updated on 22 April 2008
QuestionWill the Corporate Manslaughter Act 2007 make the workplace safer?
Under the previous law, before a company could be convicted of manslaughter, a 'directing mind' of the company (ie, a senior individual who could be said to embody the company in his or her actions and decisions) must have been shown to have been guilty of the offence. Because of the inherent difficulty in identifying one person alone as having been grossly negligent, companies often escaped prosecution.
This resulted in an anomaly whereby smaller companies were more likely to be convicted for corporate manslaughter because their management structures were smaller and simpler, and thus it was easier to identify an individual to blame.
The new act applies to organisations (large and small) and includes companies, partnerships and certain public bodies (including the police, local authorities and HM Revenue & Customs).
An organisation will have committed the new offence if:
The breach of duty must be gross, meaning that the conduct resulting in the breach of the duty fell far below what can reasonably be expected of the organisation in the circumstances. Ultimately, deciding what constitutes gross will be up to a jury.
There is no individual liability in respect of the new offence. The purpose of the act is to punish an organisation where the senior management team has breached a duty of care and to ensure it takes responsibility for its decisions. A 'senior management team' is defined as comprising people who play a significant role in the management of the whole or a substantial part of an organisation’s activities. This is likely to cover not only directors and board members but also senior health and safety executives.
The new offence is punishable not by a prison sentence (because it is not directed at individuals but organisations), but by unlimited fines. The Sentencing Advisory Panel has suggested fines of up to 10% of a company’s annual turnover during the previous three years. For larger organisations this could result in extremely substantial fines. Linking fines to turnover could be devastating to smaller organisations and put them out of business.
The courts also have the power to make an order requiring that the organisation take specified steps to remedy the breach. Interestingly, the court can also order a convicted organisation to (i) publicise details of the conviction and the level of the fine in both regional and national newspapers, and on its own website, and (ii) notify its customers, shareholders and suppliers.
There is no doubt that the act is a significant improvement on earlier legislation, clearly making it easier to convict culpable organisations. Although the act itself will not make the workplace safer, it does serve as a warning to organisations to ensure that proper health and safety measures are in place. The possibility of high fines and the bad public relations a conviction could cause should result in senior management taking an active interest in, and improving, the safety policies it has in place.
Sophie Clarke is a solicitor in the employment team at EMW Picton Howell LLP.