UK: Corporate Manslaughter - The New Landscape

The government finally issued, in March 2005, its draft Bill on Corporate Manslaughter together with a consultation document. This comes almost 8 years after it pledged in its first manifesto to introduce a new offence of corporate killing. It is worth noting that the much more emotive title of "corporate killing" has been abandoned in this draft, the government preferring to stick with an offence of corporate manslaughter. The draft Bill will codify the law and in so doing abolish the common law offence of manslaughter by gross negligence in so far as it applies to corporations.

The main reason for introducing a reform of the law has been the very small number of successful prosecutions and the perceived ineffectiveness of the existing law to hold large companies to account where there has been a death. The consultation document quotes the following statistics: "since 1992 there have been 34 prosecution cases for work-related manslaughter but only six, small, organisations have been convicted". This stems from the difficulty in finding a senior individual personally guilty of gross negligence manslaughter before the company itself can be convicted of the same offence. That is, gross negligence on the part of somebody who is part of the controlling mind of the company. The Bill will abolish what has become known as the identification doctrine and will introduce a new, specific offence of corporate manslaughter.

The offence will be committed if there was a gross failing by an organisations senior manager(s) to take reasonable care for the safety of their employees or members of the public, which caused a persons death.

The offence will, as now, apply to all companies and other types of incorporated body (including many in the public sector, such as local authorities) and, for the first time, government departments and other Crown bodies. Much of the delay in introducing the new offence can be attributed to arguments about the extent to which there should be immunity carved out for the Crown. The consultation document states clearly that there will be no general Crown immunity and sets out in a Schedule those Crown bodies specifically affected. However, the offence will not apply to central government or public bodies responsible for matters of public policy or carrying out uniquely public functions as their accountability is achieved through Ministers in Parliament, public inquiries, judicial review, the Ombudsman or the ballot box. Other core public functions are also exempt and include government services in a civil emergency, or functions relating to the custody of prisoners.

The new offence is described as a grave criminal offence and as such, key elements of the current law are retained. For example, the need for an organisation to owe a duty of care to the victim and the higher threshold that conduct must have been grossly negligent. The consultation document emphasises that "…. the offence is to be reserved for cases of gross negligence".

This has been touched on already but the new offence will apply to all corporate bodies. This covers companies incorporated under company law, as well as other bodies incorporated under statute, or Royal Charter. For example, it will include local authorities, NHS Trusts and many non-departmental public bodies.

The Bill has jurisdictional limits and will only apply to deaths occurring within England and Wales, although Scotland and Northern Ireland are currently actively considering reforming the law in those jurisdictions. Whilst only deaths within these jurisdictions are caught, it is not necessary for the corporate defendant to have been incorporated in England or Wales. The Bill will extend to all companies, including foreign registered companies, who are operating within England and Wales. However, the Bill does not have extra-territorial jurisdiction, which means it will not apply to deaths of British Nationals abroad, even if they are employed and sent to work overseas by companies incorporated in England and Wales. Nevertheless, any suspicious death of a British National abroad can trigger an inquest (or fatal accident investigation in Scotland) which in turn can lead to the police and Health & Safety Executive investigating, from which other criminal charges can result.

The organisation (corporation, government department or other body listed in the Schedule) can only be guilty of the offence if the way in which the organisations activities are managed or organised by its senior managers amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased and that breach caused the persons death.

What amounts to a relevant duty of care includes the duties owed by employers to employees, transport companies to passengers, manufacturers to users of products, those duties owed by construction companies and occupiers of premises, and those owed by a range of other service providers.

What lies at the heart of the new offence is the requirement for a management failure on the part of its senior managers. The test for management failure focuses on the way in which a particular activity was being managed or organised. It specifically targets responsibility on the working practices of organisations and considers questions about how, at a senior management level, activities were organised and/or managed. Unlike the existing common law, this allows senior management conduct to be considered collectively, as well as individually.

Criminality will only apply to the body corporate where there is gross negligence on the part of its senior managers, who are defined as "those who play a significant role in making management decisions about, or actually managing, the activities of the organisation as a whole, or a substantial part of it". At what precise point within an organisations structure this will apply depends on a number of factors, including the overall size of the organisation. However, the role played by the senior management in the relevant activity needs to be significant, which means decisive or substantial rather than minor or a supporting role.

The management failure by the organisations senior managers must amount to a gross breach of the organisations duty to take reasonable care. This is defined as conduct which falls far below what can reasonably be expected of the organisation. This will be a question for the jury, who will have to consider whether the organisation has failed to comply with any relevant health and safety legislation or guidance. This is widely drafted to mean not only the Health and Safety at Work etc Act 1974 and subordinate Regulations but also any code, guidance, manual or similar publication that is concerned with health and safety matters and is made or issued (under an enactment or otherwise) by an authority responsible for the enforcement of health and safety legislation, i.e. Approved Codes of Practice or guidance issued by the Health and Safety Executive.

In respect of such a failure, it will be for the jury to consider how serious it was, and if it amounts to gross negligence and therefore criminal liability, and whether or not the senior managers:-

• knew or ought to have known that the organisation was failing to comply;
• were aware or ought to have been aware of the risk of death or serious harm posed by the failure to comply; and
• sought to cause the organisation to profit from the failure.

The draft Bill applies only to corporations (in its widest sense) and will not apply to individuals. Despite widespread criticism, principally from Trade Unions, this is a sensible approach, as the existing common law offence of gross negligence manslaughter will continue to apply to individuals as it does now. This aspect of the current law has not been criticised and applies to all individuals regardless of their seniority in the organisation, where by reason of their gross negligence a death ensues. Individuals can also be held to account in their personal capacity for specific offences under the Health and Safety at Work etc Act 1974.

Like the present law, fines will be unlimited and courts can also require that specific remedial action be taken to address, within a specified timeframe, the failures that led to the death. The use of remedial orders is already available under existing health and safety legislation but is seldom used. I envisage that the use of such orders by the courts will become more common place in cases of corporate manslaughter in the future and compliance with these orders could be expensive.

As now, the offence will be investigated by the police and prosecuted by the Crown Prosecution Service, using the Health and Safety Executive as advisors. The offence will be indictable and so all cases will be heard in the Crown court before a judge and jury.

The proposals contained within the draft Bill will create an offence that should be more effective in prosecuting companies and other organisations, which at present escape prosecution because of the difficulty in establishing gross negligence on the part of an individual embodying the company. However, the offence remains targeted at the worst cases of management failure causing death and is designed to capture truly corporate failings in the management of risk.

As well as the possibility of "very high fines", there are hidden costs associated with a successful prosecution for corporate manslaughter such as those involved in complying with a remedial order and the huge impact it will have on a companies reputation and its ability to tender for future work. Insurers will also look carefully at insurance premiums and whether they are prepared to insure the organisation at all in the future.

The Bill is designed to criminalise management's gross disregard for health and safety. It is therefore important for every organisation that falls within the scope of the draft Bill to audit its safety management system as a matter of priority, and to take immediate steps to ensure its systems for managing health and safety are effective and encourage the development of a positive safety culture.