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Company fined £550,000 in first corporate manslaughter sentencing under new guideline

A construction firm based in north London has been fined £550,000 for corporate manslaughter offences, in the first sentencing since new guidelines were introduced in February.20 Jul 2016

Monavon Construction Ltd pleaded guilty to two counts of corporate manslaughter and a breach of the duty to non-employees under section 3(1) of the Health and Safety at Work Act. The company was prosecuted after two men fell into a 3.7 metre light well that only had perimeter edge protection, rather than metal railings, fixed around it in October 2013. Both men died at the scene.

A new sentencing guideline for use by the courts in England and Wales in health and safety, corporate manslaughter and food safety and food hygiene cases came into force on 1 February 2016. The guideline is expected to ultimately lead to much higher fines for the largest companies convicted of the most serious regulatory breaches.

"In that context, a fine of this size in a case involving the death of two members of the public may seem quite modest, but what it really shows is the significance of a company's turnover when courts apply the guidelines," said health and safety expert Sean Elson of Pinsent Masons, the law firm behind Out-Law.com.

"For a much larger company with a turnover exceeding £50 million, the guidelines would likely have resulted in multi-million pound fines - possibly 10 times higher than the fine imposed in this case," he said.

The new guideline was designed to ensure a more consistent approach to the sentencing of individuals and organisations convicted of relevant offences by courts in England and Wales. It requires courts to first assess the seriousness of the offence based on the offender's culpability and the risk of serious harm, regardless of whether any harm was in fact caused. The guideline then sets a starting point and a range of possible fines based on the seriousness of the offence, which vary depending on the size of the organisation based on turnover or the equivalent.

The guideline also includes a non-exhaustive list of mitigating and aggravating factors that the courts can take into account when setting the level of the fine. Mitigating factors may include where a business has no previous convictions, has taken steps to remedy the wrong and has demonstrated a particularly high level of co-operation with the investigation; while aggravating factors may include a history of relevant offences or where the offence was committed for financial gain.

The judge in the Monavon case fined the company £250,000 for each of the corporate manslaughter offences, plus an additional £50,000 for the Health and Safety at Work Act breach, according to a summary published by the company's lawyers. The judge also imposed a publicity order on the company, and awarded costs of around £23,000 against it.

The level of the fine was based on the fact that Monavon was a "micro organisation" with a turnover of much less than £2 million, according to the summary. Mitigating factors taken into account by the judge included the company's good safety record and lack of previous prosecutions against it, as well as the "remedial steps" taken after the accident.

The judge also reduced each of the corporate manslaughter fines by £50,000 in recognition of the company's guilty pleas, but "gave no explanation as to how he approached" that figure, according to the summary.