In this blog we look at the recent prosecution of Lion Steel Limited under the Corporate Manslaughter and Corporate Homicide Act 2007.
On the 20th July 2012 the Court dealt with the third company to be prosecuted under the Corporate Manslaughter and Corporate Homicide Act 2007. Lion Steel Limited was convicted of Corporate Manslaughter and the guideline fine for a company is £500,000. However, the Court made its largest fine to date, albeit still below the £500,000 stipulated in the guidance. The fine imposed was £480,000.
CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007
This third case was of particular interest as it is generally felt that the legislation and associated guidance has not yet been fully tested on a large scale company. Lion Steel is the largest of the companies prosecuted to date.
By of comparison, Cotswold Geotechnical Holdings were the first company to be convicted under the legislation. Due to their financial difficulties, Cotswold, with an annual turnover of only £300,000, were fined £385,000 payable over ten years. Unfortunately, they went into liquidation shortly thereafter.
Even the conviction of JMW Farms Limited (County Armagh) but this did not provide any clarity on the approach to be adopted by the courts as they had a significantly higher annual turnover of £1,000,000 yet attracted a fine of £187,500 plus £13,000 in costs. The courts in this case indicated they had applied 25% reduction to reflect the fact that the company pleaded guilty but it was not clear, and remains unclear, why the courts again are so far below guidance.
Lessons for Directors
1. Investigation and prosecution is happening. Your policies and procedures, therefore, need to reflect the risk.
2. Health and safety, particularly surrounding possible death case, needs to be reviewed on a regular basis (how frequently depends upon the type of industry you are in).
3. The financial impact upon businesses means that all directors and shareholders should be asking the question about safety issues on a regular basis.
How We Can Help?
We can provide training to shareholders and directors to help support companies bring in safeguards and avoid problems. Bennett’s Legal can take over and manage your response in the aftermath of an incident. We can provide advice for directors who are being interviewed under caution and represent the company or individual directors before the courts. To discuss any concerns you might have, please telephone us on 0844 472 2378