Health and Safety in the Construction Workplace: When management failures become criminal acts

"Management" seems to be the mantra for the Millennium. Lawyers have seen this particularly in the new Woolf Reforms, which have radically overhauled the entire judicial system to promote justice through better case management. Now the construction industry will find that, following recent decisions in the courts and legislation proposed by the Law Commission, the only way to avoid criminal liability for corporate manslaughter is to improve health and safety management.

In the past, corporate liability for manslaughter had been established by "identifying" a small number of key officers/directors whose conduct was relevant and who represented the "directing mind" of the company itself. This method of establishing corporate criminal liability is vulnerable to the criticisms that a devolved management structure will help insulate the company from criminal liability - it will be difficult if not impossible to identify the "directing mind".

In fact, only two successful corporate manslaughter convictions have ever been achieved, both against small companies where the managing director was in direct charge of the activities leading to the deaths.

Partly in response to the inability to achieve conviction under the "directing minds" principle, health and safety legislation has been increasingly used by the courts to find a way around this problem. Criminal liability under the Health and Safety at Work Act 1974 has been extended not only to contractors and construction companies, but also to employers. In Health and Safety Executive v Port Ramsgate Limited in 1997, the employer (Port Ramsgate) was held to have a duty to exercise control to ensure that the building of a concrete walkway was carried out in a safe manner, despite the fact that the method of procurement was "design and construct". When the walkway collapsed, killing 9 people, Port Ramsgate was found to be criminally liable.

The worrying conclusion from the Port Ramsgate case is that the duty under HSWA 1974 was expressed by the Court to be a non-delegable duty. Reliance by the employer upon professional advisors will not absolve the employer from liability, even though surely on a practical level it is unrealistic to expect a lay employer to notice inappropriate designs. Even then the employer, by intervening to ensure the safety of the works, may lay itself open to claims from the main contractor that the employer’s interference has caused a delay.

But the courts have not stopped there. Failures in health and safety management within a company have been used by the courts to pin criminal liability upon companies whose management structure would otherwise enable them to avoid liability under the "identification" principle. In R v British Steel plc in 1995 the judge ruled (and the Court of Appeal upheld) that the absolute criminal liability under Section 3(1) HSWA 1974 would be useless if corporate employers could avoid criminal liability through sufficiently delegated supervision of their operations. British Steel was therefore found guilty for the acts of two contractors who had disobeyed instructions and behaved in an "extraordinary and unforeseen manner", because the court wished to encourage a responsible and proactive attitude to health and safety management.

The Law Commission has continued the work of the courts, producing a report on corporate manslaughter in 1996. In the report it recommends an offence of "Corporate Killing" for which a company would be criminally liable if:

• a management failure by the company is the cause or one of the causes of a person’s death, and

• that failure constitutes conduct far below what can reasonably be expected of the company in the circumstances.

A management failure would occur, for instance, if the way in which a company manages/organises its activities fails to ensure the health and safety of persons employed in or affected by those activities.

The Law Commission is likely to receive a slot for the new Bill in the next Parliamentary session starting in November this year. Not only will the offence of Corporate Killing do away with the "directing minds" test but minor faults at lower management level could be aggregated to result in the fault of the company as a whole.

The Law Commission has also highlighted proper health and safety management by recommending remedial orders as well as fines as punishment for corporate killing. Remedial orders would force the company to take remedial action to rectify whatever it was that caused the management failure.

The upshot of all these cases and the Law Commission proposals is that all companies involved in the construction industry, whether contractors, developers or employers, should take active steps to ensure the proper management of health and safety issues, with regular assessments at board level and checks on proper compliance right down through the company. And if the company does not critically examine its health and safety management, then be sure that the jury will.

This article was first published in Macfarlanes' Construction Press Newsletter in July 1999.