Since the Corporate Manslaughter and Homicide Act 2007 came into force in 2008, there have been twelve prosecutions under the Act which have reached trial although further cases are pending. Of these, six have been guilty pleas, a further four have resulted in acquittal, one was undefended and in two there have been convictions following the trial.
In all cases, the defendants have been small to medium sized companies and fines have been based on a range of factors, including their financial status. There is therefore no clear discernible trend except that fines and costs orders are substantial. Time to pay is given in appropriate cases.
What is clear however is that the court is prepared to ignore the extent to which a fine is actually recoverable when fixing a penalty.
In the first prosecution under the Act, R v Cotswold Geotechnical Holdings Ltd, the court recognised that even allowing for time to pay, the fine levied would force the defendant company into liquidation, but felt it right to impose it anyway, in order to emphasise the seriousness with which the court viewed offences under the Act. This approach was endorsed by the Court of Appeal (see R v Cotswold Geotechnical Holdings 2012).
This issue was raised again when in November 2014, Sheffield Crown Court heard the case of R v Sterecycle (Rotherham) Limited and Others, which was a prosecution under section 1 of the Corporate Manslaughter and Corporate Homicide Act 2007 against the company, with additional charges against three managers (notably not directors) each charged under section 7 of the 1974 Act.
Sterecycle, a waste disposal business, was developing a prototype system for dealing with general household waste involving a large autoclave which could deal with 24 tonnes of rubbish at a time. The seal on a door failed, leading to an explosion of steam in which one employee was killed and another seriously injured.
Examination of the debris revealed that the door locking mechanism had been damaged prior to the explosion. There was evidence that maintenance was inadequate, and that dangerous operating practices had been allowed to develop under commercial pressure to keep the plant in constant operation: the classic ingredients of a major industrial accident.
By the time the case came to court, however, the company had gone into liquidation and was neither present nor represented. It was nonetheless convicted and fined £500,000. The cases against the individuals collapsed.
In the previous case, the court had concluded that prosecution and conviction in circumstances where there had been a preventable death was justifiable.
However, the conviction in Sterecycle has little more than symbolic value. The fine will not be paid and it is by no means certain that there will be any direct consequences, such as disqualification for the directors.
Nonetheless the message is clear and consistent with the principles laid down in other cases: that the court will impose substantial penalties where safety considerations have been subjected to the profit motive. Association with the case may affect the reputations of the directors indirectly, even though they were not individually prosecuted.