In light of this forthcoming case it is worth asking what impact the new legislation may have on employers, and in particular, how the verdict in this case (whatever it may be) might affect how workplace fatalities will be handled by regulators in the future.
The court will be applying the legislation for the first time and it will need to consider whether the failures in this case are sufficient to justify a conviction for corporate manslaughter, as opposed to breach of the Health & Safety at Work etc Act 1974 (HSWA). There has been much debate about the difference in the standards required under the two pieces of legislation. HSWA requires an employer "to ensure so far as reasonably practicable" the health and safety of employees and other affected persons, whereas CMCHA states that the offence of corporate manslaughter is committed if there has been a "gross breach of a relevant duty of care". Any clarification that the court can provide on the difference between these two standards will be gladly received by all employers but particularly those that are currently the subject of ongoing Police and HSE investigations following a fatality, who are currently waiting to see if and what charges may be brought against their organisation.
Due to CGH's size and comparatively straight-forward management structure, this case may not test as many aspects of the new legislation as some might expect. This case is unlikely to consider in any detail what would constitute a senior management failure under the CMCHA or test how the legislation may be applied to much larger organisations. Based on the size and organisation of the company it is possible that CGH could have been prosecuted under the previous common law test for corporate manslaughter, requiring the identification of an individual "controlling mind" responsible for the act which caused the death. In this case, Peter Eaton, a director of the company has also been prosecuted for gross negligence manslaughter.
This first prosecution, if successful, will give the court an opportunity to consider an appropriate sentence for corporate manslaughter. The new guidelines issued by the Sentencing Advisory Council on 9 February indicate that where an organisation is convicted of the new offence, the sentence should seldom be less than £500,000 and may be measured in millions of pounds. With CGH's recorded 2008 turnover of just £330,000, the case highlights the potentially devastating impact that a fine of this level could have on small and medium sized businesses and clearly illustrates how such fines could take years to pay off. At a time when many businesses are struggling in a challenging economic environment, fines starting at this level will be an especially worrying prospect.
Clearly, the potential financial penalties will be a cause of concern for businesses, but the fact that the court may also issue a "publicity order" may prove equally punishing to some. These allow the court to force a convicted defendant to publicise its conviction, together with certain details of the prosecution, on its website and in national, regional and trade publications.
CGH may not have the large complex corporate structure needed to test the full reach of the new corporate manslaughter legislation, but there is still a great deal HR professionals can learn from this case. We will be following this case and a further update will be published at the conclusion of the trial.
Alison Gray is a partner in the Environment & Safety team at national law firm Dickinson Dees.
