The bill on manslaughter and corporate homicide that is midway through its second reading in parliament must ensure that senior managers can be held personally to account
One need look no further than the most recent fatal accident statistics to understand why the Corporate Manslaughter and Corporate Homicide Bill should have generated heated debate during its second reading in the House of Commons.
The latest figures for fatal accidents to workers, those for 2004/05, show that construction accounted for 71 out of 220 deaths (with agriculture in second position at 42). This is broadly in line with the statistics for recent years. Between 1994 and 2004, the figure for construction has hovered between 47 and 73. The inherently dangerous nature of the construction process means that there are always going to be fatal accidents. But surely the numbers can be reduced?
It would be nice to think that things would improve by way of change within the industry and through sector-specific regulation. But I don’t think we will see real improvement until legislation is introduced that leads to tough criminal sanctions for individuals responsible for the organisation and management of health and safety where workers or others die as a result of gross negligence. That is, in my view, the benchmark against which the potential effectiveness of the bill should be assessed.
Cast your mind back to the Hatfield rail disaster five years ago. Four people were killed and 102 injured when the King’s Cross to Leeds train was derailed. Balfour Beatty, the firm responsible for track maintenance, was found guilty of gross negligence through the way in which its maintenance activities were organised and managed. Mr Justice Mackay described its performance as “one of the worst examples of sustained industrial negligence in a high-risk industry I have ever seen”. What happens? The company was fined just £10m, and that was reduced to £7.5m on appeal. Senior management from Balfour Beatty and Network Rail were cleared.
In my view the legislation won’t work, simply because it won’t guarantee that those responsible for health and safety policy, and management, are taken to task personally for the consequences of gross negligence through the imposition of substantial personal fines and, in extreme cases, imprisonment.
I don’t think we will see real improvement until egislation is introduced that leads to tough criminal sanctions
During the second reading Andrew Dismore, the Labour MP for Hendon, having noted that under the Companies Act 1989 a director could face prosecution for fraud, expressed astonishment that the same was not true of a director who was responsible for a fatality. Nevertheless, the government seems convinced that the answer lies in punishing the company rather than the individual.
The fact is that the law relating to corporate manslaughter has substantially failed to achieve its objectives. This has been recognised since at least 1997 when Jack Straw started the process of its reform. Under the legislation, there have been seven prosecutions and six of the companies involved were small. That disappointing record is largely a result of the prerequisite for a successful prosecution that the jury should be persuaded of the culpability of a “directing mind”, a single senior manager within the organisation, behind the activity that caused the death.
Under the proposed legislation this “identification” test, as it is known, is to be replaced by a much broader investigation into the way in which relevant activities have been managed or organised by senior management as a whole.
This might make the prosecution of companies somewhat easier in practice. However, it also seems to offer plenty of scope for companies, should they wish, to avoid the operation of the legislation. In the past that could be achieved by dividing up responsibility for health and safety so that there was no single “directing mind”. The same result could be achieved under the bill by delegating health and safety responsibility downwards out of the hands of senior management. This issue dominated most of the recent debate and, as a result, the home secretary has now promised a different test, which will take account of the overall management of the fatal activity at all levels of the organisation.
It remains to be seen whether this is going to make any difference.
Dominic Helps is a partner in Shadbolt & Co