Failure to Fulfil the Duties of Directors and the Criminal Law Consequences
Director Jailed for Sale of Illegal Chemicals
Directors inevitably think about the civil law penalties they could face if and when things start to go wrong for them and their companies. Director disqualification is typically, for example, a civil law penalty, used at insolvency to penalise directors for not carrying their duties out correctly. However, there are also criminal law consequences for all company Directors who do not carry out the duties of directors, with sanctions ranging from being fined to receiving a prison sentence, or both.
In this article we look at a case where the director was jailed for 10 months, following a Health and Safety Executive investigation, for the sale of illegal chemicals which are known to have caused fatalities. This case is a timely reminder of how easily – and severely – things can go wrong for the Director who does not fulfil his/her duties as a director.
Background to This Case
Mr Nicholas Corbett (‘Mr Corbett’), Director of Abel (UK) Ltd (‘the Company’), was recently sentenced to 10 months in prison for the online sale of products containing prohibited substances.
The Court heard how Mr Corbett was selling a plant protection product containing Sodium Chlorate, a prohibited substance, as well as a paint stripper containing dichloromethane (DCM), which is restricted under Registration, Evaluation, Authorisation and restriction of Chemicals (REACH).
The Company also failed to check at the point of sale whether the paint stripper containing DCM was either being sold for use in industrial installations or, after October 2016, to appropriately certificated professionals, which is a condition of sale.
The Consequences of the Director’s and the Company’s Actions
Mr Corbett of Weddington Road, Nuneaton pleaded guilty to breaching Regulations 9 and 18 of The Plant Protection Products Regulations 2011 and Regulation 11(2) of The REACH Enforcement Regulations 2008 and was given a 10-month custodial sentence.
Speaking after the hearing, HSE inspector Sarah Dutton said:
“Chemicals are carefully regulated to protect human health and the environment. Sodium Chlorate is not approved for use in weed killers, as a safe level of use was not established for operators. Dichloromethane (DCM) has been restricted in paint strippers due to concerns for human health during its use – it has caused fatalities when not used properly.
Companies should be aware that HSE will take robust action against those who unnecessarily put the lives of workers and the public at risk, and against those who endanger the environment, through the inappropriate supply and use of chemicals , and will not hesitate to take action against those that fall below the required standards.”
Our Solicitors Comment
Had Mr Corbett taken the time to consider the safety of his customers, and the implications of the products he was selling, he could have been avoided the prison sentence imposed on him as a result of the HSE’s investigation.
The case is a reminder that compliance with Health and Safety Legislation is a statutory requirement for Directors and that a failure to observe such duties can result in a prison sentence for a defaulting Director.
It is also a salutary reminder of the criminal law enforcement action the HSE can and will take against Directors if there is a failure to comply and that Company Directors will be pursued personally in respect of Health and Safety breaches.
As Solicitors specialising in the area of regulatory compliance, we are well used to dealing with the tactics and strategy of defending such cases, to the best advantage of the Company and its Directors. We are also experienced in working with the insurers for the Director and/or the Company in such cases.
Contact us for Help and Advice Regarding the Duties of Directors
If you have any questions regarding the duties of directors under Health and Safety legislation or more generally, 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.