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Corporate Manslaughter

November 2007

The Corporate Manslaughter and Corporate Homicide Act 2007 (“CMCHA”), comes into force on 6 April 2008 and creates the offence of corporate manslaughter (or corporate homicide in Scotland). This month’s Working Times looks in detail at the Act and considers how organisations can prepare for the new legislation.

Why do we need a corporate manslaughter act?

In the year 2006 to 2007, 241 fatalities occurred in UK workplaces. Not a single organisation was convicted of corporate manslaughter during that period. The CMCHA seeks to close a loophole which has been highlighted in a long line of highprofile tragedies including the Herald of Free Enterprise and Piper Alpha disasters, the Southall and Hatfield rail crashes and the Kings Cross fire. No convictions for manslaughter resulted from proceedings in respect of any of the above incidents despite for example, in the case of the Herald of Free Enterprise, the judge commenting that the company concerned was “from top to bottom infected with the disease of sloppiness” and, in the case of the Hatfield rail crash, the judge stated that Balfour Beatty was guilty of “the worst example of sustained industrial negligence in a high risk industry I have seen”.

The CMCHA aims to make it easier for bodies such as the Health and Safety Executive to successfully prosecute organisations if they fail to put in place policies, practices and systems to ensure the health and safety of their employees or others affected by their activities and this failure results in death.

Justice Minister Maria Eagle has said, “The Corporate Manslaughter Bill is…. about ensuring justice for victims of corporate failures. For too long it has been virtually impossible to prosecute large companies for management failures leading to deaths. ”

Why is the existing health and safety law so ineffective?

Under the current law, health and safety authorities must prove that one person, a “directing mind” of an organisation, committed the negligent or reckless acts which led to an accident. It is not currently possible to aggregate the effects of the actions of a number of directors who have failed in their duties. This allows large organisations with complex management structures to spread the blame for health and safety failings leading to major disasters, thus escaping liability. The small number of convictions for manslaughter obtained have been against small companies, where directors have been directly involved in the day-to-day operations of the company. Perhaps the most notable example of this was the conviction in respect of the Lyme Bay canoeing tragedy in 1994 when four school pupils drowned whilst taking part in a school day trip.

How is the new law different?

The CMCHA seeks to ensure that organisations of all sizes are held more accountable for their actions. The CMCHA will apply not only to companies, but also to partnerships, limited liability partnerships and some public bodies.

The CMCHA provides that an offence has been committed by an organisation if theway in which its activities are managed or organised by its “senior management” causes a person’s death and amounts to a “gross breach” of a “relevant duty of care” owed the deceased.

“Senior management” is defined as individuals n the making of decisions about the whole or a substantial part of an organisation’s activities ganising the whole or a substantial part of the organisation’s activities. This will include management of national organisations.

The definition of “relevant duty of care” is base on the owed by an organisation under the law of negligence. There will be a “gross breach” of this duty when the conduct of senior management falls far below that prescribed by relevant health and safety legislation.

Penalties

Convictions for corporate manslaughter will carry an unlimited fine. It is expected that the current record fine of £15 million for health and safety proceedings will be broken when the CMCHA comes into force. The Court will also be given the power to impose remedial orders stipulating changes to be made to avoid recurrence of accidents. In addition, the Court will be empowered to compel organisations to publicise details of convictions and any remedial order imposed. Non-compliance with either a publicity or remedial order will be an offence punishable by an unlimited fine.

Liability of individuals

Individuals will not be liable for corporate manslaughter under the CMCHA. They will, however, remain potentially personally liable for breaches of health and safety legislation and/or manslaughter by gross negligence. In addition to penalties prescribed for such offences, directors may be subject to disqualification proceedings in certain circumstances.

Practical steps

In the run up to the introduction of the CMCHA next April, organisations should review its provision of health and safety training for all staff but in particular for staff at senior management level. All organisations are obliged to have a health and safety policy, which must be documented if the organisation employs five or more people. This policy and accompanying health and safety procedures require regular review to ensure compliance with often complex health and safety legislation.

Organisations should consider designating one director or senior manager as responsible for health and safety and/or setting up a health and safety committee to take on this responsibility. The person or people with responsibility for health and safety should oversee training and compliance and ensure that adequate arrangements for monitoring compliance and reporting accidents are put in place.

In the event of an accident resulting in a death, the first 48 hours after the accident are crucial. Organisations therefore need to be prepared and have robust and effective accident management protocols. These are likely to include training for staff on how to deal with investigating authorities, the instruction of specialist solicitors as quickly as possible and the preservation of all potentially relevant evidence to enable expert reports to be commissioned (this should be done by solicitors to ensure that legal professional privilege attaches to reports).

Conclusions

The CMCHA represents the culmination of lengthy attempts to increase corporate accountability and to close an historic loophole which has allowed some organisations effective immunity from conviction for the offence of corporate manslaughter. It is therefore more important than ever for all organisations to act decisively to prevent accidents and put in place adequate arrangements to deal with the aftermath of a death in the workplace.

If you would like any more information about this, or related employment matters, please do not hesitate to contact Adrian Berkeley or Craig Oldale on 0161-371 0011or by e-mail: post@claim.co.uk

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