Lionsteel fined £480,000 after admitting corporate manslaughter

Lionsteel fined £480,000 after admitting corporate manslaughter

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Author: Ron Reid

Lionsteel Limited has been fined £480,000 and ordered to pay £84,000 costs by HHJ Gilbart at Manchester Crown Court after pleading guilty to a single charge of corporate manslaughter during trial.

The case relates to the death of employee Stephen Berry, who died from injuries sustained following a fall from height at Lionsteel's premises in Hyde, in 2008.

The guilty plea was agreed by all parties at trial in June 2012, following the conclusion of the prosecution case. This resulted in personal charges against three company directors and Health & Safety at Work Act charges against the company effectively being dropped.

 

This latest corporate manslaughter fine is the first against a corporate entity of any significant means, although Lionsteel is not a large private or publicly listed company.

The first case involved a single director and shareholder, when Cotswold Geotechnical Holdings Limited was fined nearly £400,000; while the second concerned Northern Ireland pig farming company JMW Farms, which was fined nearly £200,000.

Prior to sentencing, Lionsteel handed in three years' of accounts, indicating average turnover of £10m, with profit of between £180,000 and £370,000 per annum. The judge acknowledged that the company relies on loans to exist and had 'not engaged in extravagance'.

 

The Sentencing Guidelines Council's published guidance suggests that fines for corporate manslaughter should seldom be less than £500,000 and may be measured in millions.

In this case, the judge recognised that any sentence must balance the need to punish Lionsteel, while not imperilling the 142 employees who continue to work there.

 

As the fine in this case relates to a negotiated guilty plea - agreed early in the trial in association with the prosecution and agreed by the court, rather than resulting from a conviction following trial - commentators still await a court ruling on many of the anticipated legal points, especially after the corporate manslaughter charge was severed from the Health and Safety at Work Act offences at a pre-trial hearing.

There will not even be a Publicity Order, as the case pre-dates this specific part of the corporate manslaughter legislation coming into force.

 

While this makes legal commentary difficult, it is worth noting that the negotiated plea does throw up one moral issue: that the decision not to proceed against any of the directors leaves Lionsteel still being run by the very managers who oversaw the 'serious management failure' required by the Act, and which ultimately led to the death of an employee.

CPS confirms no manslaughter charges against G4S and employees

In contrast, G4S Care, its fellow subsidiary Justice Services UK Limited, and three employees, have been told they will not be prosecuted for corporate manslaughter or (for the individuals) gross negligence manslaughter.

This follows the death of Angolan national Jimmy Mubenga as he was being deported from the UK on a flight from Heathrow, in 2010.

Although the two cases and the companies involved are very different, it is worth analysing some of the comments made by the Crown Prosecution Services (CPS) when it announced its decision not to prosecute G4S.

The CPS said the following factors determined its decision:

For prosecution

  • the shortcomings identified in the training of its staff by G4S
  • the warnings from whistle blower staff that potentially lethal force was being used by colleagues well before the death
  • the cries for help from the victim whilst being forcibly restrained
  • the fact that a duty was clearly owed to the victim by all parties investigated
  • the CPS believe that there was evidence of a breach of this duty

Against prosecution

  • the evidence was inconclusive about whether Mr Mubenga was restrained in a 'severely' splinted position, which would have been unreasonable
  • there were a variety of other medical factors that could have caused his death, making it almost impossible to prove to a criminal standard that any breach by the relevant duty holders caused his death; so the CPS concluded that a case could not be put to a jury with any prospect of success

It is worth noting that the CPS indicated it could not secure a conviction on these charges, rather than the fact that there was no wrongdoing on the part of the duty holders.

Failure to prove that the breaches were causative of the death in the G4S case meant that the individuals and companies could not be prosecuted for corporate or personal manslaughter offences.

However, with the breaches that have been identified, it may still be possible for the Health and Safety Executive to prosecute one or more duty holder under the Health & Safety at Work, etc. Act 1974. We understand that decision remains pending.

The Sentencing Guidelines Council indicated in its guidelines on sentencing duty holders who have breached safety legislation leading to serious injuries or fatal outcomes, that companies convicted would rarely escape with fines under £100,000, and that these could be much higher.

The message to corporate and personal duty holders

Both cases reinforce the importance of having robust safety procedures in place, and that it is crucial for health and safety duty holders - including auditors, insurers and all others with safety responsibilities - to take the following steps:

  • staff are properly trained, especially where the safety of others is concerned in difficult or high risk situations
  • training is kept up to date and relevant to the risks realistically posed by the activities of a business
  • management drive a culture of compliance from the top of every organisation down to the bottom
  • what happens on the ground accurately reflects what a business says about its safety policies and systems
  • working practices are supervised, monitored and regularly reviewed
  • employees and management do not just accept the status quo but make a concerted effort to speak out against any perceived breaches of safety
  • the genuine concerns of staff are fully investigated in relation to alleged wrongdoing/failure to follow procedures

They also demonstrate the time it takes to investigate, to make decisions, and to prosecute following fatal accidents; as well as demonstrating the difficulties faced by the police when dealing with fatal accidents and suspected breaches of the Corporate Manslaughter and Corporate Homicide Act 2007, and prosecuting gross negligence manslaughter offences against individuals where the prosecution must prove that:

  • a duty of care existed between the individual and deceased
  • the duty was breached
  • the individual's conduct was so bad that it amounted to a criminal act or omission

These cases demonstrate the importance of obtaining independent legal advice for each individual duty holder at an early stage following a serious or fatal accident where multiple charges may arise, because the police and HSE are increasingly throwing the suspect 'net' very wide in the aftermath of fatal incidents.