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Corporate Manslaughter Act: what it means for you

17:41, 17 February 2010

updated: 17:41, 17 February 2010

Louise Worton of Vertex
Louise Worton of Vertex

Louise Worton from the Dispute Resolution Team of Kings Hill-based solicitors Vertex Law examines the implications of the Corporate Manslaughter Act.

Many work-related fatalities which occurred after the Act came into force last year are under investigation and the Crown Prosecution Services estimates that as many as 13 cases under the Act may be brought each year.

In the past, organisations could only be convicted of manslaughter if a 'directing mind' at the top of the management tree was also personally liable. This was often difficult to prove as companies commonly delegate responsibility for safety matters between more than one director and manager.

The new Act is intended to make it easier to secure convictions against organisations where the way in which its activities are managed or organised by senior management causes a person's death.

The death must be the result of a gross breach of a relevant duty of care owed by the organisation to the deceased and the way in which senior management managed or organised the organisation's activities must be a substantial element of that breach. Duties of care owed by the organisation to individuals will usually arise in a health and safety context, although could arise in other ways, e.g. under environmental law requirements.

There must also be shown to be a "gross breach" of this duty of care. This means conduct which falls far below what can reasonably be expected of the organisation in the circumstances.

Responsibilities

Organisations are now judged on the way that their activities are organised and managed as a whole, so the scope for falling foul of the new legislation is much broader. The responsibilities on mid-level managers are much greater as their actions have the potential to result in a prosecution against the organisation, and individuals continue to be liable under the common law offence of manslaughter by gross negligence and existing health and safety legislation. The company can also still be prosecuted for any breaches of health and safety or other laws.

As the Act is still in its infancy it is not known how the courts will interpret its provisions. It is likely to be the subject of judicial clarification. How and to what extent parent companies will be liable for the actions of their subsidiaries might also be a topic for future judicial pronouncement. It is anticipated that they will only be liable if their own management failures were a cause of death.
Organisations found guilty of corporate manslaughter face an unlimited fine.

The Sentencing Guidelines Council (SGC) has produced guidelines which are subject to a period of consultation. These suggest there will inevitably be a range of fines because of the range of seriousness of offences and the differences in the circumstances of the defendants.

Fines are to be punitive and of a size to have a significant impact on the guilty defendant and various aggravating and mitigating factors will be taken into account. The SGC suggests that the appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds.

The court may also order the organisation to remedy the management failure that caused the death or to publicise the conviction. Failure to comply with either order is a criminal offence punishable by an unlimited fine.
Companies may also face civil penalties in the form of compensation payable to the victim's family.
What can you do to protect your organisation?
Key steps that organisations can take to reduce the risk of prosecution under the Act include:

  • Ensure that health and safety leadership within your organisation meets the appropriate standards required by law.
  • Consider whether safety management systems have been successful and whether improvements can be made.
  • Consider carrying out an independent audit of health and safety management systems and health and safety compliance.
  • Develop an incident response plan. Be prepared to initiate an immediate internal investigation following an incident and to ensure that documentary and physical evidence is preserved.
  • Review the organisation's liability insurance to ensure that if a prosecution is brought, the legal costs incurred will be met.
  • Consider ways to strengthen the health and safety culture within the organisation, so everyone takes responsibility for improving health and safety.

For advice contact Louise Worton at Vertex Law on 01732 224000.

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