Getting ready for Corporate Manslaughter

More than half of the UK’s employers are not prepared for the impending Corporate Manslaughter and Corporate Homicide Act, which is expected to come into force later this year.

A recent survey conducted by business information provider Croner found that 51% of employers were not prepared for the Act, while 48% believed it would not affect them

After slow progression through Parliament and lengthy debate, the Corporate Manslaughter and Corporate Homicide Bill received royal assent on the 26 July 2007 and will become operational from 6 April 2008, although the extension of the offence to deaths in custody will not come into effect until a later date.

Croner is advising businesses to take steps now to review and implement progressive health and safety policies with the expected introduction date just a few months away.

Paul Simpson, Managing Director of Safety Nett (UK) Limited reviews the key benefits of the new Act and unravels the complexities of the new corporate manslaughter charge.

What offence is created by the new Corporate Manslaughter and Corporate Homicide Act 2007?

The Act creates the new statutory offence in England, Wales and Northern Ireland of “corporate manslaughter” and in Scotland of “corporate homicide”.

A company will be guilty of the new offence if the way in which its activities are managed or organised, by its senior management, amount to a gross breach of the duty of care it owes to its employees, the public or other individuals and those failings caused the persons death.

Who will the new law apply to?

The new law will apply not just to the UK’s 2.3 million companies but to partnerships, other employers like trade unions, and to some non commercial organisations. After much debate in Parliament, the new law will also be applicable if the death of someone in custody resulted from gross negligence in the prison service or from those controlling police cells.

How does the Act differ from the current law?

The current law links a Company’s guilt to the gross negligence of an individual who is said to be the embodiment of the company. It has proved very difficult to prosecute large organisations, and the only successful prosecutions have been against small companies where the director and company are essentially one and the same.

The new Act seeks to address this difficulty by focusing on the way in which a company’s activities are managed and organised, and it is not reliant on one individual being found guilty of gross negligence manslaughter. The courts will now be able to consider the wider corporate picture, looking collectively at the actions, or more appropriately the failings, of the company’s senior management.

Who will be considered to be “senior management”?

A company will be guilty of the new offence if someone has been killed as a result of the gross failure of a company’s senior managers – for example, where they fail to ensure safe working practices. Senior management is defined in the Act as those persons who play a significant role in the decision-making process about how the company’s activities are managed and organised or the actual managing or organising of the whole or a substantial part of those activities. But there has been lots of debate about what constitutes “senior management”. The answer will be different in each case, depending on the size and structure of the business involved. The courts are likely to refer to the Company’s own health and safety policy for direction in each case.

What will amount to a gross management failure?

To secure a conviction, the prosecution must prove that the management failure amounted to a “gross breach” of the duty of care owed to the deceased. When determining this, the jury should consider whether the evidence shows that the company’s conduct fell far below that which could reasonably have been expected of it. Factors that will be taken into account include whether the organisation failed to comply with any relevant health and safety legislation, and if it did, how serious that failure was, and how much of a risk of death it posed. The jury may also consider the extent to which the evidence shows there were attitudes, policies, systems or accepted practices within the organisation that were likely to have encouraged or tolerated such failings and have regard to any health and safety guidance that relates to the alleged breach.

What is a “relevant duty of care”?

In relation to an organisation a “relevant duty of care”, includes a duty owed to its employees or to other persons working for the organisation or performing services for it.

The meaning of “relevant duty of care is defined more clearly in the Act but whether an organisation owes a duty of care to a particular individual is a question of law to be determined separately in each case.

Will the new Act affect individuals?

The new Act is about corporate responsibility and liability, and is not concerned with increasing the liability of individuals, who can already be held to account through existing health and safety legislation and the common law offence of gross negligence manslaughter.

The Act attempts to create a more effective and easier method for prosecuting companies, with the focus being the worst cases of management failure that have resulted in death. It is hoped that the effects of a possible conviction, and the resulting penalties, will be a sufficient incentive for companies that consistently fail to meet proper standards to improve and provide their employees with safer working environments.

What penalties will a company face?

Penalties include an unlimited fine, remedial orders and publicity orders. A remedial order will require an organisation to take steps to remedy any management failure that led to death. The court can impose an order publicising the fact the company has been convicted of the offence, providing details, the amount of any fine imposed and the terms of any remedial order made.

What is “gross negligence manslaughter”?

A company acts through the human agency of its directors, managers and staff. Currently in order to convict a company of manslaughter it must be shown that a causal link existed between a grossly negligent act or omission by a person who is the “controlling mind” of the company and the immediate cause of death.

The principle assumes that there are certain directors or senior managers of the company whose acts and states of mind can properly be regarded as those of the company. Those persons are to be identified as those who are entrusted with the powers of the company. Accordingly the conviction of a company for manslaughter in the absence of evidence establishing the guilt of an individual for the same crime is not possible.

Usually a person can only be a controlling mind if they are a director or higher, carrying out the functions of management, with full discretion to act independently.

It will be necessary to determine whether an individual is a controlling person and to establish a causal link between such a person and a grossly negligent act or omission which has caused death. The prosecution will need to show that an act, or omission, by a controlling mind created a dangerous situation and whether proper precautions were taken to guard against the danger. The larger and more diffuse a company’s structure, the more difficult it has proved to be to attribute grossly negligent acts or omissions committed in the course of the company’s operations to a controlling mind and therefore to the company itself.

It must be noted that it is not possible to aggregate the negligence of individuals even if each is a controlling mind, in order to arrive at gross negligence. The prosecution must be able to prove that at least one controlling mind is guilty of manslaughter before corporate manslaughter can be considered. Conversely, the smaller the company the more likely it will be that such a causal link can be established.

One of the main drivers for the need for legal change has clearly been the difficulties of holding large organisations to account for gross safety failings.

The new corporate manslaughter and corporate homicide Act makes it easier to prosecute companies and other large organisations when gross management failures lead to death by removing the key obstacle of establishing an individual’s “controlling mind” to successful prosecutions.

The new Act complements the current law under which an individual can be prosecuted for health and safety offences and gross negligence manslaughter where there is direct evidence of their culpability.

There are four tests that need to be applied and proven for a “gross negligence manslaughter “case to be successful

• there was a duty of care owed by the accused to the deceased
• there was a breach of the duty
• the death of the deceased (or damage) was caused by the breach
• the breach was so great as to be characterised as gross negligence and therefore a crime
  

Outlining the key benefits of the new Act

The key benefits of the new Act are outlined as follows:

• The new Act makes it easier to prosecute organisations when gross negligence leads to death
• The new offence aims to rectify a key defect in the present law that means that organisations can only be convicted of manslaughter if a single individual at the top of the organisation is also personally liable. This fails to reflect the reality of decision making in large organisations
• The new Act lifts Crown immunity to prosecution. Crown bodies such as Government departments will be liable to prosecution for the first time

• The new Act compliments the current law under which individuals can be prosecuted for gross negligence manslaughter and health and safety offences
• The new Act builds on existing health and safety legislation and does not impose new regulations on business

Conclusion

Without doubt the new Act is a significant landmark in health and safety law which is the culmination of ten years of campaigning by unions and other groups and seems to take account of public pressure and demand to ensure justice for victims of corporate failures.

The true impact of the new Bill will take time to unfold but according to the Bills risk management appraisal less than 15 cases are expected to be heard in the first 12 months which may not be enough if the public ambitions are to be exercised.

In preparation for the new Act, company leaders are urged to consider the following when reviewing their safety systems,

1. Are you a senior manager?
2. Do you understand what may constitute “gross breach”
3. Do you know your personal duties allocated by the company in the company’s health and safety policy
4. Are you competent to deliver them?
5. Do you understand the relevant sanctions for your business?
6. Do you understand the relevant sanctions for you as an individual?

Click here for further details of specific training available from Safety Nett (UK)

Article by Paul Simpson, Managing Director, Safety Nett (UK) Limited

Any views given in this article represent the opinion of the author and should not be considered as a statutory interpretation of the law

The author welcomes any comments or observations in relation to this article.

Date of article: 17 Dec 2007