show that the act is fit for purpose. And with higher fines anticipated after the new sentencing guidelines come into force next year, companies with operations in the UK, and other companies which service higher risk industry sectors, are obvious targets. Whilst many of the cases arise out of the construction sector, mining operations and related activities are under close scrutiny.