On 3 July 2012 Lion Steel Equipment Limited became the third company to be convicted under the Corporate Manslaughter and Corporate Homicide Act and this may now boost the confidence of prosecutors across the UK and spur on greater numbers of corporate manslaughter prosecutions.
Having experienced first-hand the risks and disruption associated with defending corporate manslaughter cases, like Lion Steel, and with a starting point for fines of £500,000, it is clear that the stakes have never been higher...
The Lion Steel case
On 29 May 2008, Steven Berry, a general maintenance worker at Lion Steel Equipment Limited, tragically died when he stepped on a fragile roof light and fell 13 metres to the floor below. Mr Berry had gone onto the roof to locate the source of a leak at his employer’s premises in Greater Manchester. Following a lengthy investigation the company was charged with corporate manslaughter. Three of the company’s directors were also charged with gross negligence manslaughter.
The trial began in June 2012 and after the prosecution case, which lasted approximately three weeks, the Judge directed that two of the Directors be acquitted as there was no case to answer. The Judge concluded that therew as a case to answer in respect of the remaining director and as a result there was a period of discussion between the prosecution and defence before the defence case started. The result of which was that prosecution agreed to offer no evidence in respect of all remaining charges against the directors on the basis that the company would enter a guilty plea to the Corporate Manslaughter charge. Lion Steel entered a guilty plea and was convicted on Tuesday 3 July 2012.
The case raises a number of key issues in dealing with these matters, not least arising from the way in which the prosecution case was brought which we discuss below.
Insurance reports used against the company
As is often the case, the prosecution’s evidence against Lion Steel was made up of alleged failings in the company’s internal documentation. Unusually however, the prosecution relied heavily on correspondence with its Insurers, Insurance Brokers, Risk Mangers and Safety Consultants detailing health and safety concerns at the company over a period stretching back 6 years from the date of Mr Berry’s death. Concerns that it was alleged were indicative of the way that safety was managed at the site and failures with the business.
During cross examination, a director of the company’s Insurance Brokers admitted that the warnings given to companies in relation to health and safety weaknesses are often “hyped up” to encourage companies to give more emphasis to issues identified.
Regardless of however well-intentioned this practice is, if it is not a true reflection of the situation then those exaggerated warnings could end up being heard by a Court which will take them at face value and conclude that this really was the state of safety management at the time. It may also help to make a prosecution against the company easier to prove As a result it is vital to ensure both that the report is accurate but also that steps are taken to ensure that the actions to remedy any issues are recorded so that if the report ever sees a court room the true picture can be presented.
Prosecution of individuals
Three Lion Steel directors were prosecuted for gross negligence manslaughter in addition to the company. At the conclusion of the prosecution’s case, the Judge ruled that there was no case to answer for the Finance Director and the director in charge of the sister site 50 miles away: the prosecution had cast its net too wide. The Judge directed the jury to deliver not guilty verdicts on the manslaughter charges against those individuals and made clear that those prosecutions should have never been brought in the first place. However, the prosecution continued in relation to the remaining director.
It was (and still is) a concern that the CPS’s strategy for securing convictions would be to target both the company and directors in order that the CPS would maximise their negotiating power; one can see how an offer from for the company to plead guilty in exchange for the prosecution dropping charges against individuals might look like an attractive one to a director facing a risk of prison.
Costs and Fine
Lion Steel was fined £480,000 to be paid over four years. Given that Lion Steel was a much bigger business than the previous companies convicted under the Act, its fine is the largest to date. However, the fine is lower than the starting point set out in the Sentencing Guidelines which states that the appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds.
The Judge heavily criticised the CPS’s delay in bringing this case (more than 4 years had elapsed between the accident and trial) and following submissions by the company’s defence team, the Judge cut the amount of prosecution costs payable by Lion Steel by almost 50% and in doing so made a number of very critical comments about the way that the prosecution had been brought.
The Future for Corporate Manslaughter prosecutions
In April 2012, the Attorney General indicated that there were as many as 50 cases where corporate manslaughter was one of the offences under consideration.
In light of the Judge’s criticisms of the prosecution practice in this case it will be interesting to see if the apparent trend of bringing weak prosecutions against individual directors for manslaughter in addition to a corporate manslaughter charge is continued in these cases.