manslaughter: Can board members be prosecuted?

What are the liabilities of voluntary board members of registered social landlords in the event of big financial losses or, worse, a fatal accident? After all, they're performing a public service. We listen in as the nervous chief executive of a fictional housing association is calmed down by the senior partner of its law firm …

Chief executive: My board is getting very jumpy. Your lawyers have been telling them for years that their position is roughly the same as non-executive directors in the private sector: that they are not expected to attend every meeting; their duties between meetings are light; they are not expected to have additional skills and so on, so don't worry. Also, the Housing Corporation monitors the RSL and would take action if it found anything amiss. Then we get the West Hampstead case, followed by the rent increase ruckus, where some QCs thought board members were at risk of criminal liability, followed by other QCs saying "no, relax". Then there are the rail disasters, with the media demanding legislation on corporate manslaughter. We all know there are repairs problems out there. You must have thought of this; you're still on the board of the Inclusive Housing Group, aren't you?

Senior partner: Yes, because I see no need for panic or resignation. And no lawyer should advise a client to do something they are not prepared to do themselves.

I do not think the legislation has changed for voluntary board members regarding any financial loss sustained by the RSL.

The risks to RSLs may be increasing and reports to boards getting longer and more complex, but as they are not paid (unlike non-executives in the private sector), it is unlikely the law will expect greater involvement or expertise from them than before. That said, they ought to read the trade press – reading Housing Today will alert them to problems in this sector, and it is reasonable to expect professionally qualified board members to test the board's reports against that. But you wouldn't expect a tenant member whose expertise was knowing what went on on their estate to be as knowledgeable about the RSL as a board member who was a housing officer or accountant. Even so, professionals on the board are entitled to expect the Housing Corporation to do its job. It has, after all, draconian powers over RSLs.

CE: What about corporate manslaughter? Defective gas appliances, fire alarms and fire prevention, and poor maintenance? All of these can kill, and the media is crying out for blood. Are we at risk if a tower block catches fire or blows up?

SP: Let's get this into perspective.

Take manslaughter. To be convicted of that, there has to be a deliberate or reckless act – that is, knowing the potential dangers but letting the situation continue without caring for the consequences; like the man who stayed up all night talking to his lover, then got into his car and fell asleep at the wheel with tragic results. He must have known there was a high probability he would fall asleep, but he ignored the risk and others paid the price. That is different from, say, the failure of a gas appliance in an RSL flat which was checked six months before by a contractor, but gassed a family to death. If the RSL used a reputable contractor, monitored its performance against statutory requirements, and took steps to correct any apparent negligence, tragic as it is, I can't see the RSL being anywhere near a manslaughter charge.

The law has always recognised corporate manslaughter but, until now, to make an individual criminally liable it had to prove beyond reasonable doubt that they alone (or in conjunction with someone else) were the "controlling mind" of the company, which was extremely difficult to prove in large companies. There has been an example of a director being convicted, but that was for a "one-man" company.

The Law Commission wanted to introduce the concept of criminal mismanagement so that senior management, board or chief officers could be held collectively responsible for serious failings in management policies and systems; but there is no sign of the government bringing in any legislation to achieve that.

CE: Perhaps it sets a dangerous precedent for the government itself?

SP: Possibly, but even if it were brought in, there is still a difference in the way voluntary board members and paid members are treated. If the voluntary members were doing their best, recruiting good staff and adopting sector standard policies and systems, and they had no reason to question satisfactory board reports – or took action to rein in consultants if they did – I do not think they would be at risk.

CE: It is unlikely any RSL board or officer would ignore repairs or improvements they knew were necessary just in order to save money, unlike the private sector. So don't panic?

SP: No, but it is ironic that transfer associations (and ALMOs) are ensuring their board members are trained in financial assessment, risk management and so on, but a lot of the old RSLs ignore that, even in new group structure situations where members are recruited onto boards as independents. I think it would be good if every board member had one day's initial training and then a refresher every year. It is always better to try to avoid risk in the first place.