Posted on 24th June 2010

Director's Responsibilities if Disaster Strikes

Nick Poole, Latimer Hinks
Latimer Hinks Solicitors is sending out a timely warning about the legal responsibilities of company directors in the wake of the catastrophic explosion at an offshore drilling rig in the Gulf of Mexico.

Nick Poole, a Partner at Latimer Hinks, said: "The extensive media coverage of the situation in the Gulf of Mexico is likely to have started companies and their directors thinking about what their legal liabilities could be if a disaster, albeit probably on a smaller scale, happened at one of their company operations.

Oil has been spewing into the Gulf of Mexico since a drilling rig owned by Transocean and leased by BP exploded with the loss of 11 lives.

According to Nick Poole, the two most common offences for which companies can be liable are health and safety and environmental-related offences.

He said: "Under the law, companies have a duty to safeguard the health and safety of their employees and also that of the public.

"Penalties for breach of health and safety laws can be heavy. Some of the highest fines imposed in the UK have been for the 2002 Hatfield rail crash with Network Rail being fined £3.5m and engineering group Balfour Beatty £7.5m.

Nick Poole added: "If a company is convicted of a health and safety offence, this opens the door to the prosecution of a director who agreed to or sanctioned the offending conduct or where the conduct could be attributable to neglect on the part of the director. The penalty for these offences is an unlimited fine or imprisonment.

The main areas covered by environmental legislation are air pollution, pollution at sea, oil pollution from ships and waste on land.

Nick Poole said: "The legal system treats infringements of environmental laws in a similar way to contraventions of health and safety statutes with both the company and its directors being potentially legally responsible.

He added: "This oil rig disaster has thrown health and safety and environmental issues into the spotlight. I would advise company bosses to make sure they are up to date with current legislation and that they make themselves aware of their responsibilities and what systems and procedures they should have in place to prevent accidents or incidents happening.