LONDON - British contractors BAE Systems and QinetiQ could face a corporate manslaughter charge following the publication of a report on the crash of a Nimrod MR2 aircraft that claimed the lives of 14 military personnel.
Lawyers representing the families of those killed in the 2006 crash in Afghanistan said they were considering pursuing civil or criminal corporate manslaughter charges against the companies after a Ministry of Defence-commissioned report condemned their performance in conducting safety checks on the Royal Air Force surveillance plane.
The Nimrod crashed after a catastrophic midair fire on board the aging four-engine jet aircraft. The fire apparently started when an overflow of fuel ignited following an air-to-air refueling.
The MoD has admitted liability for the crash and is negotiating with the families over compensation.
The report by Charles Haddon-Cave, a lawyer, blasted the performance of the MoD, BAE and QinetiQ in reviewing the Nimrod fleet's safety in the period of 2001-05.
In an unusual move, it named the executives and military personnel it deemed largely responsible for the mistakes.
The report also questioned the extent to which Britain uses contractors for aircraft support, and pointed the finger at procurement and budget shortcomings as being indirectly responsible for some of the problems.
Haddon-Cave's review into the circumstances leading up to the crash was the latest in a spate of stories questioning MoD competence. Earlier last month, the MoD released a review conducted by businessman Bernard Gray that slammed the ministry's ability to manage its procurement and support process. And last week, the MoD was censured in a coroner's report on a 2007 crash of a Puma helicopter that killed three people.
The reports come at a time when the armed services and others are positioning themselves ahead of the completion of the 2010 planning round, followed by a Strategic Defence Review. Cuts to military capability and equipment programs due to budget difficulties are expected.
The unprecedented legal action being considered would add further problems to what is already looking to be a painful year ahead for the military and industry.
As far as is known, no British defense company has been charged under the corporate manslaughter act. The act, revised in 2007, allows companies rather than individual executives to be taken to court for acts of negligence leading to death.
"As a matter of law, we don't know whether it will stand up yet ... but we are pressing the Crown Prosecution Service and the Director of Public Prosecutions to look at this," said John Cooper, the barrister representing the families.
Cooper said that if the Crown Prosecution Service didn't act, a civil prosecution would be considered.
To make the case stick, he said, they would have to establish gross negligence linked to death and prove it was part of a long-term pattern of behavior. The fines, if the companies were found guilty, could run into millions of pounds.
BAE and QinetiQ declined to comment on the possible corporate manslaughter charges. Both said they had learned from the mistakes of the safety reviews and were making improvements based on the 2007 crash inquiry.
Industry analysts here, though, said that injury to reputation, not possible fines, will be the most damaging. The size of the BAE and QinetiQ balance sheets makes the sums of money likely to be involved largely irrelevant.
"With the Serious Fraud Office and the U.S. Justice Department investigations into [alleged] corruption by BAE ongoing, this could just compound the company's problems," one analyst said.
But the analyst cautioned that a prosecution in the British courts could open a Pandora's box of problems related to exactly who is responsible for the safety of defense equipment.
"You could, for example, see a situation where the contractor is being urged to do something by the customer [that] he is not particularly happy at in order to field equipment to meet operational requirements. He may then end up getting sued when it goes wrong," the analyst said.
"Maybe what we will see if it becomes a real issue is an independent government agency dictating exactly the military safety standards required for equipment. That would make it more difficult to blame corporate failure."
Haddon-Cave recommended something similar, saying the MoD needs to build a new military airworthiness regime under the control of an independent authority.
"In a small way, we are already seeing a move in that direction, with increasing numbers of military transport aircraft being qualified to civil aviation standards," the analyst said.
The MoD said in a statement it has appointed Air Marshal Kevin Lesson to the new post of Defence Chief Airworthiness Engineer.
In the wake of the Nimrod crash, it established a safety improvement working group to improve policy, guidance and practices across all three armed services.
"The group produced an improvement plan comprising 22 actions. All will be completed by the end of 2009," the MoD said.
A legal executive at one British defense firm said the impact on industry of a corporate manslaughter charge would be moot, as the corporate manslaughter act is already factored into how companies word their contracts.
"What it will mean, though, is you will see increased levels of management focus on this aspect of performance with reviews of policy, greater quality assurance and other improvements," he said.
Haddon-Cave was scathing about the performance of the MoD's Nimrod project team, BAE and QinetiQ.
Like the Gray report, the independent review swept aside the usual weasel wording associated with internally produced MoD documents, and pulled no punches in outlining the fault lines in the process.
"The Nimrod Safety case was a lamentable job from start to finish. It was riddled with errors. It missed key dangers. Its production is a story of incompetence, complacency and cynicism. The best opportunity to prevent the accident to [aircraft] XV230 was tragically lost," said the report.
The harshest criticism was reserved for BAE and the MoD project team.
"BAE Systems bears substantial responsibility for the failure of the Nimrod safety case. Phases 1 and 2 were poorly planned, poorly managed and poorly executed, work was rushed and corners cut. The end product was seriously defective. … Its conduct when handing over the Nimrod Safety Case can fairly be described as cynical," said the report.
Regarding the MoD's Nimrod project team, the report said it "failed at any stage to act as an intelligent customer. It outsourced its thinking. It was at material times unquestioning, weak and sloppy."
QinetiQ, which was contracted to be an independent adviser, was variously described in the report as supine, lax, compliant and "prepared to take the line of least resistance."
The report went on to criticize the breadth and scale of Britain's policy of outsourcing, maintenance and support. The armed services were losing the ability to think and act for themselves, there was an inexorable drain of skilled manpower from the military to industry, and much of the work could be done more effectively and economically in-house, it said.
BAE and helicopter maker AgustaWestland between them have long-term partnering arrangements with the MoD that include billions of pounds worth of contracts to support machines like the Tornado, Typhoon, Harrier, Nimrod, Sea King and Merlin.
Other airframes, like the Chinook, Hercules, VC-10 and Tristar also have maintenance and support carried out by industry.
The safety review says Britain needs to rebuild MoD skills to enable it to become an "intelligent customer," have arms-length contractual clarity with industry and be more discriminating about what is outsourced.
The safety review's publication comes at a time of rising speculation here about where the MoD will cut military capabilities and equipment programs.
Several newspapers last week reported that one option being looked at is changing the role of one of the Royal Navy's two future 65,000-ton aircraft carriers to a helicopter carrier, or even a UAV platform.
The reports said Britain could create massive savings by more than halving the planned F-35 order to just 50 aircraft.
MoD and industry sources said the future of the 4.6 billion pound ($7.6 billion) carrier program would be considered, along with everything else, by a Strategic Defence Review following the 2010 general election.
Despite that, ministry sources said the financial situation is so bad that some cuts could be expected to emerge from the 2010 planning round.
Work to allocate spending for the financial year starting next April is expected to be complete around the turn of the year.
Laying up warships and cutting strike aircraft numbers are said to be among the options. A decision to change the role of one of the carriers, or delay the introduction of the second of the warships, is unlikely at this stage. ■
E-mail: achuter@defensenews.com.
The Army's Future Combat Systems (FCS) program is ready to test a few components that soldiers may have in their hands by 2010.
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