The conviction of Cotswold Geotechnical Holdings for corporate manslaughter will herald an avalanche of similar cases, lawyers today warned.
As the sector waits to discover the company’s sentence in this first conviction, due to be announced at 2pm today, lawyers said the knock-on effects could be detrimental.
"In my view, this case heralds an avalanche of similar cases which will come before the criminal courts," said David Foster, head of dispute resolution at lawyers Barlow Robbins.
"The Corporate Manslaughter & Corporate Homicide Act 2007 changed the law. Now a serious offence is committed if an organisation runs its activities in a manner which is grossly negligent. The law before the act lulled directors into a sense of security, because they would only have been guilty of an offence if they had a ‘guilty directing mind’ for the organisation. The burden is much lower now and cases will increase."
Craig McAdam, solicitor in the business crime and regulation team at law firm Russell Jones & Walker, said the real test of the act was yet to be seen.
"The Corporate Manslaughter Act was enacted to address the difficulties of convicting larger organisations, so this case doesn’t truly test its full scope," he said. "The fact that Cotswold Geotechnical Holdings is run by a sole director who was on-site immediately prior to the accident taking place made it a relatively easy case to try. The real test will come when a significantly larger company with a complex management structure is prosecuted. The Corporate Manslaughter Act enables prosecutors to go after senior managers straight up the management chain. Therefore we won’t see what the act can really do until a company with a significant management chain is brought to trial," McAdam said.
Gloucestershire-based Cotswold Geotechnical Holdings was charged with corporate manslaughter following the death of 27-year-old Alex Wright in September 2008. Wright was a junior geologist investigating soil conditions in a deep trench on a development plot in Stroud when it collapsed and killed him.
In convicting the company on Tuesday, the jury found that its system of work in digging trial pits was wholly and unnecessarily dangerous. The company ignored well-recognised industry guidance.
McAdam added that the case hadn’t completely demonstrated the detrimental knock-on effects that a corporate manslaughter conviction could have on a business, as Cotswold Geotechnical Holdings is essentially a non-trading entity at the moment.
"Companies prosecuted in the future may be negatively affected by the attention," he said.
"In addition, under the act, they could find themselves subject to publication orders requiring them to disclose their corporate manslaughter conviction. This aspect of the act has yet to be fully tested and could potentially be very detrimental to the ongoing credibility of a business – possibly even more so than a fine."
Jonathan Grimes at Kingsley Napley, an expert in health & safety law, agreed that there was still a long way to go.
"This conviction and today’s sentence will be a relief to the CPS," said Grimes, "but public confidence in the state’s ability to hold negligent companies to account will only return with the successful prosecution of a large corporate entity following a large-scale industrial incident with multiple fatalities. History is littered with failed prosecutions in these cases, such as those following the Zeebrugge ferry and Hatfield rail disasters."
The level of the fine Cotswold Geotechnical Holdings receives today will be determined by the turnover and financial circumstances of the company.
• We will update this story on our website after 2pm. Please go to www.hrmagazine.co.uk
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