Strategy & Operations » Governance » Deputy Editor’s Blog: A flaw in the law?

On 15 February 2011, Cotswold Geotechnical had the unwelcome distinction of becoming the first company to be convicted of corporate manslaughter under the Corporate Manslaughter and Corporate Homicide Act 2007.

The engineering company was fined £385,000 – payable over a 10-year period – for the death of an employee in 2008 when a trench in which he was checking soil quality collapsed.

The fine, which was three times higher than Cotswold Geotech’s annual turnover, could result in the company being forced into liquidation and proves that the courts will treat corporate manslaughter more severely than if death had resulted under the old health and safety offence.

“Clearly judges will not shy away from imposing so high a fine as to put an organisation out of business,” said Michael Slade, managing director of Bibby Consulting & Support.

One of the main planks to the conviction was that the employee’s death was linked directly to how the company’s activities were managed by its senior management – activities that were described by the police as “out-dated working methods” which were conducted with a “cavalier attitude” to health and safety.

Yet, strangely, no individual employer or director was held to account and the only sanction has been a fine, which you could argue does not reflect the seriousness of the crime of taking a life.

Health and safety campaigners, such as the Hazards Campaign, have claimed that the Cotswold Geotech case has shown that a “fundamental flaw” with the new corporate manslaughter legislation is that it holds the company responsible, not the individual directors who make the decisions which lead to these disasters, and therefore no-one can be jailed.

In the case of Cotswold Geotech, the Judge commented that its principal director was, in effect, the company. According to Slade, this leaves other questions unanswered – namely in a larger organisation, which employees rank as “senior management”? And where is the boundary beyond which the breach of duty care becomes “gross”? In the Cotswold case these questions answered themselves.

We’re going to have to wait for a larger organisation to be prosecuted for the offence to get any worthwhile answers.