Thin end of the wedge?

On 20 July last year, the Government introduced the long-awaited Corporate Manslaughter and Corporate Homicide Bill in the House of Commons to approval from the unions and, indeed, some employer’s organisations.

Both sides of the debate no doubt felt they won a victory the Trade Union Congress (TUC) has secured legislation to make it easier to prosecute corporations (including companies and other ‘bodies corporate’) whose negligence has led to the death of an employee, while directors and senior managers have escaped for now, at least the spectre of personal liability and possible imprisonment for such deaths.

Nevertheless, this development has serious implications for corporations in terms of both their financial position and their reputation. The time is opportune for examining these implications, and also considering the worrying question of whether the issue of personal liability and possible imprisonment for managers and directors for breaches of Health and Safety law has truly been laid to rest.

The difficulties of securing convictions of corporations for manslaughter were amply demonstrated by the failure of prosecutions arising from large-scale disasters such as that which occurred at Hatfield Station and other rail crashes. The problems arise for a simple reason... For a corporation to be convicted of manslaughter, a ‘directing mind’ an individual who is regarded as embodying the corporation in his or her actions and/or decisions has to be guilty of the alleged offence as well. Except in the case of smaller enterprises where a director or senior manager was directly involved in the decision or action which led to the death, this is nigh on impossible to prove.

‘Directing mind’ requirement

The current law, therefore, bears much harder on the managers of smaller enterprises where the senior management are closely involved in day-to-day business decisions, and can therefore be implicated more closely in the events that resulted in a given individual’s ultimate death.

The Bill removes the ‘directing mind’ requirement. It creates a new offence of corporate manslaughter (or, in Scotland, corporate homicide). In order to prove the commission of the office, the following must be established:

• the death of a person to whom a ‘relevant Duty of Care’ was owed by an organisation (such as an employee or temporary worker);
• that the death was caused by the way in which the ‘senior managers’ of the organisation managed or organised its activities;
• that the way in which the death was caused amounted to a ‘gross breach’ of the Duty of Care owed by the organisation to the deceased.

Breach of a Duty of Care is ‘gross’ if the conduct alleged to amount to it falls “far below what can reasonably be expected of the organisation in the circumstances”. Whether or not the breach is ‘gross’ is a question for the Jury in a given case to decide (taking into account a non-exhaustive list of factors).

A glaring failure by management to take action in relation to a serious and known risk of death or serious injury, for example, would be likely to be considered a gross breach.

Breach of a Duty of Care is ‘gross’ if the conduct alleged to amount to it falls ‘far below what can reasonably be expected of the organisation in the circumstances’

For the first time, the Jury will be directed to take into account Health and Safety guidance that relates to the alleged breach of duty. Therefore, employers need to make sure they stay well on top of all guidance produced by the Health and Safety Executive that’s relevant to their specific activities.

The question of whether or not a relevant Duty of Care was owed by the organisation to the deceased is for the Judge, not the Jury. However, in the situation where the death of an employee or temporary worker at work is caused, for example, by improperly guarded or poorly maintained equipment, the prosecution will have little difficulty in proving this aspect of its case.

The concept of ‘senior manager’

By removing the need to prove the guilt of a ‘directing mind’ of the corporation, the Bill should make it easier to secure convictions of corporations for manslaughter. However, the uncertainties inherent in the concepts of ‘senior manager’ and ‘the way in which... activities are managed and organised’ give defence lawyers ample scope to raise arguments on behalf of their clients. Convictions may not flow as quickly as the Government anticipates.

Crucially, the Bill excludes individual liability for the new offence. There is no prospect, then, of directors and senior managers being prosecuted personally and fined or imprisoned under the Bill. Given public pressure for individual liability, its omission from the Bill is a major victory for employers’ lobbying organisations. That said, all businesses – whether or not they satisfy the legal definition of ‘corporation’ – must remember that the Bill leaves the existing law on individual liability for manslaughter (where a death can be shown to have been caused by the gross negligence of a particular individual) unchanged.

Should a fatality occur in the workplace, the first priority of the police will remain the investigation of whether that fatality is the product of a grossly negligent act perpetrated by an individual any individual, in fact in that workplace.

While there is no question of individuals being liable under the Bill, there’s no doubt that conviction will have substantial implications for a corporation’s reputation. The impact of a manslaughter conviction on the attitudes of customers will inevitably be greater than the impact of a conviction under general Health and Safety legislation.

Substantial fines can also be expected. It is unclear exactly how the Courts will fix the level of fines imposed for the new offence. It seems reasonable to suppose that their approach will be similar to that currently used in fatal cases (although one presumes fines will be increased to reflect the greater level of culpability implied by a manslaughter conviction).

This could have serious financial implications, of course, and in particular for the smaller business.

A glaring failure by management to take action in relation to a serious and known risk of death or serious injury, for example, would be likely to be considered a gross breach of Duty of Care

Health and Safety issues

The focus on senior management and the way in which it manages an organisation’s activities is likely to lead to a far greater concentration on safety management systems.

The Explanatory Notes to the Bill state: “There is no question of liability where the management of an activity includes reasonable safeguards and a death nonetheless occurs”. Businesses will need to scrutinise their procedures for Health and Safety management, and ensure that they are watertight. High risk areas such as maintenance of dangerous equipment and proper training of staff in relation to its use need careful attention.

Businesses which employ large numbers of casual staff and who may, in some cases, not have English as a first language need to ensure they are taking steps to communicate their safety procedures to such staff efficiently and effectively.

In welcoming the Bill, the TUC urged the Government to look again at the issue of liability for directors and senior managers. Victims’ Groups have also been vociferous in their calls for directors and managers to face sentences of imprisonment in fatal cases. The Government may hope that the Bill will silence such demands, but there’s no doubt at all that, should there be another major disaster along the lines of the Hatfield rail crash, the pressure to put directors and managers in the dock will increase still further.

Pressure on the Government

Will the Government withstand this pressure? It may have been unwilling to go as far as making directors and managers liable for manslaughter, but there are other avenues it could explore (such as providing for sentences of imprisonment for those convicted of offences under general Health and Safety law).

Pressure to make employers pay personally for management errors which lead to fatalities is likely to continue. It’s unlikely that this will be the Government’s last word on the issue.