Corporate manslaughter rule changes imminent
Corporate manslaughter rule changes imminent
Katherine Southby is head of regulatory at Bradford and Leeds-based law firm Gordons.
Having its origins in the Labour manifesto pledge of 1997, the Corporate Manslaughter Bill which finally received Royal Assent on 26 July 2007 has had a long and tortuous birth en route to coming into force in April next year.
The government have cited this legislation as demonstrating their “commitment to bringing forward a criminal offence so that companies that have dismally failed to pay proper attention to people’s safety are brought to book”.
After a decade of inertia and parliamentary ping pong, a finalized bill was certainly politically necessary. Arguably the changes were necessary from a legal perspective also, following high profile failures in securing convictions under the old law – notably in relation to the Herald of Free Enterprise(1987), Southall Rail Disaster (1997) and Larkhall Gas Explosion (1999).
The new law retains key aspects of the previous offence – namely the need to prove a gross breach of a duty of care leading to death. The significant difference comes in the way in which the court will assess the nature of the breach.
Previously it was necessary to identify individual directors who acted as the controlling mind of the organization and were personally grossly negligent. This was bad news for the small and medium sized company where corporate accountability was very clearly placed in the hands of only a very few individuals. For larger corporations with multi-layered structures of management responsibility, no one person could be identified as having committed the breach, and consequently prosecutions were doomed to fail.
The key change therefore under the new regime is the ability to prosecute the company itself for collective management failures, rather than the need to seek an individual ‘directing mind’ to shoulder personal criminal responsibility for the company’s failings.
So, it is a gross breach capable of prosecution if the conduct of the organization as a whole falls far below that which could be expected of that organization in the circumstances. The new approach therefore takes a systemic analysis of the implementation of Health and Safety principles which will not be unfamiliar to those used to dealing with their organizations’ obligations under the Health and Safety at Work Act 1974.
The changes therefore go some way towards addressing the previous criticisms. However, the new law stops short of allowing the aggregation of several individual’s shortcomings to make up an overall management failure. The new law does nothing either to increase the ability to prosecute an individual director personally for their failings. The existing provisions under the old law, together with their inherent difficulties to pin responsibility on an individual “directing mind” of the company, remain.
Supporters have suggested that the new Act will bring with it more and higher value prosecutions, failing to mention that currently following a workplace death a company can already be prosecuted for its failings under the general duties of the Health and Safety at Work Act 1974. This also carries an unlimited fine and companies cannot evade responsibility under this act by claiming that the incident occurred as a result of the actions of a junior employee. So with management responsibility already in existence and the maximum penalty remaining unchanged in reality is anything set to change?
There seems little doubt that the key change is in the political and enforcement climate. If a corporate conviction with an unlimited penalty is already an available option is this more than anything a “re-branding”with a view to securing larger fines and higher levels of post-conviction publicity?
At the time of its initial inception the then Home Secretary Charles Clarke commented that “those organisations who already take their obligations under Health and Safety Law seriously have nothing to fear”. As ever with Health and Safety it is as much the ability to demonstrate how seriously one takes those obligations that counts when defending a prosecution.
Directors may be heaving personal signs of relief that the scope of the new bill is not wider and more far-reaching for individuals, but businesses need to ensure that not only do they have policies and procedures in place, but that they can demonstrate how they are rolled out, implemented and trained into the day to day systems of the organization.
Acknowledgements
Gordons regularly advises on risk and compliance issues. If you require any further information or advice please contact Katherine Southby on 0113 227 0100. Issued on behalf of Gordons LLP by Radiant. For further information contact Rob Smith on 0113 394 4610 or mobile 07840 677534 or email: rob.smith@radiantpr.co.uk
