Fat-cat scapegoats

At the HSE’s Safety Summit next Thursday, delegates will no doubt be reminded that construction has failed to meet its own targets to reduce workplace deaths, injuries and ill-health, set after the original summit in February 2001. Yet the government has lagged even further behind. Despite repeated commitments in successive Queen’s speeches and manifesto pledges, there has been no new legislation.

Since 2000, there have been four private member’s bills seeking to bring in a corporate killing offence, or to increase health and safety penalties. These all failed to become law. A fifth private member’s bill has now been introduced by Stephen Hepburn MP, called the Health and Safety (Directors’ Duties) Bill.

It has received widespread backing and is scheduled for a second reading on 4 March. The bill seeks to amend the Companies Act 1985 by requiring all directors to take all reasonable steps to ensure the company complies with health and safety laws. In particular, large companies would have to nominate one of their directors as health and safety information director (HSID). The HSID will have to take all reasonable steps to inform the board about health and safety issues.

Under existing law, a director can be held criminally liable for the company’s health and safety breaches if committed with their consent or connivance or due to their neglect. The aim of the bill seems to be to remove from directors the excuse that they have not personally failed because they were not made aware of the particular safety issue. If enacted, the HSID might say in defence that they warned the board about a risk. The board would then have to refute this by blaming the HSID for not keeping them informed.

The provisions requiring the appointment of an HSID do not affect the directors of small and medium-sized companies. For years, lobby groups have called for a change to the law on corporate manslaughter, to allow large companies to be convicted and their directors jailed. To date only small, mostly family, firms have been convicted because of the nature of this offence, which first requires an individual to be convicted of gross negligence manslaughter and then the same individual to be identified as the directing mind and will of the firm. This is easier in small firms with “hands-on” directors.

In contrast, large companies have so far proved impossible to convict for corporate manslaughter, because companies’ directing minds are so distant from day-to-day activities and decisions that the court has difficulty linking their failings to the fatality.

Similar issues will arise in the current corporate manslaughter trial of Balfour Beatty following the Hatfield train crash. The prosecution has not managed to bring any board directors to trial (presumably because of their distance from the events) but have instead charged senior managers who were more closely involved. However, the corporate manslaughter charge will fail if the prosecution is unable to show that any of these managers were sufficiently senior to constitute the directing mind of the company.

Such a failure would renew pressure on the government to act. As there seems to be no real government desire for corporate killing legislation to become law, this bill may be thought to be the next best thing.

Union leaders believe statutory obligations on directors would help to convict directors with manslaughter and, in turn, convict companies with corporate manslaughter.

Although the bill has popular appeal, it leaves more inequalities than those it seeks to redress. For a start, it applies to non-fatal accidents, however minor. Second, it places greater obligations for safety on directors of larger companies (through the HSID post) than those of small and medium-sized companies where accident rates per employee are highest.

However, the government may be drawn into supporting this bill as a quick fix, since it would turn up the heat on private sector directors of large companies and deflect calls for corporate killing legislation, which would apply to its own departments and ministers. Perhaps it is not keen on seeing the defence secretary having to answer questions in the witness box about the lack of body armour for troops in Iraq.

If this bill does come into force, who would volunteer for the role of HSID? The job ad might read as follows: “Wanted, lightning conductor to take criminal responsibility for any fatal accident and act as conduit for the company to be blamed for corporate manslaughter. You will have the benefit of directors’ and officers’ insurance, although this will not assist with criminal fines or imprisonment.”

This article was co-written by Dr Simon Joyston-Bechal and Helen Grice at law firm Pinsent Masons. Email simon.joyston-bechal@pinsentmasons.com