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The Corporate Manslaughter and Corporate Homicide Act 2007
27 February 2008
Of the many new beginnings in 2008, it is widely predicted that
we will see a greater number of investigations and prosecutions
resulting in charges of corporate manslaughter. This is
because on 6 April 2008, the Corporate Manslaughter and Corporate
Homicide Act 2007 should be implemented. The Act is designed
to make it more straightforward for prosecutors to bring
prosecutions against companies whose employees are involved in
fatal accidents.
Official guidance on the much debated Act was
published late last year. This guidance addresses some
specific questions which have been raised about the detail of how
the Act will operate. The guidance makes clear the scope of
the Act, for instance how it may apply to partnerships, Government
bodies and foreign companies. It clarifies the scope of
exemptions from prosecution under the Act and gives some indication
as to the likely approach the courts will take when sentencing this
new offence.
Impetus for the creation of the Act stemmed
from major accidents such as the 1997 Southall rail crash, and the
1999 Paddington disaster, in which 31 people were killed in a train
collision. Following these accidents, it became clear that
the existing laws enabling prosecutions against companies for
manslaughter were too weak. The previous laws required a link
between the deaths and the gross negligence of an individual who
was said to be the embodiment of the company. In large
companies, this was difficult to prove.
The new Act addresses this problem by instead
focusing on the corporate culture of senior management as a
whole. A company will be guilty of the offence if it can be
shown that the way in which the company manages or organises its
activities amounts to a gross breach of a duty of care to the
deceased. Thus, the way in which senior management organises
its activities assumes particular significance.
Relevant duties include duties owed by a
company under legislation or the common law to its employees, as an
occupier of premises, as the keeper of any plant or vehicle, and
generally any duties owed as a business which carries on any
activity on a commercial basis.
There are also definitions of what constitutes
"senior management" for the purposes of the Act, and what will be a
"gross" breach. In determining the latter question, a jury is
entitled to consider whether the evidence shows that a company has
failed to comply with relevant Health and Safety legislation, and
to consider whether there were accepted practices or attitudes in
place within the organisation that were likely to have tolerated
such a breach.
Some have suggested that the importance placed
on senior management's activities raises a risk that some companies
may seek to delegate health and safety responsibilities to more
junior managers, so as to attempt to escape liability under the
Act. However, the new guidance makes it clear that this
approach would leave organisations vulnerable to prosecution.
Although, the good news is that Company
Directors will no longer risk personal liability for corporate
manslaughter, the Health and Safety at Work Etc Act 1974 will
continue to operate and this includes a specific basis of
prosecution for individuals who can be shown to have been in breach
of their duties under Health and Safety legislation.
In preparation for implementation, companies
should review their management structure and the way activities are
managed or organised so as to ensure that Health and Safety
policies are in place, being properly implemented and are
workable. Companies may also want to review their insurance
cover to ensure that it extends to cover any prosecutions under
this Act. The range of penalties which may be imposed include
an unlimited fine, plus an order requiring the company to remedy
the identified breaches, plus significantly, an order to publicise
the conviction.
Recent sentencing guidelines are suggesting
that penalties may be treated in a new way and could be based on up
to 10% of average annual turnover.
The Government expects approximately 10-13
prosecutions for corporate manslaughter to be brought nationally
each year. This might not seem like a large amount, but this
will not matter if your company is one of the first to be
prosecuted.
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