m

038-040_EM_AugSep05_ES 18/7/05 4:36 pm Page 38

ww

w.ie

e.or

g/m

gt

The Government finally issued, in March 2005,its draft Bill on Corporate Manslaughtertogether with a consultation document. Thiscomes almost eight years after it pledged in itsfirst manifesto to introduce a new offence ofcorporate killing. It is worth noting that the

much more emotive title of ‘corporate killing’ has beenabandoned in this draft, the Government preferring to stickwith an offence of ‘corporate manslaughter’. The draft Billwill codify the law and, in so doing, abolish the common lawoffence of manslaughter by gross negligence insofar as itapplies to corporations.

The main reason for introducing a reform of the law hasbeen the very small number of successful prosecutions andthe perceived ineffectiveness of the existing law to holdlarge companies to account where there has been a death.The consultation document quotes the following statistics:“Since 1992 there have been 34 prosecution cases for work-related manslaughter but only six small organisations havebeen convicted”. This stems from the difficulty in finding asenior individual personally guilty of ‘gross negligencemanslaughter’ before the company itself can be convictedof the same offence. That is, gross negligence on the part ofsomebody who is part of the controlling mind of thecompany. The Bill will abolish what has become known asthe identification doctrine and will introduce a new, specificoffence of corporate manslaughter.

GROSS FAILINGSThe offence will be committed if there was a gross failingby an organisation’s senior manager or managers to takereasonable care for the safety of their employees ormembers of the public, which caused a person’s death.

The offence will, as now, apply to all companies and othertypes of incorporated body (including many in the publicsector, such as local authorities) and, for the first time,government departments and other Crown bodies. Much ofthe delay in introducing the new offence can be attributedto arguments about the extent to which there should beimmunity carved out for the Crown. The consultationdocument states clearly that there will be no general Crownimmunity and sets out in a schedule those Crown bodiesspecifically affected. However, the offence will not apply tocentral government or public bodies responsible for matters

Corporate Corporate

38 IEE Engineering Management | August/September 2005

Law & Litigation

038-040_EM_AugSep05_ES 18/7/05 4:36 pm Page 39

the new landscapemanslaughter:manslaughter:

of public policy or carrying out uniquely public functionsas their accountability is achieved through ministers inParliament, public inquiries, judicial review, theombudsman or the ballot box. Other core public functionsare also exempt and include Government services in a civilemergency, or functions relating to the custody of prisoners.

The new offence is described as a grave criminal offenceand as such, key elements of the current law are retained.For example, the need for an organisation to owe a duty ofcare to the victim and the higher threshold that conductmust have been grossly negligent. The consultationdocument emphasises that “…the offence is to be reservedfor cases of gross negligence”.

SCOPE AND APPLICATIONScope has been touched on already but the new offence willapply to all corporate bodies. This covers companiesincorporated under company law, as well as other bodiesincorporated under statute, or Royal Charter. For example,it will include local authorities, NHS Trusts and many non-departmental public bodies.

The Bill has jurisdictional limits and will only apply todeaths occurring within England and Wales, althoughScotland and Northern Ireland are currently activelyconsidering reforming the law in those jurisdictions. Whileonly deaths within these jurisdictions are caught, it is notnecessary for the corporate defendant to have beenincorporated in England or Wales. The Bill will extend toall companies, including foreign registered companies, whoare operating within England and Wales. However, the Billdoes not have extra-territorial jurisdiction, which meansit will not apply to deaths of British nationals abroad, evenif they are employed and sent to work overseas bycompanies incorporated in England and Wales.

Unlike existing commonlaw…senior management conduct[can] be considered collectively, aswell as individually

‘‘

’’

Could you be liable? Kevin Bridges reveals what all company directors need to knowabout corporate manslaughter

Nevertheless, any suspicious death of a British nationalabroad can trigger an inquest (or fatal accidentinvestigation in Scotland), which, in turn, can lead to thepolice and Health & Safety Executive investigating, fromwhich other criminal charges can result.

DUTY OF CAREThe organisation (corporation, government department orother body listed in the schedule) can only be guilty of theoffence if the way in which the organisation’s activities aremanaged or organised by its senior managers amounts toa gross breach of a relevant duty of care owed by theorganisation to the deceased and that breach caused theperson’s death.

What amounts to a relevant duty of care includes theduties owed by employers to employees, transportcompanies to passengers, manufacturers to users ofproducts, those duties owed by construction companies andoccupiers of premises, and those owed by a range of otherservice providers.

MANAGEMENT FAILUREWhat lies at the heart of the new offence is therequirement for a management failure on the part of itssenior managers. The test for management failure focuseson the way in which a particular activity was beingmanaged or organised. It specifically targetsresponsibility on the working practices of organisationsand considers questions about how, at a seniormanagement level, activities were organised and/ormanaged. Unlike the existing common law, this allowssenior management conduct to be considered collectively,as well as individually. Criminality will only apply to thebody corporate where there is gross negligence on thepart of its senior managers, who are defined as “thosewho play a significant role in making management ➔

IEE Engineering Management | August/September 2005 39

Law & Litigation

40 IE

ww

w.ie

e.or

g/m

gt

038-040_EM_AugSep05_ES 18/7/05 4:36 pm Page 40

decisions about, or actuallymanaging, the activities of theorganisation as a whole, or asubstantial part of it”. At whatprecise point within anorganisation’s structure this willapply depends on a number offactors, including the overall size ofthe organisation. However, the roleplayed by the senior management inthe relevant activity needs to besignificant, which means decisive orsubstantial rather than minor or asupporting role.

The management failure by theorganisations’ senior managers mustamount to a gross breach of theorganisation’s duty to take reasonablecare. This is defined as conduct thatfalls far below what can reasonably beexpected of the organisation. Thiswill be a question for the jury, whowill have to consider whether theorganisation has failed to complywith any relevant health and safetylegislation or guidance. This is widelydrafted to mean not only the Health and Safety at Work etcAct 1974 and subordinate Regulations but also any code,guidance, manual or similar publication that is concernedwith health and safety matters and is made or issued(under an enactment or otherwise) by an authorityresponsible for the enforcement of health and safetylegislation, i.e. Approved Codes of Practice or guidanceissued by the Health and Safety Executive.

In respect of such a failure, it will be for the jury toconsider how serious it was, and if it amounts to grossnegligence and therefore criminal liability, and whether ornot the senior managers● knew or ought to have known that the organisation was

failing to comply;● were aware or ought to have been aware of the risk of

death or serious harm posed by the failure to comply; and● sought to cause the organisation to profit from the failure.

INDIVIDUAL RESPONSIBILITYThe draft Bill applies only to corporations (in its widestsense) and will not apply to individuals. Despitewidespread criticism, principally from trade unions, thisis a sensible approach, as the existing common lawoffence of ‘gross negligence manslaughter’ will continueto apply to individuals as it does now. This aspect of thecurrent law has not been criticised and applies to allindividuals regardless of their seniority in theorganisation, where by reason of their gross negligence,a death ensues. Individuals can also be held to account intheir personal capacity for specific offences under theHealth and Safety at Work etc Act 1974.

E Engineering Management | August/September 2005

SANCTIONSLike the present law, fines will beunlimited and courts can also requirethat specific remedial action be taken toaddress, within a specified timeframe,the failures that led to the death. The useof remedial orders is already availableunder existing health and safetylegislation but is seldom used. I envisagethat the use of such orders by the courtswill become more common place incases of corporate manslaughter in thefuture and compliance with these orderscould be expensive.

As now, the offence will beinvestigated by the police andprosecuted by the Crown ProsecutionService, using the Health and SafetyExecutive as advisors. The offence willbe indictable and so all cases will beheard in the Crown court before a judgeand jury.

FINAL WORDSThe proposals contained within thedraft Bill will create an offence that

should be more effective in prosecuting companies andother organisations, which at present escapeprosecution because of the difficulty in establishinggross negligence on the part of an individualembodying the company. However, the offence remainstargeted at the worst cases of management failurecausing death and is designed to capture truly corporatefailings in the management of risk.

As well as the possibility of very high fines, there arehidden costs associated with a successful prosecutionfor corporate manslaughter such as those involved incomplying with a remedial order and the huge impactit will have on a company’s reputation and its ability totender for future work. Insurers will also look carefullyat insurance premiums and whether they are preparedto insure the organisation at all in the future.

The Bill is designed to criminalise management’sgross disregard for health and safety. It is thereforeimportant for every organisation that falls within thescope of the draft Bill to audit its safety managementsystem as a matter of priority, and to take immediatesteps to ensure its systems for managing health andsafety are effective and encourage the development of apositive safety culture. ■

Kevin Bridges is an associate in the Dispute Resolution andLitigation group at Pinsent Masons

Do you think senior management should beheld liable for corporate manslaughter? Take our poll at www.iee.org/mgt