The Corporate Manslaughter and Corporate Homicide Act comes into force on Sunday. Best to know what it entails now
On average more than one person a week died in construction-related accidents last year. The Corporate Manslaughter and Corporate Homicide Act 2007 aims to reduce the number by putting the onus on organisations to put in place appropriate systems and procedures. It comes into force on Sunday.
In the past it has been extremely difficult to bring a successful prosecution for “corporate manslaughter” because of the need to show that at least one person was responsible (the “controlling mind” of the organisation). This is about to change.
Under the act an organisation (which includes UK or foreign corporations, police forces or partnerships) will be guilty of the offence of corporate manslaughter (corporate homicide in Scotland) if the way in which its activities are organised and managed causes a person’s death and amounts to a gross breach of a relevant duty of care owed by that organisation to the deceased. The organisation will be guilty if the way in which its activities are managed or organised by its senior management (that is, those who make significant decisions about the organisation) is a substantial element of the gross breach.
It is important to note that the offence under the act can only be committed by an organisation and not by an individual. Individuals will not be able to get off scot-free, however, as they can still be prosecuted for manslaughter and for various health and safety offences. In fact, because the offence will no longer be investigated by the Health and Safety Executive but by the police, just like any other crime, their investigations into an alleged offence by an organisation may well uncover evidence of individual offences, leading to an increase in prosecutions of individuals.
The act does not create any fresh duties. The duty of care already exists in negligence.
All the act is doing is creating a new offence based on the pre-existing duty.
So what is the difference between the new and the old law? In the past 20-odd years there have been precious few prosecutions for “corporate manslaughter” and even fewer convictions. The controlling mind principle under the old law meant that it was, effectively, only small organisations that were successfully prosecuted since in large organisations there is rarely a single controlling mind.
The guilty firm will be liable to an unlimited fine and be forced to publicise the details of its conviction
Countless attempts at bringing prosecutions against large organisations as a result of events such as Zeebrugge and the Hatfield rail crash, to name but two, ended in failure, with the judge in each case reiterating the need for the law to be reformed.
So this is where we are. The idea is that it will be easier to convict organisations. But what is the penalty? A guilty organisation will be liable to an unlimited fine and, as soon as the government gets its act together, the courts will be able to impose publicity orders that will force the guilty organisation to publicise details of its conviction and fine. Publicity orders are likely to come into force in the autumn.
The court can also impose remedial orders that force the company to take steps to address and resolve the organisational and management errors behind the death.
The sentencing advisory panel has produced a consultation paper on sentencing for the new offence. The panel’s provisional starting point for a first-time offender is a fine amounting to 5% of the organisation’s average annual turnover during the three years prior to sentencing. If there are mitigating factors (for example, the organisation has a good safety record or it co-operates readily with the authorities), the fine may be reduced to 2.5%. For aggravating factors (for example, where more than one person is killed or where it has been established that there was a financial or other inappropriate motive), the fine can increase to 10% of average annual turnover.
The threat of a profit wipe out or worse in the event of a conviction for corporate manslaughter should be enough to encourage a comprehensive review of internal management and organisational procedures. Don’t wait until the boys in blue turn up at your door.
Joe Griffiths is a partner at Manches