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Corporate Manslaughter Act
Builder & Engineer
25 February 2008
Judith Seddon, business and regulatory investigations partner at law firm Russell Jones and Walker, discusses the implications of the Corporate Manslaughter Act.
THE Corporate Manslaughter Act 2007 (CMA) concludes the long journey towards codifying the law regarding the criminal responsibility of corporations for manslaughter, with the ultimate ambition of improving the prospects of prosecutions – particularly prosecutions of larger organisations – that are
brought in such cases.
No longer will complex decision-making structures of large organisations serve as protection from prosecution or conviction. Under the CMA, the often insurmountable obstacle of the “identification principle” is removed, which required a senior manager to be personally culpable before a corporation can be convicted. From 6 April the offence is committed where an organisation manages or organises its activities, substantially by senior management, in a way which causes a person’s death and amounts to a gross breach of a relevant duty of care. Conduct will amount to a gross breach if it falls far below what could reasonably be expected in the circumstances.
Organisations will be subject to greater scrutiny than ever before with juries encouraged to look into the internal practices to assess an organisation’s general attitude towards safety enforcement and control. Juries will not just be encouraged, but required to look at whether the organisation failed to comply with health and safety legislation, how serious such failure was and how much of a risk of death it posed. This should move health and safety right up the agenda of all organisations because if convicted an organisation will face an unlimited fine and is likely to be the subject of a publicity order and where appropriate, a remedial order.
The level of fines is rising against companies. We need only look at some of the recent fines imposed in relation to anticompetitive behaviour to see the level that fines may reach. But there is nevertheless concern that the level of fines as against companies for health and safety breaches leading to death remains too low.
The Sentencing Advisory Panel proposes that fines for convictions in cases of corporate manslaughter “should be set at a level significantly higher than for an offence under the Health and Safety at Work Act involving death”. Indeed, the panel’s proposals could see some companies fined up to 10% of their average annual turnover during the three years prior to sentencing. The largest fine imposed to date for a health and safety offence resulting in death was £15m in the case of Transco, where four members of a family died in a gas explosion. That fine represented less than 1% of Transco’s annual turnover.
Furthermore, the indirect costs of a publicity order, likely to be imposed in every case where a conviction results, are impossible to quantify but could be significant with serious ramifications for an organisation’s profitability and future growth. The publicity order will require publication of the fact of conviction, specified particulars of the offence, the amount of any fine imposed and the terms of any remedial order made. Depending on the size of the organisation, it could require that such publicity be made on national television or radio, in the local or national press and may also require companies to inform shareholders and/or customers by letter or using the organisation’s website.
Whilst there is no individual liability, the Act specifically retains the option of pursuing corporate manslaughter and health and safety charges simultaneously. The law relating to the prosecution of individuals remains the same. With more investigations, individuals should expect to become increasingly caught up in the process either as witnesses or as defendants. If the facts warrant it they could face individual manslaughter charges or health and safety charges by virtue of section 37 of the Health and Safety at Work Act if it can be shown that they have consented or connived in the commission of the offence or if the offence was attributable to their neglect.
The key message for businesses is that from top to bottom health and safety must be incorporated into their culture and figure prominently within the organisation both at the highest levels as well as in their day-today practices and systems. The Institute of Directors’ recent guidance sets out three essential principles for organisations to follow to ensure good health and safety performance. Strong and active leadership from the top, worker involvement and assessment and review.
The CMA should encourage everyone involved in the process, from the organisations themselves, to the police investigating the offences, to the courts in their approach to sentencing, to view health and safety failings with the seriousness that they deserve.