This Act received Royal Assent in July 2007. No date for implementation has been confirmed, but the latest indications are that it will be in April 2008.
The purpose of the Act is to provide a more accessible route for the successful prosecution and conviction of corporate bodies (but it also applies to partnerships, trade unions, employers’ associations, government and Crown bodies and the police force) for manslaughter. An organisation will be guilty of corporate manslaughter if the way in which its activities are managed and organised causes a person’s death, where there has been a gross breach of a duty of care owed by the organisation to the deceased. This statutory offence replaces the common law offence of manslaughter by gross negligence and turns attention to the management and organisational failings of the company.
Directors should note that the Act established corporate liability by considering the way in which the activities of the company are managed or organised by its senior management and whether this amounts to a substantial breach of a relevant duty of care. Liability is likely to be established collectively through cumulative conduct rather than attributed to an individual. The Act defines ‘senior management’ as persons with a significant role in the decision-making relating to how the whole or a substantial part of the company’s activities are managed or organised or who have a significant role in the actual managing or organising of all or a substantial part of those activities. Liability can only be found where there has been a gross breach of a duty of care which must be related to the organisation’s specific corporate functions or activities, for example, as employer, occupier of premises, supplier of goods or services, the construction or maintenance of buildings or vehicles or any other commercial activity. Gross negligence is defined as conduct that falls far below a reasonable standard, which may be hard to determine in any case.
Factors such as the company’s record of compliance with existing health and safety legislation will be relevant.
The penalty for any company convicted of corporate manslaughter is an unlimited fine. In some circumstances the court may also order the company to remedy the failings that led to the breach of duty within a specified period, failure to do so being a separate offence, but there is no personal liability on directors.