Special section – corporate manslaughter legislation
The first prosecution based on the UK’s 2007 Corporate Manslaughter and Corporate Homicide Act has begun. Guy Bastable, Partner in Business Crime and Regulation at law firm BCL Burton Copeland, based in London, UK, explores the impact of the legislation on industry and the need to review procedures and take preventative steps.
The statutory offence of corporate manslaughter in the UK was created in 2007 against the backdrop of a number of high profile failed prosecutions of companies. The aim was to remedy the perceived failings of the common law offence of gross negligence manslaughter when applied to businesses.
The Corporate Manslaughter and Corporate Homicide Act removes the need to identify and establish the guilt of a directing mind, which the Government hopes will make a conviction more likely. Instead, it concentrates on the way in which the organisation’s activities were managed or organised to determine if this caused a person’s death and amounted to a gross breach of a relevant duty of care owed by the firm to the deceased.
The Act applies to all corporations, except for corporations sole (single incorporated offices), whether incorporated in the UK or abroad, and to certain other specified organisations. As far as jurisdiction is concerned, the crucial element is that the harm which resulted in the death must have been sustained within the UK (a concept that has an extended meaning under the Act). It does not matter whether the death, the breach of the relevant duty, or the management failure occurred outside the defined territory, so long as the harm occurred within it.
An organisation convicted of the offence is liable to an unlimited fine. The Sentencing Advisory Panel advocates a fine of 2.5-10% of average annual turnover.
The Court may also impose a remedial order that requires the organisation to address its failures and a publicity order to publicise the conviction, details of the offence, the amount of the fine and the terms of any remedial order.
A publicity order could lead to a significant loss of business and corresponding financial instability, but an organisation that fails to comply commits a further criminal offence and is liable to a separate unlimited fine.
So how does this fit in with the new Health and Safety (Offences) Act 2008? An investigation following a fatal accident will be undertaken with a view to prosecute the organisation for corporate manslaughter and/or a breach of health and safety legislation, as well as to prosecute individuals (including directors and senior managers) for gross negligence manslaughter and/or a health and safety breach (including secondary liability).
Following the recent Health and Safety (Offences) Act 2008, for the first time, most health and safety offences are imprisonable, rather than only punishable by a fine, and the maximum fine in the Magistrates’ Court has been increased significantly for certain breaches. The risk of imprisonment for individuals is now far greater, as is the risk of police arrest.
Investigation and prosecution
An April 2009, the Crown Prosecution Service (CPS) launched the first case of corporate manslaughter against Cotswold Geotechnical Holdings in Birdlip, UK. The firm was also charged with health and safety breaches, and the Director charged with gross negligence manslaughter and secondary liability for health and safety breaches. The prosecution shows that the CPS is willing to deploy the full arsenal of applicable criminal offences following a fatal accident. More than ever before, the risks associated with an investigation following a fatal accident are significant.
Ten basic preventative steps
• Obtain expert advice on the scope of the new law and the applicable existing law, and consider their impact on the organisation’s activities.
• Obtain and consider all health and safety guidance that is relevant to the firm, including sector-specific guidance issued by UK’s Health and Safety Executive.
• Review the management structure and identify those at risk of personal criminal liability.
• Ensure that all health and safety personnel (and all those involved in managing it) are competent and familiar with the new law, including providing training.
• Ensure that all staff are familiar with how to deal with the immediate aftermath of a fatal accident, including liaising with the police and other authorities and managing the response to the investigation.
• Review the company’s expenditure on, and commitment to, health and safety.
• Ensure that all health and safety documentation, systems and procedures (policies, risk assessments, method statements, working practices, etc) are up to date, take account of change and are subject to regular review.
• Pay particular attention to high risk activities, maintenance, work-related driving and the management of contractors.
• Review the internal reporting system and disciplinary procedure for health and safety breaches, accidents and near misses.
• Review the organisation’s insurance cover to ensure provision of expert legal representation to the organisation and its employees in relation to criminal investigations and prosecutions. Verify that the insurance provides cover for the payment of costs incurred by the prosecution.
Further information: BCL. Also see www.justice.gov.uk/public ations/corporatemanslaughter2007.htm.