UK: Corporate Manslaughter And Corporate Homicide Act 2007

The Corporate Manslaughter and Corporate Homicide Act 2007 (the Act) will largely come into force on 6 April 2008. This follows apparent increasing concern amongst the public that companies and organisations are not being held sufficiently accountable for deaths caused by "criminal" negligence.

The Old Law

Previously, it was only possible to bring a successful corporate manslaughter case if it could be shown that one person, who was a "controlling mind" of the company, had committed reckless or grossly negligent acts or omissions which led to the accident. The larger the company, the more difficult the test was to apply. Under the old regime there were very few successful prosecutions. Indeed, none of the series of recent rail and ferry disasters has resulted in a successful prosecution for manslaughter being brought against any of the relevant rail and ferry companies.

The New Offence

Organisations such as corporations and trade unions will be guilty of the new offence if:

• the way their senior management organises or manages their activities causes a person's death; and

• this amounts to a gross breach of a relevant duty of care owed to the deceased.

The offence is, therefore, concerned with the most serious incidents of management failure that result in death, which overcomes the historical obstacle of finding a "controlling mind" of the organisation directly responsible, via an unbroken chain of responsibility.

Gross Breach of Duty of Care

For the purposes of the Act, a "relevant duty of care" is essentially the same as the duty of care owed by an organisation under the law of negligence. The Act specifies the particular duties, which include a duty owed to employees or other workers, a duty owed to occupiers of premises, and duties owed in connection with activities such as the supply of goods and services, the carrying on of construction or maintenance operations or indeed any other commercial activity.

The test to determine whether there has been a "gross breach" of any relevant duty of care is whether the conduct in question falls far below what can reasonably be expected of that organisation in the circumstances. In determining this issue, the Act requires a jury to consider whether the evidence shows that the organisation failed to comply with any health and safety legislation and guidance relating to the alleged breach and, if so, how serious that failure was. This will involve looking at senior management's conduct (collectively and individually) to ascertain the root cause of the failure to provide adequate practices and systems for managing the particular activities the organisation undertakes. The jury may also consider whether the evidence shows there were attitudes or accepted practices within the organisation that were likely to have encouraged the failure, or to have led to tolerance of it.

The test to determine whether there has been a "gross breach" of any relevant duty of care is whether the conduct in question falls far below what can reasonably be expected of that organisation in the circumstances.

Senior Management

"Senior management" are those who play significant roles in either the making of decisions about how the whole or a substantial part of the organisation's activities are managed or organised, or the actual managing or organising of those activities. An organisation will be guilty of the new offence only if the way its activities are managed or organised by senior management is a substantial element in the gross breach of a relevant duty of care that leads to death.

Whether the role of senior managers is significant is a question of fact, and it is intended to capture those whose role is decisive or influential.What amounts to a substantial part of the organisation's activities will vary but is intended to capture, for example, management decisions at regional level within a national organisation, or those responsible for overall management of particular divisions of an organisation's operation.

It is not intended to catch immediate, operational negligence causing death, or the unpredictable acts of employees.

Conviction

Only relevant organisations can be liable for the new offence, not individuals. The Act does not, therefore, increase liability for individual directors or managers, who can still be held to account through health and safety legislation and the common law of manslaughter. As a result, the Act provides for an unlimited fine in the event of conviction, rather than a term of imprisonment. The Court also has the power to make "remedial orders" against convicted organisations, which require them to remedy breaches of duty and to make "publicity orders" requiring them to publicise the conviction and the particulars of the offence. Failure to comply with a remedial or publicity order is a criminal offence punishable by an unlimited fine.

Foreign Companies

The legislation has no jurisdiction outside of England andWales so, despite the Government's insistence that foreign companies operating in Britain will be held liable, it may be difficult to prosecute companies where individual senior managers responsible for implementing those particular health and safety procedures are themselves based abroad.

Review Of Existing Systems

Companies should take this opportunity to review the application and effectiveness of corporate safety management systems and whether any improvements can be made in procedures for ensuring dangerous activities are properly resourced and planned before being undertaken. It may also be sensible for companies to commission an independent audit and review of their safety management systems. Guidance for directors (and by extension other senior managers) from the Health and Safety Commission is available at

http://www.iod.com/is-bin/INTERSHOP.enfinity/ eCS/Store/en/-/GBP/IODContentManager-Start?ChannelID=2&MenuID=17&TemplateName=policy/content/regulation/pol_regulation_leading_health_safety_guide.isml.

Companies should review their liability insurance to check that legal costs incurred under the 2007 Act are covered by the policy.

Conclusion

The Act has been implemented in response to what is said to be an increase in public concern in light of the disasters referred to above, but it remains to be seen whether the legislation does add anything to the policing, and prosecution, of health and safety failures. The new offence does not make directors directly responsible for the health and safety of their staff and others.

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.