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A recent Crown Court decision again highlights the potential for the joint liability of both a company and its directors – this time with very serious consequences for two directors of a company which was found in breach of health and safety legislation.

In this case, which related to demolition work, a group of demolition workers were told to return to work after lunch, despite one worker having already fallen from the site and suffering a fractured spine, pelvis, right leg, heel and wrist. The decision had tragic consequences when, later that afternoon, another worker fell – this time resulting in his death. In addition to the two companies involved being fined a total of £490,000, two company directors were convicted of and imprisoned for gross negligence manslaughter – receiving prison sentences of eight months and six years.

What is Gross Negligence Manslaughter?

Gross negligence manslaughter is a form of involuntary manslaughter which arises from a death which is the result of a negligent (but otherwise lawful) act or omission on the part of the defendant (in this case being the two directors). An established four-stage test sets out the following criteria – for a conviction, there must have been:

  • A duty of care owed to the deceased by the defendant.
  • Breach of the duty of care owed by the defendant to the deceased.
  • Such breach must have caused (or significantly have caused) the death of the deceased.
  • Gross negligence in committing that breach.

Who can be Prosecuted for Breaches of Health and Safety Legislation?

As this case demonstrates, it is not just limited companies that can be prosecuted for a breach of health and safety legislation. All of the following (and more) can also be prosecuted:

  • Company directors.
  • LLPs, traditional partnerships, unincorporated business, associations, individual employers and sole traders.
  • Landlords of property/premises where an incident occurs.
  • Fellow employees.
  • Suppliers of equipment (including designers, manufacturers, importers etc).

Other Likely Consequences of a Breach

As well as substantial fines (which are routinely in the hundreds of thousands of pounds) and the prosecution of individuals – in this case the two company directors – businesses and business owners should also be aware of the wide variety of other ways in which a conviction for breach of health and safety legislation can impact on them, including in particular:

  • Serious reputational damage.
  • Criminal liability of the company – for corporate manslaughter.
  • Liability to pay the prosecutions legal costs.
  • Refusal of insurance providers to pay out or inability to obtain insurance in the future.

What can be done to minimise the risks?

Companies can minimise the risks of (i) an accident taking place and (ii) their liability should an accident take place by ensuring that the following is adhered to at all times:

  1. Avoid high-risk work situations where possible.
  2.  Follow best industry practices and ensure all procedures (in particular, those involving high risk) are kept up-to-date, regularly reviewed and kept in line with advice issued by any relevant regulatory bodies, and current health and safety legislation.
  3.  Supply workers with the latest in safety equipment and training, whilst also ensuring that regular appraisals and opportunities for employees to provide feedback occur.
  4.  Ensure sites are well managed, overseen by experienced and suitably qualified managers and that best practice is followed at all times.
  5.  Subscribe to relevant industry regulatory bodies and work to be recognised as meeting industry standards where possible.
  6.  Regularly review Health and Safety Executive (“HSE”) advice – the HSE offers comprehensive guidance on minimising the risks of working in high-risk environments (such as at height) and regularly publish an array of guidance, which is constantly kept under review.
  7.  Check your company’s existing insurance policy includes legal expenses cover in the event of an investigation and a criminal prosecution being brought against the business for a health and safety-related breach.
  8.  Whilst most insurance policies cover legal defence costs, ensure that the prosecution of a member (or members) of staff (particularly senior managers/directors), fines imposed and even potential prosecution legal costs are also covered.
  9.  Although some insurance companies will have a panel of preferred lawyers, remember that a business is always entitled to be represented by lawyers of its own choice.

Why is this decision significant?

The judge’s decision in this case follows my recent articles on Corporate Manslaughter and the potential for joint liability of both a company and its directors to arise and again highlights that unlawful acts/omissions committed by a company (or other legal entity) are likely to lead to personal liability arising – on this occasion significant custodial sentences.

Expert advice on companies and offences committed by companies/directors

Our team of specialist commercial, corporate and criminal lawyers are here for you, and your business, should you require any help or advice in relation to the above. Bray & Bray have three main offices across Leicestershire, feel free to phone or pop in to talk to our solicitors.