The Corporate Manslaughter and Corporate Homicide Act 2007

27 February 2008

Of the many new beginnings in 2008, it is widely predicted that we will see a greater number of investigations and prosecutions resulting in charges of corporate manslaughter. This is because on 6 April 2008, the Corporate Manslaughter and Corporate Homicide Act 2007 should be implemented. The Act is designed to make it more straightforward for prosecutors to bring prosecutions against companies whose employees are involved in fatal accidents.

Official guidance on the much debated Act was published late last year. This guidance addresses some specific questions which have been raised about the detail of how the Act will operate. The guidance makes clear the scope of the Act, for instance how it may apply to partnerships, Government bodies and foreign companies. It clarifies the scope of exemptions from prosecution under the Act and gives some indication as to the likely approach the courts will take when sentencing this new offence.

Impetus for the creation of the Act stemmed from major accidents such as the 1997 Southall rail crash, and the 1999 Paddington disaster, in which 31 people were killed in a train collision. Following these accidents, it became clear that the existing laws enabling prosecutions against companies for manslaughter were too weak. The previous laws required a link between the deaths and the gross negligence of an individual who was said to be the embodiment of the company. In large companies, this was difficult to prove.

The new Act addresses this problem by instead focusing on the corporate culture of senior management as a whole. A company will be guilty of the offence if it can be shown that the way in which the company manages or organises its activities amounts to a gross breach of a duty of care to the deceased. Thus, the way in which senior management organises its activities assumes particular significance.

Relevant duties include duties owed by a company under legislation or the common law to its employees, as an occupier of premises, as the keeper of any plant or vehicle, and generally any duties owed as a business which carries on any activity on a commercial basis.

There are also definitions of what constitutes "senior management" for the purposes of the Act, and what will be a "gross" breach. In determining the latter question, a jury is entitled to consider whether the evidence shows that a company has failed to comply with relevant Health and Safety legislation, and to consider whether there were accepted practices or attitudes in place within the organisation that were likely to have tolerated such a breach.

Some have suggested that the importance placed on senior management's activities raises a risk that some companies may seek to delegate health and safety responsibilities to more junior managers, so as to attempt to escape liability under the Act. However, the new guidance makes it clear that this approach would leave organisations vulnerable to prosecution.

Although, the good news is that Company Directors will no longer risk personal liability for corporate manslaughter, the Health and Safety at Work Etc Act 1974 will continue to operate and this includes a specific basis of prosecution for individuals who can be shown to have been in breach of their duties under Health and Safety legislation.

In preparation for implementation, companies should review their management structure and the way activities are managed or organised so as to ensure that Health and Safety policies are in place, being properly implemented and are workable. Companies may also want to review their insurance cover to ensure that it extends to cover any prosecutions under this Act. The range of penalties which may be imposed include an unlimited fine, plus an order requiring the company to remedy the identified breaches, plus significantly, an order to publicise the conviction.

Recent sentencing guidelines are suggesting that penalties may be treated in a new way and could be based on up to 10% of average annual turnover.

The Government expects approximately 10-13 prosecutions for corporate manslaughter to be brought nationally each year. This might not seem like a large amount, but this will not matter if your company is one of the first to be prosecuted.

For more information or advice, please contact Fiona Carter or Oliver Sweeney.

The content of this bulletin is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.