After more than ten years of debate and much speculation about its content, the Corporate Manslaughter and Corporate Homicide Act 2007 ("the Act") has finally made its way to the statute book. The Act extends to all corporate entities and will therefore apply to any company that operates and manages hotels throughout the UK. It will not necessarily be the typical high-risk industry that will be the first to see a corporate manslaughter prosecution. The very nature of hotel business, with its day-to-day high volume passage of customers, employees, and contractors through hotel premises (each of whom could be exposed to risk by a hotel's activities), make it an industry that has a particular need to be aware what the Act means and crucially how to avoid exposure to prosecution for the new offence under the Act.
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After more than ten years of debate and much speculation about its content, the Corporate Manslaughter and Corporate Homicide Act 2007 ("the Act") has finally made its way to the statute book. The Act extends to all corporate entities and will therefore apply to any company that operates and manages hotels throughout the UK. It will not necessarily be the typical high-risk industry that will be the first to see a corporate manslaughter prosecution. The very nature of hotel business, with its day-to-day high volume passage of customers, employees, and contractors through hotel premises (each of whom could be exposed to risk by a hotel's activities), make it an industry that has a particular need to be aware what the Act means and crucially how to avoid exposure to prosecution for the new offence under the Act.
The Act came into force in April this year and introduces a new offence of corporate manslaughter but does not actually impose any additional duties on employers. The new offence will be directed against the company, not the individual. Over the years there has been considerable pressure from various lobby groups and MPs on the issue of corporate accountability. Some high profile attempts to secure convictions under the existing law failed because, although the courts did not have any difficulty with the principle of convicting a company for manslaughter, the prosecutor could not identify the "controlling mind" of the corporation to whom the breach or failure could be linked.
Interpretation of the new law – the jury
The new offence will apply where an organisation has been responsible for causing a person's death by a gross breach of a relevant duty of care owed by it to the deceased person.
A gross breach is defined in the Act as one that falls far below what can reasonably be expected of the organisation in the circumstances. This will be for a jury to decide, and it is likely to be difficult for a jury to ascertain whether or not the test has been established and offence committed. The offence will also have to have been committed with the involvement of senior management. This means that, to establish the offence against the organisation, it will be necessary for the way the organisation's activities were managed by senior management to constitute a substantial element of the breach.
The Act requires the jury to consider whether the evidence shows that the organisation failed to comply with Health and Safety legislation that relates to the alleged breach and, if so, how serious that failure was and to what extent it posed a risk of death. This is an unusual concept and one that might well cause an organisation not to plead guilty to any lesser regulatory offences, for fear of establishing guilt in relation to the offence of corporate manslaughter under the new Act.
The Act also invites the jury to consider the extent to which the evidence shows that there were "attitudes, policies, systems or accepted practices within the organisation that were likely to have encouraged any such failure or to have produced tolerance of it". The prospect of an organisation having its attitudes and safety culture scrutinised by a jury will be a disturbing prospect for senior management and directors. Inevitably, following the death of an employee or a person engaged in an organisation's activities, there will be considerable adverse publicity, and policies and attitudes will be examined in a critical light.
Difficulties in interpretation
The old offence of common law corporate manslaughter by gross negligence is abolished by the new Act, but prosecution of individuals for common law manslaughter will, of course, remain. Pursuing a company for a statutory offence under the new Act, and at the same time individuals under the common law, with different standards imposed by the two offences, may create difficulties in court proceedings.
The new offence refers to a senior manager as one who actually manages or organises a substantial part of the organisation's activities. This probably captures regional managers and others below board level tasked with specific areas of the company's activities. The specific definition of senior management is a change from the common law approach, where the controlling mind was considered to be somebody at senior level controlling activities through the decision-making process of the organisation.
The Act appears not to have departed far from the common law, in that the involvement of senior management has to constitute a substantial element in the breach. This comes quite close to the common law concept of the controlling mind, and may give rise to similar problems, although the reference to actual management might mean that senior management is a larger category of management than its common law equivalent.
To whom is the duty owed?
The Act rather helpfully defines those to whom the duty is owed as being those to whom a duty of care is owed under the law of negligence by virtue of:
- their being employees or others working for the
organisation or performing services for it
- a duty owed as occupiers of premises
- a duty owed by virtue of carrying on any construction or
maintenance operations
- a duty owed by virtue of the organisation's
carrying on any other activity on a commercial basis or its
using or keeping any plant vehicle or other thing.
Basically, this covers everyone to whom a duty would be owed under the law of negligence (in other words, those whom the organisation could reasonably foresee would be affected by any failings on its part). This duty of care is essentially the same as the very wide duty contemplated in the 1974 Act.
Enforcement
The offence is to be prosecuted in the High Court only and fines will be without limit (as is currently the case under the 1974 Act). It is anticipated that fines will be higher, reflecting the more serious nature of the offence. Recent proposals by the Sentencing Advisory Panel (SAP) have recommended that sentencing guidelines for the offence of corporate manslaughter be produced, setting fine levels at between 2.5% and 10% of an organisation's turnover. The SAP recommendations are yet to be approved but it seems highly likely that fines for the new offence will outstrip those handed down under the 1974 Act.
The court will also have the power to order a defect to be remedied and to order the entity to publicise certain facts of the conviction. There would normally be considerable press coverage in any case, but certainly it is more likely to be the reputational aspect of the conviction that will concern organisations more than the actual fine.
The way forward – due diligence
There is no specific statutory defence provided in the Act, but its reference to the factors to be taken in to consideration (such as the attitudes, policies or systems within the organisation), and the necessity for senior management to have been involved in some way, give an indication of what may be required.
Senior management will need to be able to demonstrate, by means of a paper trail, compliance with Health and Safety regulations. This may include the audit and review of current policies and practices with regard to the full Health and Safety regulatory regime applicable to their organisation as it affects those working within and for the organisation (including contractors).
Guidelines issued by the Health and Safety Commission and the Institute of Directors offer useful guidance in this area and can be viewed in full at http://www.hse.gov.uk/pubns/indg417.pdf.
Similarly, the health and safety microsite on the Institute of Directors' website provides further guidance in this area.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 05/08/2008.
