Corporate Manslaughter
Introduction
The Corporate Manslaughter and Corporate Homicide Act 2007 (2007 Act) comes into force on 6 April 2008. The 2007 Act introduces a new statutory criminal offence, replacing the existing common law offence of manslaughter by gross negligence, and is intended to make it easier for the authorities to successfully prosecute large organisations where a corporate management failing has led to death, by introducing a new test: that of a substantial senior management contribution to the company's breach of duty. Prosecutions will be heard in the Crown Court and decided by a jury. Corporate Manslaughter prosecutions will now be high on the agenda of the prosecuting authorities whenever there is a highly publicised incident involving the death of workers or members of the public.
Background to 2007 Act
There have been only a handful of cases in which companies have been convicted of manslaughter under English law, however no large organisations have ever been convicted. The criminal prosecution of P&O (related to the sinking of the Herald of Free Enterprise in March 1987) failed because, despite various individuals within the company being negligent, no particular individual in a sufficiently senior position was considered to be the "mind and will" of the company. The subsequent failure of criminal charges against Railtrack and three of its executives (including its chief executive) following the Hatfield rail accident sparked calls for new legislation to reform corporate killing laws which ultimately resulted in the 2007 Act.
The new offence
From 6 April 2008, an organisation will be guilty of corporate manslaughter under the 2007 Act 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 to the deceased (section 1(1)).
Furthermore, the contribution of senior management must be regarded by the jury as a substantial element in the corporate causation of the breach of duty (section 1(3)). The 2007 Act does not have retrospective effect and will only apply to deaths occurring after 6th April 2008, with fatalities occurring prior to this date being covered by the existing law.
An important feature of the new law is that it largely (apart from some public policy decisions and core public function exceptions) removes the Crown immunity that applies to the existing offence, meaning that public bodies can now face prosecution.
Duty of Care:
A relevant duty of care to the deceased is a requirement for liability. Companies will owe a relevant duty of care in most situations, for example; as an employer to its employees and other persons working for the organisation, as an occupier of premises and when supplying goods or services.
Gross breach of duty of care:
In finding whether there has been a gross breach of a relevant duty of care, the jury must consider; whether the organisation has failed to comply with Health & Safety legislation relating to the incident, the seriousness of that failure and how much of a risk of fatality was posed by it (section 8(2)). The jury may also consider the extent to which attitudes, policies, systems or accepted practices exist in the organisation that were likely to have contributed towards the Health and Safety failure (section 8(3)).
Senior Management Contribution:
This is defined as the persons who play significant roles in; the making of decisions about how the whole or a substantial part of the organisation's activities are to be managed or organised, or, the actual managing or organising of the whole or a substantial part of those activities (section 1 (4) (c)). Persons falling within this category will have their aggregated conduct examined to see if corporate managerial or organisational failings substantially contributed to the company's breach of its duty of care.
Fatality investigations
Following a fatality, investigations will be carried out by the police with the assistance of the Health & Safety Executive, whose involvement may result in a prosecution for breaches of Health & Safety legislation in addition to corporate manslaughter. The new law will necessitate a far greater concentration than previously on individuals fulfilling the senior management role definition and whether their acts or omissions contributed to the fatality. This is because of the 2007 Act's requirement to prove senior management involvement in the breach of the duty of care.
No individual liability:
S.18 of the 2007 Act states that there is no individual liability for corporate manslaughter. However, the investigators' increased focus on senior management is expected to result in increased prosecutions of directors and managers for Health & Safety breaches who, upon conviction, will be liable to fines and disqualification as company directors.
What penalties will an organisation face?
Penalties will include unlimited fines, remedial orders and publicity orders. The 2007 Act makes no provision for fining individual officers of the company. Given that the 2007 Act creates a statutory homicide offence, it is to be expected that corporate manslaughter fines will exceed health and safety penalties (which have reached multi-million pound penalties) by a significant margin. A remedial order will require a company or organisation to take steps to remedy any management failure that led to a death. The court can also impose an order requiring the company or organisation to publicise that it has been convicted of the offence, giving the details, the amount of any fine imposed and the terms of any remedial order made. Breach of a remedial order or publicity order will be a criminal offence, also subject to a fine.
Recommended action pre 6th April 2008
Companies should conduct a thorough review of their corporate safety management procedures as soon as possible. Organisations should consider whether improvements can be made to the existing systems to ensure that perilous activities are properly resourced and planned before being carried out. Management should also make a new assessment of areas of business operations with the potential to cause serious injury and death and review how successfully the safety management system has been operating to control, reduce and remove any risks.
The culture towards Health & Safety in the organisation should be studied and senior management should question how it would come across if examined in court and what employee representatives might say under cross-examination.
Organisations should consider commissioning an independent audit of safety systems and in-house culture towards Health & Safety. The effects of the 2007 Act on liability insurance should also be checked, especially in relation to legal costs after 6th April 2008. Company directors should review their responsibilities as set out in the Health & Safety Executive's guidance.
Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
|
