Following the new sentencing guidelines for corporate manslaughter, a recent case has provided helpful guidance for Companies facing health and safety regulation. The case involved a construction firm called Monavon Construction Ltd. The company pleaded guilty, and received a total fine of £550,000 plus costs as a result of the tragic event. What lessons can companies learn from this case?
Facts and failings
In summary, two members of the public fell to their death because of a poorly maintained building site perimeter. The two individuals had an argument and were pushed up against the site hoarding; the edge protection gave way, and both fell around 4 metres. Both men suffered head and neck injuries and died at the scene.
The Company was criticised for a number of failings across the site. Some were situational; the site hoardings were fragile, and gave way under minimal force. The site was also nearby to the public road, and therefore exposed a large number of people to danger. Systemic failures were also identified - a lacking approach to health and safety was clear from pre-work planning and training available to employees.
How do the new sentencing guidelines affect the outcome?
There are a number of points to note about the Court's new approach. These are discussed in the same order as they would arise in the new guidelines:
- Monavon Construction was not a large company. Public records show a turnover of less than £2 million around the incident and shortly afterwards. This would firmly place the company in the "micro" turnover bracket, which provides for the lowest sentencing ranges and starting points. A larger company would have faced a much larger fine;
- The incident was assessed as category A in terms of harm and culpability (i.e. the more serious option, compared to the lesser category B). This exposed the company to a much larger fine;
- A relatively early guilty plea was made, which would have allowed the company to request up to a 33% reduction of any fine; and
- A publicity order was made in addition to the fine. Monavon Construction Ltd was required to publish their conviction in a form provided by the Court.
What can companies learn from these points
When dealing with an incident, the four points set out above will be a key influence on how companies respond to prosecution:
- All companies must realise that the larger they are, the bigger fines they face. A large organisation (with a turnover in excess of £50 million) would have faced a starting point of £7,500,000. Sentencing based on turnover (as in other health and safety offences, food safety offences, and environmental offences) is here to stay, and will increase fines across the board. Higher fines may result in more companies choosing to defend cases fully, rather than accept a commercially minded "quick settlement".
- Culpability and harm will remain the critical battleground in any investigation as the "categorisation" of the offence is the second key step in reaching a fine.
- Entering an appropriate plea is now more important than ever. With larger fines on the table, an early guilty plea discount of up to 33% can represent a considerable saving if a "not-guilty" is unlikely to succeed in full. This is not to suggest that cases should not be contested where prospects are good, just that early case analysis and investigation is critical; and
- The biggest cost to an organisation is not necessarily the fine - a publicity order (and the resultant reputational damage) can have a long lasting effect.