UK: Corporate Manslaughter: The New Law

Originally published in Tolley's Company Secretary's Review

The old law of corporate manslaughter was such that it proved to be impossible successfully to prosecute large companies for deaths caused by their activities. That will all change with the new Corporate Manslaughter and Corporate Homicide Act which received Royal Assent on 26 July 2007.

The primary purpose of the new Act is to remedy the failings of the old law and to make it easier to convict companies that kill. It very much links in to a general shift in public expectations that companies should take their safety obligations as seriously as their bottom line. It is now no longer permissible to delegate these responsibilities away from the board. The new regime requires there to be a genuine safety culture within the company and which is driven from the top down.

The new Act does not come into force until 6 April 2008 so as to allow companies time in which to prepare. This article seeks to assist that process by summarising the new offence and then highlighting the areas to which every company is going to have to pay attention to minimise the risk of prosecution under the new Act.

Why has the Act been introduced?

Under the old common law rules, a company could be convicted of corporate manslaughter only if its "directing mind" has been grossly negligent, which then caused a person’s death (known as the "identification principle"). That director or senior manager’s culpability was attributed to the company by virtue of his/her office in order to form the basis of the company’s liability for corporate manslaughter.

Large companies tend to have complex management structures, whose directors and senior management may not be involved in the health and safety decision-making. Accordingly, it had proved to be impossible successfully to prosecute large organisations for corporate manslaughter as a "directing mind" with the requisite culpability of gross negligence manslaughter could not be found. Historically, the only successful prosecutions have been of small ‘owner-run’ companies where there was no difficulty in finding a director or senior manager having been involved in the grossly negligent act or omission that caused death. As Mr Justice Scott Baker put it so forcefully in his Judgment in the unsuccessful corporate manslaughter prosecution of Great Western Trains following the Southall train crash on 19 September 1997:

The new offence of corporate manslaughter

The new offence removes the obstacle of the identification principle. It provides that a company will be guilty of corporate manslaughter if its activities cause a person’s death because of the grossly inadequate way in which the company’s activities are managed or organised. More particular, a company will be guilty if:

• the way in which its activities are managed or organised:

• amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased; and
• causes a person’s death; and

• the way in which its activities are managed or organised by its senior management is a substantial element in the breach.

Whilst this article will focus upon the application of the new offence to companies, the Act will also apply to specified public bodies, police forces and also a partnership, trade union or employers’ association that is an employer. The new offence will not apply to individuals.

Trial will be by jury. If found guilty, a company may be subject to an unlimited fine, a Court order to remedy a particular failing within the company and also, to many eyes the most brutal punishment, an order to require the company to publicise the offence in a manner specified by the Court. Although no doubt obvious it must be stressed that the new Act creates a criminal offence; to be found guilty means punishment – the rationale of orders against a company found guilty is not to compensate those affected but to use punishment as a deterrent.

The First Stage: A gross breach of a relevant duty of care?

The first stage of the offence requires a finding that the organisation has managed or organised its activities in a way which amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased. There are two elements to this. Firstly, the organisation must have owed one of the following duties of care to the deceased under the law of negligence:

• a duty as an employer;

• a duty as occupier of premises; or

• a duty owed in connection with the supply of goods and services; the carrying on of construction or maintenance operations; the carrying on of any other activity on a commercial basis; or the use or keeping of any plant, vehicle or other thing.

The second element of this stage of the offence is that the breach of the duty of care must be gross, that is, conduct which falls far below what can reasonably be expected of the organisation in the circumstances. In order to decide this question, the jury may consider any relevant matter but in particular:

• The jury must consider whether the organisation had failed to comply with any health and safety legislation, the seriousness of that failure and how much of a risk of death that failure posed.

• The jury may also consider:

• the safety culture of the organisation and whether that is likely to have encouraged the failure to comply with, or a tolerance of, the beach of health and safety legislation; and
• any health and safety guidance issued by a responsible body and which relates to the alleged breach.

The Second Stage: The senior managers

In assessing any failings, the new Act specifically requires consideration of whether or not the way in which senior management organised the company’s activities created those failings. In particular, the way in which the organisation was managed or organised by the senior management must have been a substantial element in the breach of the duty of care by the company.

This will lead to much debate as to who are the senior management. The Act provides that the senior management are those 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.

Essentially, strategic and operational managers will be considered to be senior managers. This very much links into the importance which the new Act places upon "the safety culture" within a company.

The principal aim of the new Act is to focus liability on the systems of work adopted by the organisation and to move away from individual fault, which has been the reason why so many high-profile corporate manslaughter prosecutions have failed in the past. Nevertheless, there remains the need to prove some fault on behalf of senior management because their conduct must have been a substantial element in the gross breach of duty of care by the organisation. As Gerry Sutcliffe, Parliamentary Under-Secretary of State for the Home Office, said during a Standing Committee debate, "the question will be whether the organisation overall was negligent, and it is difficult to see how the organisation overall could be guilty if the senior management were diligent in their approach to health and safety".

The Act will come into force next April. It will not be retrospective. There is therefore still a window of opportunity (should one be needed) to take action to minimise the risk of liability under the new offence. The modern approach to safety is well illustrated by the following extract from the Baker report which was produced following the tragic accident at BP’s Texas city refinery in March 2005 which resulted in 15 deaths and more than 170 injuries:

Accordingly, the following issues in particular must be addressed:

• How effective are your health and safety systems?

• Are they rigorously followed or are breaches tolerated?

• Are you complying with all health and safety legislation that is relevant to your organisation?

• What are the health and safety attitudes, policies, systems or accepted practices within your organisation?

• Who are your senior management?

Whilst these questions may be difficult and time consuming to answer, there will be a huge desire to make the new offence work and to secure convictions where the old law failed to do so.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.