Freedom of Information reveal huge rise in SMEs investigated for corporate manslaughter

In the last few months four small firms/owner managed businesses have been charged with Corporate Manslaughter. Three of those investigations have also resulted in prosecutions of directors or senior managers.

A Freedom of Information request has revealed that the Crown Prosecution Service (CPS) began investigating 63 corporate manslaughter offences in 2012 – up from 45 in 2011. In 2010 there were 26 investigations, up from seven the previous year.

Of the 141 corporate manslaughter cases opened, more than 50 are being investigated for prosecution – the majority of which appear to be small firms.

Lee Hughes, Health and Safety expert at law firm Pannone, said small firms are most vulnerable because of the way the legislation is structured.

For the first time, the Act provides a statutory offence of corporate manslaughter which allows for a company to be convicted in the event that it breaches a duty of care to a deceased person and the way in which its activities were managed or organized: caused a person’s death; amounted to a gross breach of the duty of care; and the senior management was a substantial element in that breach.

Earlier this month Mobile Sweepers (Reading) Limited was charged with the offence, along with its sole director Mervyn Owens, who faces a charge of gross-negligence manslaughter, in relation to the death of an employee.

In February, Prince’s Sporting Club of Middlesex, was charged with the offence while the club’s director, Frederick Glen Walker, was charged with offences under the Health and Safety at Work Act 1974.

In January, MNS Mining Limited was summonsed for four offences of corporate manslaughter following the death of four miners in the Gleision Mine, Swansea Valley, in 2011. The manager of the mine, Malcolm Fyfield, has also been prosecuted for gross negligence manslaughter.

Last November, Norfolk Garden Centre, Belmont Nursery, which is run by PS & JE Ward and has fewer than 50 employees, was charged with corporate manslaughter following the death of an employee from an electric shock caused when the metal hydraulic-lift trailer he was towing came into contact with overhead power lines.

Hughes says: “The way the legislation is structured makes it easier for senior management failings in a small company to be linked to the breach of the duty of care in the event of a fatality in the workplace.

“In small firms, directors and senior management are at the coal face. Whereas in larger companies there are many levels of management below board level and often senior management are far removed from operations. Therefore if there is a fatality, it is very difficult to identify the senior management failure which substantially contributed to the death under investigation.”

These cases show that all companies should be as compliant as they can be with health and safety requirements, as well as following the Health and Safety Executive and Institute of Director’s guidance, Leading Health and Safety at Work.

Whilst the majority of large companies adhere to the guidelines and have the resources to do so, because they are not required to by law, the vast majority of small firms simply don’t follow the guidance or are unaware of it.

Hughes concludes by saying: “The legislation leaves small firms and owner-managed businesses vulnerable to corporate manslaughter charges and the figures demonstrate that the Crown Prosecution Services is increasingly active in pursuing those it believes have committed the offence.

“I advise all companies to ensure they are compliant with health and safety legislation, and the additional guidance around senior management responsibilities. While putting steps in place to manage health and safety and avoid senior management failings may be viewed as expensive, particularly in the current economic climate, it will protect employees. It may help to avoid tragedy but also the lengthy and expensive prosecutions which can follow.”

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