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by Daniel Mcshee
20 March 2008
The Corporate Manslaughter and Corporate Homicide Act 2007 comes into force on 6 April. It is designed to make it easier to prosecute organisations where their gross negligence leads to death.
The new act replaces the common law offence with a statutory offence at section 1, creating a completely new framework for finding an organisation guilty of Corporate Manslaughter.
An organisation will be guilty if the way in which its activities are managed or organised: a) causes a person's death, and b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.
An organisation is only guilty if the way in which its activities are managed or organised by its senior management is a substantial element in the breach.
'Senior management' is defined in section 1(4)(c) as the persons who play significant roles in:
(i) the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or
(ii) the actual managing or organising of the whole or a substantial part of those activities.
Clearly there will be some people, eg, Board members, who will be involved in substantial parts (and arguably the whole) of the company's decision-making process and fulfil the test in 1(4)(c) (i) above.
Under the current law those individuals would be identified as representing the directing mind, and there does not appear to be any change for people at that level.
However, the definition in section 1(4) (c) (ii) of a person "actually managing or organising a substantial part of those activities" is a major change. The definition includes two strands: the taking of decisions and actually managing those activities.
Duty of care
Section 2 deals with the meaning of the "relevant duty of care". The new offence only applies where an organisation owes a duty of care to the victim, as in the old law. Section 2(1) requires the duty of care to arise out of specific functions or activities. The offence will only apply where an organisation owes a duty of care:
to its employees or other persons working for the organisation
as an occupier of premises
when the organisation is supplying goods or services
when constructing or maintaining buildings, infrastructure or vehicles etc, or when using plant or vehicles etc, and
when carrying out other activities on a commercial basis.
The duty owed to employees includes "other persons working for the organisation or performing services for it". Excluded are public policy decisions made by a public authority.
Section 8 of the new act requires there to have been a gross breach of the duty of care. The requirement is a positive one as it reminds a jury that the offence is for the most serious cases.
Its inclusion was criticised by Unions and Pressure Groups as being too restrictive whereas employers considered it important to emphasise only the worst management failures.
The sanction for a conviction of Corporate Manslaughter will be a potentially unlimited fine in the Crown Court (section 1(6)), although perhaps the worst sanction is the stigma of being a 'corporate killer'.
Fines for offences under the Health and Safety at Work Act 1974 (HSWA) have generally been increasing, particularly for major disasters, eg, under Transco, Balfour Beatty Rail Maintenance and Network Rail.
The level of fine for Corporate Manslaughter should reflect the gravity of the offence and the means of the offender. If a company is part of a wider group, the group's financial standing is of potential relevance.
Section 9 of the new act gives a court the power to make a remedial order requiring a defendant to take action to put right health and safety breaches.
An order can only be made "on an application by the prosecution specifying the terms of the proposed order". The order must be on such terms as the court considers appropriate following representations made and evidence from the prosecution or the accused. Breach of a remedial order is an indictable offence carrying a potentially unlimited fine.
Section 10 of the act allows a court hearing a Corporate Manslaughter offence to make a publicity order requiring the organisation to publicise its conviction, details of the offence, the fine and any remedial order made.
This is an odd power to include since it does not identify how a convicted company should do this. Further, in today's society, dominated by 24-hour news bulletins, a large company would receive considerable publicity with or without this power.
Daniel McShee is a partner at Kennedys and author of 'Workplace Law's Guide to Corporate Manslaughter and Corporate Homicide'
FM QUICK FACTS
The new act makes it easier to prosecute organisations whose gross negligence leads to death
The level of fine for Corporate Manslaughter should reflect the gravity of the offence and the means of the offender
The act requires there to have been a 'gross' breach of the duty of care, targetting only the worst management failures