Manslaughter: Bosses beware

In nine days’ time, the Corporate Manslaughter and Corporate Homicide Act 2007 becomes law. The legislation will make it easier to prosecute companies when someone is killed in their workplaces. The government hopes that this will draw a line under a series of attempts to prosecute companies for corporate manslaughter, all of which ended in embarrassing failure. It will also mean that from now on, site deaths will result in a police investigation, rather than a Health and Safety Executive (HSE) probe. Cases will be taken by the Crown Prosecution Service in England and Wales, and the Procurator Fiscal in Scotland.

Despite the tougher laws, trade unions have complained that they still lack the teeth to tackle the industry’s appalling safety record (last year alone there were 77 construction-related deaths). Their main complaint is that executives whose companies are found guilty of manslaughter will not be imprisoned. But make no mistake. The Corporate Manslaughter Act heralds a big change in how serious accidents on building sites will be dealt with in future. Until now, companies could only be convicted of manslaughter if the prosecution could prove that a single “controlling mind” within the firm was to blame for a death. That made it impossible to convict big companies where responsibility is spread among a number of managers. In fact, there have only been six successful prosecutions in the past 16 years and these have all been against small companies.

“The new legislation will make it much easier to prosecute firms for corporate manslaughter,” says David Leckie, a partner in law firm Maclay Murray & Spens. “If an investigation finds that there has been a gross breach of a relevant duty of care, and the conduct of senior management played a substantial part in that breach, this will now be enough for a prosecution.” And if a prosecution reveals that failures in a company’s overall management systems fell far below what is reasonably expected, then this could result in the jury convicting company executives of corporate manslaughter.

The effect of giving investigations to the police would be significant. According to Leckie, “Any work death is likely to face a corporate manslaughter investigation, so the first person knocking on your door will be the local police, not the HSE. And a corporate manslaughter investigation will be lengthy and intrusive compared with the current regime.”

Although the new law stops short of imposing prison sentences on company executives, the courts will hit companies with substantial fines. The sentencing advisory panel has suggested that these should be equal to 5% of the company’s annual turnover, rising to 10% or more if there are aggravating factors, or down to 2.5% if there are mitigating factors. Courts can also impose Publicity Orders on guilty firms, forcing them to publicise the verdict in the national and trade press, as well as in all their annual report and in communications with clients.

The potential fines are enormous and I can tell you a lot of firms are taking notice of the new legislation and reviewing their procedures

John Price, Keltbray

“Industry-wide, the new law will undoubtedly have an impact,” says John Price, managing director of Keltbray. “The potential fines are enormous and I can tell you a lot of firms are taking notice of the legislation and reviewing their procedures. Firms are mindful of the potential consequences should there be a successful prosecution.”

Another contractor, who did not want to be named, added: “If you take the big firms in our industry, those with a couple of billion pounds turnover, they could conceivably be fined £100m or £200m if found guilty of corporate manslaughter. That’s the end of that company if that happens.”

However, Bob Blackman director of construction at Unite T&G insists the new legislation will be as “toothless as the old”. “One hopes the prosecution rate will increase under the new law, and that fines will really penalise guilty companies. But, in reality, when a person is killed on site, a successful corporate manslaughter prosecution should lead to an executive within that company being imprisoned. If there’s corporate fraud in a company the executives are sent to jail, so why not for corporate manslaughter?”

Price believes most firms in the industry manage site safety properly and already comply with the new law. “The situation is a lot better than even five years ago. At Keltbray, for example, we’ve put 850 workers through the industry IIF (Incident and Injury Free) programme and as far as we are concerned, the corporate manslaughter legislation is another step in improving health and safety across the industry.”

Meanwhile, a private members bill introduced by Labour MP Keith Hill, which calls for prison sentences to replace fines for a raft of health and safety breaches, had its second reading in parliament last month. Stuart Ponting, a solicitor specialising in defending health and safety prosecutions with DLA Piper, says: “It’s worth pointing out that the Corporate Manslaughter Act started life many years ago as a private members bill. There could still be some more onerous legislation in the pipeline.”