Key change in the law on corporate manslaughter

Jan 28 2008 By The Journal

Tim Hill, explores the impact that the Corporate Manslaughter and Corporate Homicide Act 2007 will have on all of the region’s employers and urges them to be prepared for its introduction.

CONVICTING organisations of corporate manslaughter will become easier under changes in law this year, if senior managers have collectively breached their duty of care. The Corporate Manslaughter and Corporate Homicide Act 2007, which becomes law on April 6, 2008, is one of the most significant legal changes to corporate responsibility ever made. With it come unlimited fines and a new penalty which requires organisations to publicise their own conviction in the media.

In the past, being convicted of corporate manslaughter required the prosecution to prove gross negligence attributable to at least one very senior individual in a company. This was often difficult, particularly in large organisations with complicated structures where decisions are made jointly.

A series of high profile cases in which prosecutions could not be mounted under the existing law, or in which prosecutions failed at court, prompted a change in legislation. However, arguably the most significant issue is the immediate impact which a police-led fatal incident investigation will now have on an organisation.

What does the new law mean for me?

An organisation can be found guilty of corporate manslaughter if the way in which its activities are managed or organised causes a person’s death and amounts to a gross breach of a relevant duty of care that the organisation owed to the person. However, activities managed or organised by senior managers must be a “substantial element” in the breach of duty.

In determining what is a gross breach, the court must consider whether the “failed” conduct falls far below what could reasonably have been expected. There are a number of factors to be considered, including failure to comply with any relevant health and safety legislation or guidance and how serious that failure to comply was.

A “Senior Manager” can be a person who plays a significant role in making decisions about how a substantial part or all of an organisation’s activities are managed or organised, so could be a director or head of department, or someone heavily involved in the actual managing and organising of a substantial part of the company’s activities. This may also cover those responsible for setting and monitoring workplace practices, such as mid-level managers.

While the Act itself grabs the headlines, in our wide experience, it is the investigation stage that will give organisations most to fear. Although there has been a “Work Related Deaths” protocol in place for some years between the police, HSE, and other regulatory bodies, up until a couple of years ago the police would rarely remain involved in a fatal accident investigation for very long. Now we are seeing the police taking primacy more often, with the added pressure and fear that can bring to an organisation.

Another key issue is the sheer amount of time, effort and cost that these investigations entail. It can take anywhere between 18 months and three years for the police and Crown Prosecution Service to make a decision on whether to bring manslaughter charges, either individually or against the organisation.

Only when a decision on charges has been made, can the coroner then start the inquest process and only when the inquest has finished can the HSE finalise its investigations and consider prosecutions for health and safety offences. It will become increasingly common for an incident to take anything up to four or five years to be fully resolved.

Should my organisation be concerned?

The Act is unlikely to cause an avalanche of convictions that would not previously have been possible. Although it is no longer necessary to identify one employee as representing the “directing mind” of the company in order to secure a conviction, the prosecution must still overcome the hurdle of identifying senior managers who have played a part in the commission of an offence, in order to bring a successful prosecution.

However, it is likely that we will see large fines being imposed upon those companies convicted under the new Act, and a significant increase in corresponding fines for health and safety convictions following fatalities.

In practice, the real fear for businesses should be the impact of the police-led investigation stage following a death in the workplace: the stress for directors facing individual allegations and interviews under caution in police stations; the worry and HR issues for staff members asked to give formal witness statements; and the general feeling of unease which is likely to affect the organisation through the long period before a decision on whether or not to prosecute is finally taken.

Even the most responsible and compliant organisations may find themselves being put under tremendous scrutiny to prove they have ensured the health, safety and welfare of their employees and the wider public.

Managed properly, the Act should reinforce the responsibility that organisations have to their employees and vice-versa, ensuring they have up-to-date policies in place and outlining organisational practice in relation to health and safety issues.

It is imperative that employees are fully aware and comfortable with every aspect of the company’s health and safety policy. Responsibility for maintaining and updating the health and safety policy and ensuring that all employees are aware of any changes, must be taken seriously. Businesses should also formulate crisis plans for a variety of worst case scenarios and ensure that every employee is aware of these – after all, businesses are increasingly defined by how well they respond to a crisis.