Liability under the Corporate Manslaughter Act

Lawyers are advising organisations to take immediate steps to put their
health and safety practices and procedures in order in light of the new
Corporate Manslaughter & Corporate Homicide Act 2007, the main provisions of
which will come into effect from 6 April next year.

The new Act is set to make prosecutions for health and safety failures more
straightforward.
“The Act was brought in to address the problem of securing convictions against
larger organisations where it has previously proved difficult to successfully
secure a prosecution for corporate manslaughter without proving the liability of
an individual or individuals within that organisation,” said Philip Collins,
health and safety specialist at Lemon & Co Solicitors.

He added that “all businesses need to be aware of the implications of the
Act, as all organisations, large or small, will still be covered and liable to
prosecution.”

Prepared to act
However, recent research by publisher Croner suggests that 51% of businesses are
not prepared for the Act and, more worryingly, 48% believe that it is not
relevant to them.

“Now, companies and other organisations ­ including government departments
which have had their Crown immunity lifted for the first time ­ face unlimited
fines if they are found to have caused death due to gross corporate failures in
health and safety,” said Ron Reid, partner and regulatory law specialist at
solicitors Shoosmiths.

The new Act creates the offence of corporate manslaughter which will be
committed when an organisation which owes a duty of reasonable care for a
person’s safety is found to be in breach of that and caused their death as the
result of the way its activities have been managed or organised.

Individuals cannot be prosecuted under the Act. The legislation states that
“an individual cannot be guilty of aiding, abetting, counselling or procuring
the commission of an offence of corporate manslaughter”, nor can an individual
“be guilty of aiding, abetting, counselling or procuring, or being a part in the
commission of an offence of corporate homicide.”

Reid said that “while this new legislation still doesn’t provide for personal
liability for individual directors and managers, they will remain vulnerable
because the law relating to manslaughter by gross negligence will remain in
force.”

Duty of care
In future, successful prosecutions will be achieved when it shows that the
failure within the organisation came from the way in which its activities are
managed or organised, that this caused a person’s death and amounts to a gross
breach of the company’s duty of care to the deceased.

Sally Morris, partner and head of employment law at mfg Solicitors, says that
the law will make companies ­ not individual directors ­ liable for any deaths
due to a general breach of the duty of care by the firm. Companies that have
good safety policies have nothing to fear from the new Act, even if someone dies
in an awful accident. Only those that can be shown beyond reasonable doubt to
have been homicidally reckless about risk and the failure caused substantially
by “senior management” ­ either individually or collectively.

Senior managers are defined as people who play a significant role in the
management of the whole or a substantial part of the organisation’s activities.
So the focus has moved from the culpable individual to the aggregation of senior
managerial responsibility.

Up to the role
Morris says that the immediate effect for employers is most likely that there is
a review of job titles to ensure the employer accurately reflects the seniority
of the role.
“Directors should not take on health and safety management responsibilities that
they are not competent to undertake,” said Morris.

“Any person that is given health and safety responsibilities will need to be
competent and have sufficient authority to ensure that risks are properly
managed,” she said. “More then ever, the board of directors will need to have a
role in promoting health and safety management because of the need to
demonstrate that there existed a health and safety compliant culture.”

The penalty for being found guilty of an offence under the Act is an
unlimited fine. Courts also have the power to remedy any management failure,
health and safety policy and system or practice that lead to a death.

Morris says that it is hoped that the effect of a possible conviction, and
resulting penalties, will be a sufficient incentive for companies and employers
to provide their employees with safer working environments.

Act now
Commercial law firm Bond Pearce says that in preparation for the Act a business
should:
• Obtain and consider all health and safety guidance applicable to their
business;
• Consider industry standards – what benchmarks is the company working to?
• Ensure all risk assessments are up to date and reviewed;
• Implement a consistent and documented enforcement regime for health and safety
issues;
• Consider what element of the company’s budget is spent on health and safety;

• Review the company’s policies and near miss reports and procedures;
• Review the company’s policies and assessments in relation to vehicles and
work-related driving;
• Consider the company’s hierarchy and determine who would be considered senior
management for the purposes of the Act;
• Review the company’s safety culture – regardless of documents, policies and
procedures;
• Are employees able to report health and safety concerns confidentially?
• Check the extent of the company’s insurance cover for criminal costs. Most
policies only cover defence costs to the Magistrates Court; and
• Check the extent of any insurance policies in place covering criminal costs
for directors or officers of the company.

Useful links
www.lemon-co.co.uk

www.bondpearce.com

www.shoosmiths.com

www.mfgsolicitors.com
www.tuc.org.uk

www.corporateaccountability.org