Care Homes in the Dock

In February, Sherwood Rise Limited became the first care home provider to be convicted and sentenced for corporate manslaughter, following the death of Ivy Atkins at Autumn Grange Care Home, Nottingham, in 2012.

The company was fined £300,000, and was also ordered to pay costs of over £41,000. In addition to the prosecution of the company, a director, Yousaf Khan pleaded guilty to individual gross negligence manslaughter and received a custodial sentence of three years and two months.

Autumn Grange’s Manager, Mohammed Khan, received a one year custodial sentence, suspended for two years. Both were also disqualified from being appointed as directors for five years.

This case was one of the first to be decided under the new Sentencing Guidelines for Corporate Manslaughter and Health and Safety Offences, which came into effect on 1 February 2016 and which apply to all such cases sentenced on or after this date.

These Guidelines are far more prescriptive than those issued in 2010. They require a court to take into account not only a defendant’s level of culpability, but also its turnover (not profit) as well as the likelihood that harm would occur.

The net effect of the new Guidelines is to significantly increase the sentences handed down for health and safety offences.

For example, under the 2010 Guidelines the recommended starting fine for corporate manslaughter was anticipated to be, “seldom less than £500,000.

This figure applied regardless of the size of the defendant organisation. In reality the average fine handed down for corporate manslaughter prior to the new Guidelines was around £280,000, and has been as low as £8,000.

By contrast, the new Guidelines suggest starting fines based on a defendant’s turnover. If an organisation has turnover of up to £10 million, the suggested starting fine for corporate manslaughter is £800,000, but courts are entitled to impose a fine of up to £2.8 million. For larger organisations the fines for corporate manslaughter may even be in excess of £20 million.

It may be the result that the fines imposed as a result of the new Guidelines act to force defendant companies into liquidation. That may not make a difference.

In the words of Lord Chief Justice, Lord Judge during the appeal by Cotswold Geotechnical Holdings Limited (the first corporate manslaughter conviction), “the fact that the company would be put into liquidation [by the fine] would be unfortunate, but…this was unavoidable and inevitable.”

Although the conviction and sentence of Sherwood Rise Limited now brings the total number of convictions for corporate manslaughter to 13, this case is significant as it represents the first sentencing of a care home for the offence.

To date, the majority of organisations convicted of corporate manslaughter have been involved in either the construction or manufacturing industries. The prosecution of Sherwood Rise Limited is perhaps indicative that as the Crown Prosecution Service and police become more familiar with the component parts of the offence, they are more willing to investigate potential gross breaches occurring in other sectors.

The conviction of Sherwood Rise is a timely reminder that all organisations owe responsibilities under health and safety legislation to individuals who may be affected by their activities.