Rise in Corporate Manslaughter Investigations

There has been a steep rise in the number of corporate manslaughter cases investigated by the Crown Prosecution over the last couple of years. We explain the impact of these cases on small businesses and how they can protect themselves against legal action.

In 2012, the Crown Prosecution Service began investigating 63 corporate manslaughter cases. That’s an increase from 45 in 2011 and follows an upward trend as of 2009. Here are three examples of how corporate manslaughter cases have been brought against companies.

Cotswold Geotechnical Holdings

On the 15th February 2011, Cotswold Geotechnical Holdings became the first company to be convicted of the new offence of corporate manslaughter. Cotswold Geotechnical Holdings was fined £385,000. Prosecution followed the death of employee Alex Wright who was investigating soil conditions in a deep trench when it collapsed and killed him.

JMW Farms Ltd

On the 8th May 2012, JMW Farms Ltd was fined £187,500 plus £13,000 in costs following the death of employee, Robert Wilson who was fatally injured after being struck by a metal bin which fell off a forklift truck.

J Murray and sons

On the 15th October 2013, J Murray and Sons, an animal feed mixing company in Northern Ireland were found guilty of corporate manslaughter following the death of an employee, Norman Porter, on the 28th February 2012. They were fined £100,000 plus £10,450 costs.

How does a company guard against the risk of a corporate manslaughter prosecution?

Key to this is introducing a top-down management culture that places safety at the heart of the business. At the same time, companies must embrace the often-neglected need for drivers to receive appropriate recognition and reward in return for adopting safety conscious behaviours. This should underpin a culture that places road safety firmly at the heart of their operation.

As well as having the right culture, a clearly defined policy for the management of work-related road safety needs to be communicated to and understood by all staff. That policy should include matters such as:

  • Vehicle maintenance.

  • The implementation of daily vehicle checks.

  • Regular driver education on driving safety.

  • Monitoring driving style and behaviour.

  • Journey planning and contingency planning to cope with adverse weather conditions.

Companies should also take a firm stance on behaviours that can distract a driver such as eating whilst driving and using hand-held mobile phones.

The need to carry out a comprehensive risk assessment is crucial. You should carefully consider every aspect of risk affecting your drivers and other staff. That risk assessment process begins at the depot and continues on the road and at the delivery sites to which your drivers travel. The risks posed by the headline grabbing issue of driver fatigue should be central to your on-the-road risk assessment. Once the risk assessment has been completed, an action plan that prioritises and addresses the issues identified needs to be drawn up and implemented.

Continuous monitoring of driving style and behaviour is vital. Desirable goals such as achieving a period of crash-free driving or achieving average monthly fuel economy targets must be clearly defined and driving behaviour should be monitored against those goals. Monitoring should include positive reinforcement of behaviours such as safe and fuel efficient driving. ‘Telematics’ solutions designed specifically to monitor driving style and behaviour can provide excellent insight and enable a fair rewards structure.

If, despite taking these precautions, a firm were to face prosecution for corporate manslaughter, it’s important that a firm has in place appropriate cover against potentially crippling legal defence costs. This type of cover can help in the case of a third-party motor, employers’ liability, public liability or a products liability claim (subject to circumstances – ask your Towergate advisor for more details)

It’s worth noting that many (but not all) motor policies provide cover under the third-party section against the cost of a corporate manslaughter prosecution, though sometimes with a reduced limit.

Again, many employers’ and public liability policies provide cover against the cost of defending a corporate manslaughter prosecution but as with motor policies, an inner limit may apply. Cover under all these sections is subject to insurer giving their written consent.

Some legal expenses policies may also provide appropriate cover though perhaps with an indemnity limit of only £100,000 or with the exclusion of cover in circumstances where the Road Traffic Act applies. Aware of these limitations, Towergate has developed their own commercial legal expenses policy for those in the road transport industry known as Towergate Legal + with an indemnity limit of up to £250,000.

Should legal defence costs following a corporate manslaughter prosecution might exceed £250,000 or an insurer refuse written consent for cover under the third party part of a policy, Towergate encourages clients to consider adding a corporate liability extension to their Directors’ and Officers’ Liability cover that specifically includes cover against the costs of the company itself having to pay to defend a corporate manslaughter prosecution.

To find out more about guarding your business against the cost of a corporate manslaughter investigation or prosecution, call us and ask to speak to your usual Towergate adviser.

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