Directors Duties, Regulatory Problems and Compliance Failure

Companies and Director Fined Following Crush at Excavation Site.

Company Directors are often not fully aware of all of the directors duties that they have to the company, their employees and the general public.They are also not always aware of the personal liability they carry along with possible criminal sanctions when they do not carry out their directors duties correctly. This article looks at a tragic case where several workers died at an excavation site. The companies involved were fined £700,000 for serious compliance failure, whilst the director received a suspended prison sentence.

Background to This Failure of Carrying Out Directors Duties

The Health and Safety Executive (“HSE”) issued a press release regarding its investigation into the conduct of Claxton Engineering Services Ltd and Encompass Project Management Ltd (“the Companies”) and Mr David Groucott of Diss, Norfolk (“the Director”) of Encompass Project Management Ltd.

Their investigation centred around four workers at an excavation site in Norfolk, who were constructing a large steel structure as part of the foundation for a Pressure Test Facility (PTF) at Claxton Engineering Services in Great Yarmouth. Tragically, the structure, weighing around 32 tonnes, collapsed on the group of workers who were all pronounced dead at the scene.

The group were working for Hazegood Construction Limited, as contractor and for Encompass Project Management Ltd who was the principal contractor for the services.

The Health and Safety Executive’s Investigation Revealed Serious Failures in the Carrying out of Directors’ Duties

The investigation conducted by the HSE found serious flaws in the planning, management and monitoring of the project on the part of the Companies and the Director.

In total the Companies were fined £700,000 and ordered to pay costs of £150,000 as a result of breaches of Regulation 9(1)(a) of the Construction (Design and Management) Regulations 2007 and Section 3(1) of the Health and Safety Act 1974, respectively.

Further to this, the Director pleaded guilty to breaching section 37(1) of the Health and Safety at Work Act 1974. He was sentenced to a seven and half month custodial sentence, suspended for two years. The Director was also ordered to pay costs of £7,500 and complete 200 hours of unpaid community work within 12 months.

What the Health and Safety Executive Said

HSE Construction Division Head of Operations Annette Hall said:

“Those sentenced today failed the four workers who died. They didn’t carry out their legal duties, leading to the events which caused their deaths.”

“This was a long term, large scale and complex civil engineering project which needed to be planned, designed, managed and monitored effectively. The tragedy here is that, in the months leading up to the accident, any one of these parties could and should have asked basic questions about building the structure safely. Such an intervention could have avoided the tragic outcome of this entirely preventable accident.

Comment on this case: Directors Duties, Regulatory Disputes and Compliance Failure

 Had both Companies and the Director complied with their duties they would have avoided the loss of reputational and financial damage caused by this tragic compliance failure. The case is a reminder that compliance with Health and Safety legislation is a necessity for directors. It is also a salutary reminder of the criminal enforcement action the HSE will take if there is a failure to comply and that company directors will be pursued personally.

Our Regulatory Compliance Solicitors are well used to dealing with the tactics and strategy of defending such cases of compliance failure and also regulatory disputes, to the best advantage of the company and its directors. We also advise and represent individual directors facing disqualification proceedings or regulatory disputes for the improper conduct of their company’s affairs.

If you have any questions regarding your duties as a company director under Health and Safety legislation, and the effect of non-compliance in any case, please contact us or call us today on 0121 200 7040 for a FREE, no obligation initial chat.



Submit a Comment

Your email address will not be published. Required fields are marked *