Manslaughter

THE CORPORATE MANSLAUGHTER& CORPORATE HOMICIDE ACT 2007QBE ISSUES FORUM NOVEMBER 2007

THE ‘DON’T KILL’ BILL!THE CORPORATE MANSLAUGHTER& CORPORATE HOMICIDE ACT 2007

QBE believe that best practice organisations are those where senior individuals facilitate and engagein the robust management of health and safety. We pro-actively encourage our clients to set in placethe necessary organisational structure, systems and strategies to meet their moral, legal andfinancial obligations.

THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007

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The question of how to hold organisations to account after major disasters has been the subject of an ongoing debate formany years. The Zeebrugge ferry disaster, which led to the deaths of more than 150 passengers and nearly 40 crew, some 20years ago, brought the issue firmly into the public spotlight with the public enquiry identifying “a disease of sloppiness” andnegligence at every level of the company’s hierarchy. Despite an inquest jury returning verdicts of unlawful killing, there wereno convictions of individual or corporate manslaughter.

The present government has been planning for almost 10 years to introduce tough legislation to take organisations to taskwhen serious failings in health and safety lead to the death of an individual. The result is the Corporate Manslaughter &Corporate Homicide Act 2007, which received Royal Assent on 20 July 2007 and will come into full force on the 6th of April2008. This issues forum will explore the provisions and implications of the new Act, and look at the framework of measuressenior management should already have in place to ensure the effective health, safety and welfare of their employees,keeping them from under the spotlight of prosecution.

WHAT OFFENCE WILL IT CREATE?

The Act creates a new statutoryoffence in England, Wales andNorthern Ireland of “CorporateManslaughter”, and “CorporateHomicide” in Scotland. Corporatemanslaughter is a term used in EnglishLaw to reflect an act of homicidecommitted by a company as opposedto an individual. In a case following theZeebrugge ferry disaster, the court ofappeal confirmed in principle that acompany can commit manslaughter,albeit that all the individual defendantsin that case were acquitted.

An organisation will be guilty of theoffence of corporate manslaughterif the acts or omissions of seniormanagement cause a person’s death.The failing could be either a single orseries of errors, which directly lead to agross breach of the duty of care owedby the employer to the deceased.

WHAT IS THE CURRENT

POSITION?

The current law of corporatemanslaughter links an organisation’sguilt to the gross negligence of anindividual who is said to be theembodiment of the organisation. Ithas proved very difficult to prosecutelarge organisations. Since 1992, therehave been 34 prosecutions forcorporate manslaughter of which only 6have resulted in conviction. Notably,the only successful prosecutions haveinvolved small companies where theindividual in question was intimatelyinvolved in the health and safetyactivities.

A company may also be found guiltyof breaching the main provisions ofthe Health & Safety at Work Act etc1974 (HSWA) if it has failed to take allreasonably practicable steps to ensurethe health and safety of its employeesand those affected by its business.This duty of care obviously extendsto fatalities and can lead to unlimitedfines. The HSWA contains provisionsto find directors, officers and managerspersonally liable and potentiallysubject to imprisonment, where ahealth and safety offence has beencommitted by the company withtheir consent or connivance, or isattributable to their neglect.

WHY THE NEED FOR CHANGE?

With manslaughter charges andunlimited fines already a possibilityunder current health and safetylegislation, this is a valid question.The answer may partly lie in thecurrent social climate where individualresponsibility is increasingly seen tobe hidden behind the façade of largeorganisations, which themselves cannotbe taken appropriately to task. Finessolely levied against organisationsare not seen to be an appropriatepunishment for a fatality, where the


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individual is seen as an innocent party.This view has been heightened by themedia after similar cases to Zeebruggesuch as Piper Alpha, the Kings Cross fireand the Southall rail crash, whereattempts to prosecute these corporationsand their senior management under thelaw of gross negligence manslaughtercame under significant difficulty andultimately failed.

The difficulty with the existing law ofcorporate manslaughter is that it doesnot reflect the realities of the moderncorporate environment. Before acompany can be found guilty, anindividual who is a “controlling mind”of the organisation must first be foundpersonally guilty of the offence. It isthis “identification principle” that hasled to serious difficulties in prosecutingmedium to large organisations withdiffuse management/corporatestructures, and where health and safetyhas traditionally been delegated to alower tier of management and health& safety professionals rather than thecontrolling/directing mind. Under thepresent law, it is not possible to add upthe negligence of several individualsto show the company as being grosslynegligent. In reality it is always likely tobe the combined acts or omissions ofindividuals and/or processes, none ofwhich can individually be qualified asmanslaughter, which lead to a fatality.

It is telling that in recent times thecourts have awarded more significantfines for breaches of health and safetylegislation. It may well be that thesefines have been in response to thedifficulties of bringing corporatemanslaughter charges under thecurrent legal framework i.e. aperceived need to over-compensateto satisfy public demand.

WHAT DOES THE NEW ACT

ACTUALLY CHANGE?

For all the attention this piece oflegislation has received, it actuallybrings with it no new legal obligationsfor employers. What it does do is allowfor the accumulation of what mightbe a series of collective errors todemonstrate that the defendant wasdeficient in managing an effectivehealth and safety management system.The main focus of the Act is toestablish the grounds upon which anorganisation, rather than an individual,can be found guilty of the offence ofcorporate manslaughter. Moving awayfrom the need for an individual“controlling mind” to be identified,an organisation will be guilty of theoffence if the way in which its activitiesare managed or organised by seniormanagement amounts to a grossbreach of the duty of care owed toa person, and that breach results inthe person’s death. The prospect ofindividual liability under the Act isspecifically excluded.

The intention of the Act is not to letindividual directors off the hook butrather seeks to encourage managementto adopt an approach of collectivesenior management responsibilityfor issues of health and safety thatpermeates the organisation ratherthan being concentrated in a singledepartment or individual. All companydirectors and senior managers will nowbe required to take an active interestin these matters and to ensurethat health and safety is a primeconsideration in their business if theywish to avoid seeing their actions, oromissions, result in a court appearanceshould a fatal accident arise from a“gross breach” of their duty of carein this regard.

DUTY OF CARE

The key elements of the existingframework for corporate manslaughterare retained with the new Act i.e. theorganisation must have owed a dutyof care to the deceased, there musthave been a breach of that duty andthe breach must be “gross”. In caseswhere an employer is charged with thedeath of an employee, the existenceof a relevant duty of care will nearlyalways be straightforward. However,some scenarios could potentiallyinvolve a number of organisations withoverlapping duties e.g. constructionprojects. This could lead to cases withmultiple defendants. It is also possiblethat safety consultants and relatedexperts could be included amongdefendants if their advice or servicesare deemed deficient. Regulatorybodies such as the HSE are excluded(except for their own employees), andthere are special provisions limitingthe duty of care owed by theemergency services.

It should be noted that the duty ofcare is not just to employees but willalso apply to third parties arising fromoperations, including as occupier ofpremises, construction and maintenancework, supply of goods and services,use of vehicles and plant, and allcommercial activities. For example,in relation alleged fatalities causedby the supply of defective products,manufacturers and suppliers will berequired to demonstrate systems inplace for safety and quality checks onall supplied parts and ingredients aswell as the finished product. Productrecall procedures will be requiredwhere goods have been suppliedthat are potentially faulty.


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GRAVITY THRESHOLD FOR

BREACH OF DUTY

Breach of a duty of care is to beregarded as “gross” if the organisation’sconduct falls “far below what canreasonably be expected of theorganisation in the circumstances”.Given the potential for wideinterpretation of this standard, the Actprovides further guidance in applyingthe “gravity threshold”. Factors that ajury will be required to consider include:

• Whether the organisation failed tocomply with any relevant healthand safety legislation.

• If they did, how serious was thefailure and how much of a risk ofdeath did it pose?

• The extent of the organisation’scompliance with relevant healthand safety guidance.

• Whether the evidence shows thatthere were“…attitudes, policies, systemsor accepted practices within theorganisation that were likely toencourage any such failure or tohave produced tolerance of it.”

In addition to the guidelines here,employers would be well advised toconsider the sentencing factors used inprevious health and safety prosecutions.For example, in the case of R&F Howe& Son (Engineers) Ltd (1999) Mr JusticeScott Baker suggested that the moreserious aggravating features of aprosecution would include: puttingprofit before safety; failing to heedprevious warnings; deliberate orreckless breach of safety; and how farshort of an appropriate standard thedefendant fell.

PENALTIES

In addition to an unlimited fine, theAct introduces a power for the courtsto impose a remedial order on aconvicted organisation to force it toresolve any management failure thatmay have been a cause of death.

Arguably the most effective aspectof the act will be to reclassify conductalready an offence, under existinglegislation, with the more stigmatisingterm of corporate manslaughter(corporate homicide in Scotland). Ifthere was any doubt that a prosecutionunder the new law would not attractthe desired attention, the Act allowsfor “publicity orders”. This will allowthe courts to force convictedorganisations to publish details of theiroffence and penalties at their expense.


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IMPACT

In a regulatory impact assessment ofthe Bill, the Home Office estimated thatthe new Act will result in the number ofprosecutions for the offence ofCorporate Manslaughter rising from thecurrent one or two to around 10-13additional prosecutions a year. Thiswould represent prosecutions for 3-4%of work-related deaths. The cost ofprosecuting and defending theseactions will inevitably rise from currentlevels, given that the scope of theinvestigation required to identify the“management and organisation ofactivities” and the “attitudes, policies,systems or accepted practices withinthe organisation” seems likely torequire a great deal of time and effort,not to mention disruption to the dayto day working of the organisation inquestion, during the period ofinvestigation. It is also arguable that itwill be easier to find companies guiltyof the offence when the conviction ofa director, with direct responsibility forthe breach of duty, is no longer a pre-requisite to the conviction of the companyfor the offence of manslaughter. Fines arelikely to be set at a level at least equal tothose currently levied on organisationsfound guilty of breaches of the HSWAthat result in a fatality.

Perhaps of greater concern is thestigma likely to be attached to anorganisation found guilty of the newoffence, and the potentialconsequences for its reputation andbrand image. A key threat arising froma prosecution will be the harm that itmight have on the company’s brand,particularly in today’s climate wheresupplier chain integrity is of paramountimportance. Indeed, one canhypothesise that marketingdepartments may, for the first time,take an interest in their organisations’approach to health and safetymanagement!

IMPLICATIONS FOR SENIOR

MANAGEMENT

The new legislation serves to highlightand re-enforce the importance ofaddressing health and safety issuesat a high level. Directors and other“senior management” should take theopportunity to review the managementof, and responsibilities for, health andsafety in their own organisations andensure they have appropriate andeffective health and safety processes.The management system shouldidentify the appropriate structure, staffresponsibilities, competencies andculture combined with a pro-activeauditing framework that demonstratesconformity and seeks continualimprovement.

Senior managers will not be able todemonstrate that they have dischargedtheir duties by simply delegatinghealth and safety responsibilities tomore junior managers and health andsafety professionals. They are to beencouraged to display leadership andplay active individual roles in healthand safety strategies and demonstratenot only appropriate risk assessments,

clearly documented safe workingprocedures, relevant training andcompetence but also that theseprocesses were stringently appliedacross the organisation and regularlyreviewed to ensure that they wereat all times a good fit to changingcircumstances. That is to say that theyare “managing the activities” of theorganisation as the Act implies shouldbe the case. The evidence reviewedwill demonstrate more than compliancewith legislation but also effectiveimplementation and improvementwhen the need arises.It may also provenecessary to periodically call upon theservices of external health and safety,and risk management experts in orderto benchmark and validate organisations’endeavors against best practice.

Particularly important will be to ensurethat procedures, expected standardsand practices are communicated anddemonstrated to employees and otherpotentially affected persons in a clearand effective manner so as to helpformulate the necessary “attitudes…and accepted practices” (a clearreference to safety culture) withinan organisation.


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The Act fails to fully define the sort of“health and safety guidance” to whichan organisation might be expected tohave consulted and acted upon in thecontext of an alleged breach but thiswill undoubtedly include material suchas ACOPs, HSE Guidance and BritishStandards. There may also be norestrictions on a jury looking at widerindustry guidance, research reportsetc. The HSE website will provide auseful starting point, with its facilityfor searching by industry type or healthand safety topic. Organisations underthe spotlight will be hoping that thecourts and juries take a pragmaticand realistic view on the issues offoreseeability and what is reasonablypracticable in the unique and particularbusiness circumstances they may face.

It is also important to remember thatwhile the new law has no impact onindividual liability, prosecutors will stillbe able to target directors and seniorexecutives for gross negligence in theconduct of their management rolesunder Section 37 of the HSWA. Also,the new Act will be in addition to, andwill not replace the existing Scottishoffence of Culpable Homicide, and theexisting Common Law manslaughteroffence under which individuals anddirectors / owners of small businesseshave previously been successfullyprosecuted for manslaughter offences.

KEEPING UP TO DATE –

CONTINUOUS IMPROVEMENT

The Act effectively requires oforganisations that they make, andfor their own sake record, every effortto keep abreast of developmentsin health and safety in their line ofbusiness. Organisations, on completionof their risk assessments, should reviewand introduce new engineering andother “higher order” hierarchicalsolutions through product or processto minimise the risk of identifiedhazards. Trend analysis of incidentsshould include corrective actions toreduce future occurrence or severity.

For the majority of organisationswith registration to a recognisedmanagement system e.g. ISO 9001,ISO14001 or BS OHSAS 18001, theprocess of Plan, Do, Check and Actto improve will be recognised.

TIME TO TAKE ACTION?

The good news is that the explanatorynotes to the Bill state: “There isno question of liability where themanagement of an activity includesreasonable safeguards and a deathnonetheless occurs”. With the provisionsof the Act not due to come into forceuntil April of next year, there is timeyet for organisations to address anyshortcomings in their governancestructure, policies and systems. It mustbe recognised, however, thatcompany-wide attitudes and acceptedpractices may take more time tochange.


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WHAT DOES SENIOR

MANAGEMENT BEST

PRACTICE LOOK LIKE?

While there has been much attentionto the arrival of the new legislation,there has been, as yet, little commentaryon how an organisation and its seniormanagement can mitigate the prospectsof a successful prosecution againstthem. Inevitably, there is some uncertaintyas to how the various tests forestablishing systemic managementfailures will apply in practice and thisis likely to remain the case untilprecedents are set and pored over.However, there is well establishedguidance out there as to what directorsand senior managers should bedoing already.

GUIDANCE FOR DIRECTORS

AND BOARD MEMBERS

“Revitalising Health & Safety” was thejoint Government and HSE strategy,launched in 2001, to inject someimpetus into the health and safetyagenda. At that time they producedguidance, within the context of widercorporate governance, outliningdirectors’ and board members’responsibilities for Health and Safety(INDG343). While guidance does nothold the same legal weight as statutoryduties or Approved Codes of Practice,in the context of establishing groundsfor a prosecution under the new Act, itwill be highly relevant. In the guidance,five main principles were set out:-

1. The board must accept formallyand publicly its collective role inproviding health and safety leadership;

2.Each member of the board needsto accept their individual role inachieving this;

3.All board decisions must reflectthe intentions expressed in theirhealth and safety policy statement;

4.The board must recognise its rolein engaging the active participationof workers in improving healthand safety.

5.The board must be kept informedof all risk management issues,preferably by the appointmentof a health and safety director.

At the time of writing, the HSC inconjunction with the Institute ofDirectors were due to publish updatedguidance for directors on their healthand safety responsibilities. This guidance(INDG417) entitled Leading health andsafety at work: leadership actions fordirectors and board members is nowavailable for free download from thecorporate manslaughter pages of thethe HSE website.

COMPLIANCE

Taking a basic compliance approach,the general duty of care owed byemployers to employees and othersaffected by their business is outlinedunder the HSWA and further expandedon in the Management of Health andSafety at Work Regulations (MHSWR).Some of the basic frameworkrequirements are as follows:-

• The HSWA requires that you need toprepare, and make sure your workersknow about, a written statement ofyour health and safety policy and thearrangements in place to put it intoeffect.

• These general duties on employersare expanded and explained in theMHSWR, which include requirementsfor employers to assess the work-related risks faced by employees andby people not in their employment;

• To have effective arrangementsin place for planning, organising,controlling, monitoring andreviewing preventive andprotective measures;

• To appoint one or more competentpersons to help in undertaking themeasures needed to comply withhealth and safety law and;

• To provide employees withcomprehensible and relevantinformation on the risks they faceand the preventive and protectivemeasures that control those risks.


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MANAGEMENT SYSTEMS

With the Act focussing on systemicfailures to manage health and safety inorganisations, it follows that themultitude of work-related hazardsrequires a systematic approach tohealth and safety management. Inrecent years, one of the predominantmanagement tools has been formaloccupational health and safetymanagement systems. The referenceunder the MHSWR to having effectivearrangements for planning, organising,controlling, monitoring and reviewingpreventative and protective measures(or Plan, Do, Check, Act) providessimilarity of many familiar managementsystems approaches to health andsafety, such as HSG65 and BS OHSAS18001, which strive for continualimprovement as their overarchingintent. The organisations that use amanagement system as a frameworkfor being pro-active will be able todemonstrate their integrity as opposedto those organisations who use acertificate of accreditation as lip service.

Organisations should be mindful ofhiding behind a veil of complianceor third party certification tomanagement systems as all theyneed to do. The new legislation willbe able to permeate and interrogateorganisations that pay lip service tosuch matters, demanding evidenceof a pro-active and holistic inter-departmental management (i.e. non-silo) approach to health and safety thatis embedded in the wider culture ofthe organisation and led from the mostsenior management positions.

CONCLUSIONS

Organisations who fail to recognisethis Act as a significant and subtlepiece of legislation will do so at theirperil. It removes many of the barriersto a successful prosecution under theexisting legal framework and withoutquestion, stigma and reputation /brand damage will be the Act’s biggestweapon. Demonstration of effectivemanagement systems and a risk awaresafety culture are likely to be keybattlegrounds at trial. The acts andomissions of senior individuals will beunder the microscope as never before.

FURTHER INFORMATION

More information can be found on theHSE website: www.hse.gov.uk and thefull contents of the Act can be viewed athttp://www.opsi.gov.uk/acts/acts2007/20070019.htm

AUTHOR BIOGRAPHIES

Mark Black, Liability Risk ManagerMark joined QBE in 1998 serving 6years as a liability claims inspectorbefore joining the Liability RiskManagement team in 2004. He holdsan honours degree in RiskManagement and the Nebosh NationalDiploma in Occupational Safety andHealth.

Jonathan Coatman, Claims ControllerJonathan is a liability specialist withinthe QBE Strategic Claims team basedin London. His role primarily involvesthe management of claims withsignificant financial value in the areasof employers' liability, public liabilityand professional indemnity. Jonathanalso provides technical input to the riskmanagement, underwriting andactuarial functions within QBE and onbehalf of external clients throughbriefing notes, articles and consultancy.

QBE

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Manslaughter

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