MH Article
Companies facing corporate manslaughter charges – are you prepared?
Health and safety performance is increasingly seen as an indicator of an organisation’s culture and corporate governance
Introduced in response to the “large scale disasters where a catalogue of health and safety failings lead to a loss of life”, the Corporate Manslaughter Act and Corporate Homicide Act came into effect in April last year. These highly publicised disasters were catastrophic events such as the capsize of the Herald of Free Enterprise, the Kings Cross fire and Paddington rail crash.
Some have even suggested that the failure to put in place proper procedures in the workplace to prevent or minimise flu pandemics might lead to criminal prosecutions, as companies may be liable for risks that they ought to have reasonably anticipated.
Certainly, it will now be easier to prosecute companies than it was under the old legislation, which was considered ineffectual.
What does the Act do?
The new law affects the liability of a company, not individuals. It sets out a new offence for convicting an organisation where a gross failure in the management of health and Safety leads to an individual’s death. To secure a conviction, it will be necessary to demonstrate that the failure was substantially the fault of those at a senior level. These will be people who play a significant role in the decision-making process around how the company’s activities are managed and organised, or who actually manage the whole or a substantial part of the organisation’s activities. They will include centralised headquarter functions as well as those in operational management roles.
Above all, these individuals need to establish and maintain confidence in the conduct of the company through the supervision of management, participation in the direction of the company’s business and affairs, and voicing opinions firmly and objectively on issues that come before the Board. They should be independent in judgement and build recognition among Executive Directors in order to promote a climate of transparency and trust.
Who does it affect?
All companies and corporate bodies operating in the UK in the private, public and third sectors will be affected. It also applies to partnerships, trade unions and employee’s associations and government departments.
It is important to remember that while the Act is for organisations only, it does not change the existing liability placed on individuals. Individuals can already be prosecuted for gross negligence manslaughter for health and safety offences.
What precautions should be taken as a business?
In deciding whether conduct falls far below reasonable expectations a jury may consider the extent to which a company was encouraging and implementing a safe working environment.
Thus to make sure that an organisation does not fall below these expectations it should:
- Make health and safety issues a priority, and review all management systems and practices that impact on this.
- Ensure senior managers are aware of this recent legislation, and with any Health and Safety Executive and government guidance.
- Keep evidence demonstrating that policies and practices are regularly reviewed, updated and enforced.
- Perform risk assessments identifying any potential hazards and addressing them with appropriate procedures.
- Make certain that all equipment is well maintained and employees are trained to use any equipment.
- Not overlook employees working remotely or away from the office: for example, for those who use a car for business, there must be policies in place to check that the vehicles are well maintained, insured for business use and have valid MOT certificates.
- Place an obligation on employees to notify the company if they are exposed to any risk of contagion, and have clear procedures in place to deal with this situation.
The offence cannot be avoided by senior managers delegating responsibility for health and safety, as the Ministry of Justice states that failures through “inappropriate delegation of health and safety matters” will leave organisations vulnerable to corporate manslaughter charges.
What are the penalties for not taking action?
These are severe and can be damaging , both financially and in terms of reputation. They include:
- Unlimited fines,
- Remedial order forcing company to change culture and practise.
- Publicity order, detailing the conviction and fine.
So, as you can see, companies should take this opportunity to think again about how these risks should be identified and managed – doing nothing should not be an option!
Lance Feaver, MH Corporate
EP magazine
30/09/2009