An aerospace firm has been ordered to pay £725,000 after being found guilty of corporate manslaughter. At the Old Bailey on 24 July, the Company was found guilty of breaching Section 1(1) of the Corporate Manslaughter and Corporate Homicide Act and Section 3(1) of the Health and Safety at Work Act 1974 (HASWA).
Mr Bowers died at the Company’s warehouse in 2013 after becoming trapped under a stack of stringer (strips of metal used in aircraft structures) when they fell as he made his way down a designated safe walkway.
The case outcome
The Company was fined £600,000 for the corporate manslaughter breach and £400,000 for the HASWA offence. The fines will run concurrently, so the Company will pay a total of £600,000 in fines plus £125,000 in costs. This represents the 14th conviction for Corporate Manslaughter in the UK and reinforces the view that prosecutions under the Act are still continuing to gather momentum. The Company has a turnover of approximately £70million and pre-tax profits of £1 million, meaning the fine is extremely significant both for the size of the corporate entity and as a measure of the fines being imposed. It is striking that this is the largest fine handed down by the courts for this offence to date, £100,000 higher than the fine handed down to Sterecycle where an employee was fatally injured in an explosion at a waste plant when the door to an autoclave blew out under pressure.
The Crown Prosecution Service stated that the stringers, delivered at the company's request, had collapsed as a result of the dangerously high levels of stock in the warehouse. Particular failings included allegations that the Company had “ignored repeated and clear warnings about the dangers of their stock levels, refusing to take action partly because it was considered too expensive”. The Company was warned ahead of the accident that there were potentially disastrous consequences if nothing was done to address this issue. The fine handed down in this instance is testament to the fact that the presence of aggravating factors, namely failure to heed warnings or advice, whether from regulators such as the HSE, or employees (especially Trade Union or Health and Safety representatives) or other persons; or to respond appropriately to 'near misses' arising in similar circumstances; and cost-cutting at the expense of safety will exacerbate fine levels.
The new guidelines
The New Draft Sentencing Guidelines explicitly state that the most significant effect is that large companies where there is evidence of high culpability and the placing of “profit before safety” culture will be the hardest hit. If, as anticipated, the new Draft Sentencing Guidelines are implemented in early 2016, large organisations committing Corporate Manslaughter could face fines of up to £20 million with fatal health and safety offences carrying fines of up to £10 million. Especially in more serious offences with aggravating circumstances, the courts will give no longer have regard to the fact that potential fines might have the inevitable effect of putting a company out of business. Companies whose turnover significantly exceeds the guidelines figure of £50m for a “large” company may be “very large” companies under the guidelines and as such run the risk of even higher fines, particularly following a recent decision in the Court of Appeal applying the similarly constructed Environmental Sentencing Guidelines.
The growing number of corporate manslaughter prosecutions combined with the anticipated implementation of the new guidelines should alert those responsible for corporate governance to the need to ensure they have obtained competence advice and support in relation to their health and safety obligations.
Author: Simon TingleThis information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.