Corporate Manslaughter Act: What does it mean for senior management?
The new Corporate Manslaughter and Corporate Homicide Act 2007 comes into force on 6 April 2008 – this Sunday. Are you aware of what it means for your business?
For over a decade, successive Governments have faced continual criticism that existing Health and Safety legislation - coupled with the common law offence of corporate manslaughter - are wholly inadequate to deal with the most serious of tragedies, including those occurring in the workplace.
Under existing common law provisions, to find an organisation guilty of gross negligence manslaughter, the prosecution has to prove this - beyond all reasonable doubt - on the part of an individual who themselves are part of the ‘directing mind’ of the organisation which caused or contributed to the death.
Evidentially, this has proven to be an almost insurmountable task, particularly in relation to large organisations where, in reality, there’s no single individual who could properly be considered part of the ‘directing mind’ of the organisation, and who’s also individually guilty of gross negligence manslaughter.
However, the new offence of corporate manslaughter (or corporate homicide in Scotland) will be committed if the way in which a business’ senior managers organise or manage their activities causes a person’s death (and this amounts to a gross breach of a relevant Duty of Care owed by the organisation to the deceased).
The shift of focus from the ‘directing mind’ to senior managers in the new offence is considered to make it easier to obtain successful convictions for corporate manslaughter where in the past it has been almost impossible when the organisation concerned has been anything larger then a small business.
Spotlight on senior managers
The new focus on ‘senior managers’ means that more members of an organisation will face scrutiny than would have been the case under previous law. Senior managers are defined as those who play a significant role in the making of decisions about how the whole - or a substantial part - of an organisation’s activities are to be managed or organised, or those who play a significant role in the actual managing or organising of those activities.
The management and organisation of activities has to be a substantial factor in the breach of Duty of Care. This means that the organisation can still be found guilty, even if part of the Duty of Care breached has been legitimately delegated to someone outside of the definition of senior management.
The new Corporate Manslaughter and Corporate Homicide Act 2007 comes into force on 6 April 2008. However, businesses must ensure that, before this date, they’re satisfied that their Health and Safety management systems will stand up to the inevitable scrutiny of the new legislation if the worst should happen.
For businesses within the security sector, it’s extremely important to note that the Act doesn’t come into force with respect to custodian institutions, custody at Court or police stations, detention at a removal centre or short term holding facility or prison/immigration escort arrangements on the same date. Currently, there is no set date for its implementation with respect to these areas. However, there is a commitment by the Government to implement the Act here within three years. Until the Act is implemented with respect to these areas, the old law of common law gross negligence manslaughter - as briefly described above - continues to apply.
What about deaths in custody?
One major area of potential liability arising when the new Act is implemented with respect to organisations having a Duty of Care for those in custody - such as those contractors who run prisons and the police service - will be in relation to deaths in custody (and in particular prisoner suicide).
The police service and those who run prisons are already under an obligation to ensure the safety (and protect the lives) of those in their care, and are often the subject of detailed investigations by the State into such deaths. The new Act will inevitably make it a lot easier for those who run prisons and the police to be prosecuted for corporate manslaughter should there be a death in custody.
To that extent, we would advise relevant organisations should nevertheless already be examining their systems in place to protect those in their care and the effectiveness of them, such that any changes needed can be made in preparation for the new Act coming into force with respect to their organisation.
A full listing of those areas not covered by the Act when it comes into force on 6 April 2008 are contained within the Act itself.
How will the Act affect security?
The potential for the new Corporate Manslaughter and Corporate Homicide Act to affect the security industry is vast. In the first instance, this is due to the high levels of risk involved in the operations with which the industry is concerned, such as the transit and depositing of cash and other valuable materials, and the general protection and/or safekeeping of vulnerable persons or those in danger.
The new legislation is intended to introduce true corporate accountability for manslaughter, but doesn’t bring with it any accountability for individual directors or senior managers. Consequently, only the organisation itself can commit an offence under the new legislation. Be warned, though. This doen’t mean that individuals are altogether exempt from prosecution for manslaughter.
“The shift of focus from the ‘directing mind’ to senior managers in the new offence is considered to make it easier to obtain successful convictions for corporate manslaughter”
Individuals - including directors and senior managers - can still commit an offence of gross negligence manslaughter under the common law. With the ingredients of the new corporate manslaughter offence having such a focus on the acts or omissions of senior managers, it seems logical that they will be the focal point of any manslaughter investigation conducted by the police service.
There are no new obligations imposed upon businesses under the Act. Under the new law, a Duty of Care will be owed by an organisation to the deceased under the same circumstances as is already owed under the law of negligence (an exhaustive list of those circumstances are provided in the Act). For example, one can see practically that existing Health and Safety law already imposes obligations on all employers, so far as is reasonably practicable, to ensure the Health and Safety of their employees, as well as those not in their employment who may nonetheless be affected by them.
Other duties detailed in the Act include the duty owed in connection with the supply of goods or services and the use or keeping by the organisation of any plant, vehicle or any other element. The use of vehicles is an integral part of most security businesses, and yet another potential avenue for liability to flow. A further important duty is that owed as an occupier of premises. It’s clear that, although now clarified in statute, the scope of duties that may be breached is as wide as ever.
Causing a person’s death
There must be an unbroken link between management failure and the death of the individual. There’s no requirement for management failure to be the sole cause of death, but it must make more than a minimal contribution. In reality, this means that organisations may still be charged with corporate manslaughter where their actions are not the only cause of an individual’s death.
The scenario could develop whereby, for example, improper equipment provided for security officers may only be one factor in an officer’s death, but the fact that there are other contributory factors will not negate the potential liability of senior management under the new Act.
A breach of the Duty of Care owed by an organisation is a gross breach if the conduct under scrutiny falls far below what can reasonably be expected of the organisation given the circumstances in question. Whether there has been a gross breach is a question to be decided by a Jury, not the Judge.
The Act sets out what the Jury must consider in arriving at such a decision. The Jury must consider whether it’s clear from the evidence presented that a particular organisation failed to comply with any Health and Safety legislation relating to the breach. If there was a failure to comply then the Jury must consider how serious the failure was (and how much of a risk of death it actually posed).
However, in making this decision the Jury can also consider other factors more relevant to the organisation accused of the offence. This will be important in the security sector given the unique nature of the work that may be involved. In particular, the Jury can consider any evidence which shows that there were attitudes, policies, systems or accepted practices within the organisation that were likely to have encouraged a failure to comply with Health and Safety legislation, or to have produced tolerance of such failures.
For instance, it would be relevant if it were known to senior management that security personnel didn’t wear protective clothing during hot weather as it was deemed uncomfortable.
Health and Safety in order
The potential for an investigation into the working practices of a given organisation is a compelling reason why businesses should ensure that their Health and Safety procedures are in order. There’s also a strong argument for more management intervention in the everyday tasks undertaken by employees.
It’s understandable that many employees involved in the security sector will not be closely monitored by senior management as many of them conduct their tasks away from any centralised base. However, to prevent bad practices or the neglect of Health and Safety rules from arising, it’s important that senior management make themselves aware of what their employees are doing (perhaps through audits or spot checks). In this way, they can ensure that Best Practice is followed and, therefore, that their own liability under the new Act is limited.
The Jury may also consider any Health and Safety guidance relating to the breach. This guidance is likely to be industry-specific. Again, it’s recommended that any such guidance is closely followed by those organisations wishing to avoid falling foul of the Act.
Carefully following Health and Safety guidance and maintaining strict practices in relation to Health and Safety may not guarantee that an organisation would avoid being found guilty of a gross breach of Duty of Care. However, these practices would certainly ensure that any organisation is viewed in a good light should it come under the scrutiny of a Jury.
What will the Act cost?
Some might say that if your business is already operating within the law under the current Health and Safety legislation then the Corporate Manslaughter and Corporate Homicide Act 2007 shouldn’t cost you anything. That said, how many businesses can honestly state - and be absolutely sure - that their safety management systems (and the implementation of them from board level down to the shop floor) are completely compliant with current legislation? Probably not too many, at least if they’re being honest with themselves.
A realistic and much wiser approach would be for organisations to prepare themselves for the new legislation by undertaking a complete and thorough review of their safety management systems, and of how they are practically implemented, by way of ensuring that their business will meet its Health and Safety obligations. This will necessarily incur costs, but these costs are likely to be a fraction of any potential penalty if found guilty of corporate manslaughter.
“The new Corporate Manslaughter and Corporate Homicide Act 2007 comes into force on 6 April 2008. However, businesses must ensure that, before this date, they’re satisfied that their Health and Safety management systems will stand up to the inevitable scrutiny of the new legislation if the worst should happen.”
Actions that need to be taken
Reviewing a business’ Health and Safety management systems against current industry standards and guidance will identify whether there’s anything more to be done. It would be prudent to consider where your business’ particular risk areas are to ensure that sufficient attention is paid to eliminating or minimising those risks properly and effectively.
Very often, businesses don’t have the expertise or resource in house to conduct their own review. In such cases, it would be advisable to instruct appropriately qualified consultants experienced in their area of business to carry out the review, deliver their findings and advise on implementation of their recommendations.
Organisations would be prudent to ensure they’re fully prepared should an incident or event occur that leads to an investigation. This may include organising round-the-clock access to legal support should the need to seek immediate advice arise.
There’s no exemption whatsoever for smaller businesses. If your business is incorporated or a partnership, or a Trade Union or employers’ association - that is, an employer - you too will be caught by the Act. If your business doesn’t fall among any of the above remember that individual liability for gross negligence manslaughter under the common law will still attach to those within the business.
In fact, as is the position under the existing common law in relation to corporate manslaughter (which will not apply to relevant organisations when the Act comes into force), smaller businesses may be at a higher risk of prosecution because there’s a shorter chain of command, senior managers are more readily identifiable and those senior managers tend to have wider remits (and, therefore, a greater degree of control over their area of the organisation).
Is doing nothing an option?
Doing nothing is simply not an option. Remember, while the new Act doesn’t provide for individuals to be prosecuted, the existing common law provisions relating to individual manslaughter will remain in force. Where the prosecuting authority believes that there are individuals at fault, they are likely to be prosecuted with the corporate defendant. Individuals can be imprisoned if they are found guilty of individual manslaughter.
Prosecutions in England can only take place with the consent of the Director of Public Prosecutions. The police service is responsible for conducting the investigation and will work with the relevant enforcement authorities. If a charge can be issued, then the Crown Prosecution Service will prosecute organisations in England.
Of course, companies cannot be sent to prison so the penalty usually imposed is a financial one. However, sentencing in Health and Safety cases has always been a problem with which the Courts have wrestled. Under the Act, as in serious Health and Safety cases, the level of fine is unlimited. As a result, the Sentencing Guidelines Council - the organisation responsible for providing the Courts with sentencing guidance -has suggested that, on conviction for an offence of corporate manslaughter, as a starting point the Court should impose a fine equal to 5% of the organisation’s annual turnover (with the ability to go up to 10% or more if there are any aggravating factors). For most organisations, this would represent a substantial fine indeed.
In addition to a fine, the Courts may compel the organisation to ‘advertise’ their conviction in the local or national press on the basis that a ‘name and shame’ culture may send a message to other businesses. The ‘advertisement’ must include the fact that the organisation has been convicted, the particulars of the offence, the amount of any fine imposed and the terms of any remedial order made.
Stigma attached to convictions
It is all-too-easy to underestimate the potential damage to reputation which will inevitably result from one or more fatalities and the related Health and Safety offences, let alone the stigma attached to convictions for corporate manslaughter. The damage that could be caused by such an advertisement will be particularly prevalent in the security sector, given the great amount of trust that clients need to put in those they employ.
Further, where a Court is also of the opinion that the organisation still hasn’t remedied their deficiencies (although it’s likely the Health and Safety Executive would have dealt with any perceived deficiencies much earlier), the Court can also issue a remediation order forcing the company to remedy the breach, any matter resulting from the breach [-] and relating to the cause of death [-] or any deficiency of which the breach is an indication.
Obviously, this will involve time and expense in ensuring that the changes are effected, and may take away the organisation’s freedom to choose for itself how best to remedy any failures highlighted.
For both the remediation order and the order requiring publicity of the conviction highlighted above, the Court will specify a period within which the relevant activities must be implemented, and may also order that evidence be provided to show that the tasks have been carried out. Any organisation failing to comply with an order is liable to a fine on conviction.
There’s also the possibility that, in the same proceedings, a charge of corporate manslaughter and a Health and Safety offence may arise out of some or all of the same circumstances. In such a case, the Jury may be invited to return a verdict on each charge, meaning that the organisation involved would face liability not once but twice.
Postscript : Stuart Ponting and Poppy Williams are solicitors in the Litigation and Regulatory Group of law firm DLA Piper LLP