On the safe side: Corporate manslaughter and health and safety offences

In the past eight months, health and safety legislation in England, Wales and Northern Ireland has gone through enormous change. The Health and Safety (Offences) Act came into force on 16 January, following the Corporate Manslaughter and Homicide Act, which came into effect in April 2008. These two constitute a double whammy of legislation for companies that put employees at risk.

Neither imposes extra legal duties, but they do make significant changes to the prosecution and sentencing of health and safety related offences.

The Corporate Manslaughter Act is intended to make it easier to prosecute companies whose failures have led to death. It has always been possible to prosecute a company for corporate manslaughter, but the law required a “directing mind” in the company, whose negligent acts had led to a fatality, to be identified.

As a company cannot be sent to prison, the act imposes non-custodial penalties, such as an unlimited fine, and forcing the company to publicise its conviction and make good the state of affairs that led to the fatality.

For example, a company was trialled under the old corporate manslaughter law a few years ago, but because no one directing mind could be identified, the corporate manslaughter prosecution was dropped.

Still, failed corporate manslaughter prosecutions did not mean the company was let off. In these cases companies were often charged with health and safety offences, which carried unlimited fines. In this situation the company was fined £10m.

So, what difference will the new laws make? First, there is the stigma of a corporate manslaughter conviction as opposed to a health and safety one. Second, while fines remain unlimited, it is envisaged that some sort of tariff system will be imposed, starting from 5% of average annual turnover for three years prior to the offence and possibly rising to more than 10% in the most serious cases.

If a fatality occurs, a company may find itself being investigated for both health and safety breaches and corporate manslaughter. If convicted for the latter, it is likely to find itself convicted for the former, too. If the corporate manslaughter charge is successful, the health and safety charge is unlikely to lead to a separate penalty, but if fails, the prosecution has a back-up.

Before, unless an individual was charged with manslaughter, there was no prospect of going to prison for health and safety offences

While the Corporate Manslaughter Act applies only to fatal accidents, the Offences Act potentially applies to all accidents. It increases the penalties for offences charged under the Health and Safety at Work Act 1974, and its effect is in addition to the corporate manslaughter legislation.

The maximum fine the magistrates’ court can impose has risen from £5,000 to £20,000. Also, now most offences can be trialled in the crown court, where fines are unlimited.

For individuals, prison is now an option in most cases, on top of the fine. Before, unless an individual was charged with manslaughter, there was no prospect of going to prison for health and safety offences.

In October, a worker was fined £2,500 after an accident he caused by cutting corners left a member of the public dead. If this accident occurred now, he may have found himself subject to the fine and a prison sentence of up to 12 months, or two years if the matter was sentenced in the crown court.

We are now waiting for guidance from the sentencing advisory panel, on tariffs for prosecutions under both acts. For health and safety convictions, a starting point of 2.5% of average turnover, rising to 7.5% for most serious cases, has been mooted. If this is adopted, then health and safety fines could rocket – not great news for an industry already rocked by the downturn. Then again, those who have rigorous health and safety processes are no more likely to be prosecuted than they were a year ago.

As ever, it is worth remembering that it is not only the penalties imposed on a company following a health and safety offence that can hurt. The damage to reputation that follows such a breach is likely to leave businesses with fewer customers willing to deal with them and deny them access to potential employees who feel they will not be looked after.

• The acts’ main purpose is to increase and encourage compliance, minimising the risk posed to employees by insufficient health and safety procedures, whether intentional or otherwise. The HSE has stated that it will target those who cut corners, put profits before safety and put workers and the general public at risk.