The passing of the Corporate Manslaughter and Corporate Homicide Act 2007 – which introduces a statutory offence of “corporate manslaughter” (called corporate homicide in Scotland) – follows many years of promises by governments to reform the law of corporate manslaughter. It is important to emphasise that the Act is an offencecreating statute rather than a duty-setting one. The Act itself imposes no new health and safety obligations.
The new Act comes into force on 6 April 2008. Until now, there has only been a common law offence of corporate manslaughter. For a company to be convicted of that offence, two things must happen: an individual person has to be found guilty of gross negligence manslaughter, and they must be so senior within the company that they represent its “directing mind”. This requirement is known as the identification principle.
The new offence
The Act is designed to make it easier to prosecute organisations where their gross negligence leads to death. As outlined above, under the outgoing law, a corporate body can only be prosecuted according to the identification principle. While efforts have been made to prosecute big companies under the outgoing law, all these attempts have failed.
The Corporate Manslaughter and Corporate Homicide Act abolishes the common law offence and replaces it with a statutory offence, creating a new framework for finding an organisation guilty of corporate manslaughter.
The wording of the offence is that an organisation will be guilty of an offence if the way in which its activities are managed or organised:
- causes a person’s death; and
- 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.
Organisations. Whereas the outgoing common law offence only applies to corporate bodies (which include NHS trusts and local authorities), the new offence will apply to a much wider group of organisations, including corporations, specified government departments, police forces and partnerships.
Senior management. “Senior management” is defined as the persons who play significant roles in:
- the making of decisions about how the whole or a substantial part of the organisation’s activities are to be managed or organised; or
- the actual managing or organising of the whole or a substantial part of those activities.
The inclusion in the definition of a person “actually managing or organising…a substantial part of those activities” is a major change. The definition is bound to catch a lower layer of management that, under the outgoing law, would not be classified as representing the directing mind. The other key point about the definition of “senior management” is that the new offence allows the prosecutor to aggregate the failures of a number of senior managers, rather than relying on the conduct of one single “directing mind”, as required by the identification principle.
These two points are the key changes from the old law and will undoubtedly increase the potential for the new offence to be investigated when it comes to medium-sized and bigger companies.
Gross breach. Under the new Act, there must be a gross breach of the duty of care. The requirement for a breach to be gross is a positive one, as it provides a jury with a reminder that the offence is reserved only for the most serious cases. Under the current law, “gross” is defined as requiring some form of wilful or bad conduct, rather than just making mistakes.
Penalties. The main sanction for a conviction of corporate manslaughter will be a potentially unlimited fine in the Crown Court, although perhaps the worst sanction that will apply is the stigma and reputational impact of being branded a “corporate killer”. There will also be the potential for remedial and publicity orders.
It is likely that fines for conviction will be set at a very high level. A recent paper has suggested that fines for big companies could be many hundreds of millions of pounds.
Who will investigate? The police will be the sole investigators. The HSE may well be asked to assist but it will not be a prosecuting authority for corporate manslaughter.
Individual liability. The Act imposes no new liability on individuals. The enforcing authorities can still prosecute senior managers and directors under existing laws, including individual gross negligence manslaughter or health and safety offences.
New guidance for health and safety leadership
In October last year, in advance of the Corporate Manslaughter and Corporate Homicide Act 2007 coming into force (see above), the Health and Safety Executive and the Institute of Directors published new guidance defining what private and public sector directors should do to lead and promote health and safety. This followed a lengthy period of research, debate and consultation.
The new guidance, entitled “Leading Health and Safety at Work”, comes against a backdrop of continued calls for stricter regulation of directors’ responsibilities when it comes to work-related safety. Workers’ organisations and groups representing victims have been particularly vociferous in asking for tougher rules. However, the guidance remains “voluntary” in nature.
It supersedes previous HSE guidance, published in 2001, and aims to clarify and further define directors’ duties. Research conducted on the HSE’s behalf between 2001 and 2005 concluded that, during that period, the percentage of organisations with directors with health and safety responsibility increased from 60 to 80. The research also concluded that the 2001 guidance played an important role in improving health and safety; there was an ever-increasing awareness of it; and it was seen as one of the main factors in organisations’ decisions on safety direction. The decision to revamp the 2001 guidance – rather than to press government for new or amended legislation to codify directors’ safety duties – can largely be put down to the perceived impact of the 2001 guidance.
At its heart, the new publication has what is described as “a four-point agenda for embedding the essential health and safety principles”. Under the headings of “Plan”, “Deliver”, “Monitor” and “Review”, these include core actions, good practice guidelines and case studies.
The core actions are formulated so that they tie in directly with organisation’s legal duties and, in effect, set a standard. Although the core actions (like the new guidance) do not have the force of law, they are likely to underpin important elements of the authorities’ investigation of industrial incidents where senior management is implicated. It is also probable that, when considering the liability of defendant organisations, juries hearing future prosecutions under the Corporate Manslaughter and Corporate Homicide Act will be directed to consider the new guidance and whether or not its principles have been met.
The new offence creates a completely new framework for the prosecution of corporate manslaughter. It also has the potential to increase significantly the criminal liability of companies for manslaughter in cases where there have been serious failures, since it will no longer be necessary to convict one individual alone. The aggregated failures of a number of senior managers, who form the senior management, will be sufficient.
In addition, the second part of the definition of senior management will catch people lower down the management chain than those regarded as the “directing mind” under the outgoing law. As a result, the prosecuting authorities will look at a much bigger slice of the workforce when considering whether the offence has been committed. Having said that, the new offence has a number of safeguards that are designed to restrict its use to cover the worst cases only.
It seems likely, however, that more investigations and prosecutions for corporate manslaughter will result than under the outgoing law, where it has been rare. Although there may not be a flood of cases, one can envisage that some of the more serious incidents that may once have been subject to investigations only under the health and safety at work legislation will now be subject to police investigation. This will affect both organisations under investigation and insurers, who may be required to fund defence costs where relevant policies respond.