Corporate manslaughter is an emotive subject, one that has been getting its fair share of column inches over recent years. High-profile cases such as the failed attempt to prosecute Transco in 2004 for culpable homicide – the Scottish equivalent of manslaughter – following a gas explosion which killed a family of four, have grabbed the media’s attention.
And chilling figures from the Health and Safety Executive (HSE) have prompted further questions over whether current legislation is effective. The HSE reported that out of the 581 people killed at work last year, 70% of deaths were down to managers cutting corners.
With the Corporate Manslaughter and Corporate Homicide Bill introduced to Parliament in July this year, we have reached a new stage in the debate.
The aim of the Bill is to make it easier to make both public and private organisations liable for any deaths caused by gross negligence. The key change introduced is that instead of the prosecution having to find a ‘directing mind’ responsible for a death, a charge of corporate manslaughter can be made for gross negligence under a wider definition of ‘senior management’.
So could this new definition really make a difference? Martin Stafford, solicitor in the regulatory team at law firm Cobbett, remains sceptical and says that without further clarification, the new definition could lead to unfair prosecutions. “Although the term ‘senior management’ is clearer than the previous definition ‘directing mind’, the difficulty is that it will be easier to provide evidence against smaller firms which have a more concentrated management structure,” he says.
John Stevens, managing director of corporate health and safety consultants RiskFrisk, says that the definition needs clearer parameters because if the person at fault is considered to sit outside senior management, a prosecution under the Bill could not proceed. “There is confusion over who a senior manager is. The Bill says they need to be in charge of a substantial part of the business, but this could vary depending on the organisational structure,” he says.
If an organisation is charged with corporate manslaughter, it will cost them more than their reputation, as it is likely it will also be found in breach of the Health & Safety Act 1974 – both carry unlimited fines. But importantly, it is the organisation rather than individual managers that will be liable.
Sheila Gunn, head of employment at law firm Shepherd and Wedderburn, says unions will be disappointed as they have been campaigning for the Bill to include individual responsibility for corporate manslaughter. “Unions don’t feel that the rules provide enough punishment and want somebody to carry the blame. But the government has seriously resisted going down this route,” she says.
However, the Bill is still to be finalised and proposed amendments could change this position. “There are proposals for a secondary punishment, whereby a particular director also has to pay a personal fine. But there are no plans to impose a custodial sentence unless the Bill gets completely thrown out and overhauled,” says Gunn.
Extension in Scotland?
Although the current Bill is planned to be enforced UK-wide, there is a chance that the Scottish Executive could extend the legislation in Scotland so that individuals could be found guilty of ‘culpable homicide’ if they cause the death of another through gross negligence. This extension is proposed in a consultation paper, which was published in June this year by Karen Gillon MSP. The outcome of this will only be clear once full consultation has taken place.
However Jonathan Isted, partner at law firm Freshfields Bruckhaus Deringer, points out that although individuals will be unable to be convicted of manslaughter via the UK-wide bill, it means individual charges could still be brought. “Manslaughter will always be an individual offence under Common Law, so individuals may still be charged with causing someone’s death through gross negligence,” he says.
Individual charges aside, the biggest penalty could be the damage done to the reputation of an organisation if it is charged with corporate manslaughter. So what can employers do to ensure they stay on the right side of the law?
The government is predicting an additional 10-13 cases a year following the legislation. However because compliance with the Bill rests on organisations complying with the Health & Safety Act, firms should not need to do anything new.
Despite this, Stevens says many employers will need to sharpen their compliance procedures. “The government says there is ‘no new regulation’, on the basis that all organisations are currently fully compliant – meaning there will be no extra cost. However in our experience, a large number of organisations are not managing health and safety risks as they should be. We feel that organisations will wait for the Bill to be passed and then decide to improve.”
Stringent policies needed
According to Stevens, many employers will need more stringent health and safety policies for drivers. “There is an increased focus in the Bill on the duty of care to employees who drive as part of their work activities. Already, the police get involved and investigate the employee’s safety training and working hours. Organisations may feel relaxed about safety controls in their own premises, but not so about what happens on the road,” he warns.
Whether or not staff comply with health and safety rules can be influenced by the culture of the organisation. Employers therefore have to understand how business processes and commercial pressures can lead staff to do what they would not naturally do, but feel forced or encouraged to by the ‘system’.
“Organisations have to say to employees that if they are in any doubt about the safety of an action – don’t do it. But they also have to make sure they support that decision afterwards,” says Stevens.
In light of the proposed responsibility of ‘senior management’, Isted says now is a good time for employers to identify which employees could potentially fall under this definition.
However, Gunn remains cynical about whether the new Bill will do much to improve compliance. “There are many companies illegally employing workers on low wages. If they are not prepared to employ people legally, why would they worry about this latest legislation? The best we can hope for from the Bill is to raise health and safety in the minds of law-abiding companies and encourage them to get it right,” she says.