“I didn’t know” is no defence, say legal experts, who are urging bosses to get up to speed with the finer details of the Corporate Manslaughter and Corporate Homicide Act. But, as Annie Hayes discovers, research suggests senior managers are still unaware of their responsibilities, despite the ticking clock.
The Corporate Manslaughter and Corporate Homicide Act was given Royal assent on 26 July 2007. The offence will come into force on 6 April 2008 and will be called Corporate Manslaughter in England, Wales and Northern Ireland, and Corporate Homicide in Scotland.
The new law is the result of a 10-year battle by campaigners to place responsibility for any death caused by corporate negligence firmly at the door of senior management. It’s been a long and torturous road and represents what is arguably one of the most significant changes in health and safety law for more than 30 years.
After 6 April, the likelihood of a conviction is significantly higher than under current law. Currently, a single individual, identifiable as the directing mind of the company, has to be personally guilty of gross negligence or manslaughter before an organisation can be convicted of corporate manslaughter.
Paul Ralph, of law firm Thomas Eggar, says that the penalties are severe, offences are indictable only (they must be dealt with in a Crown Court) and, on conviction, the organisation will be liable to a fine, which in the Crown Court will be unlimited in its value.
The punishment is all the more dramatic given that there has never been a successful prosecution under the existing law of corporate manslaughter. Tragedies as high profile as The Herald of Free Enterprise and Hatfield disasters all resulted in corporate manslaughter or culpable homicide acquittals. The number of successful prosecutions have been in England, against very small companies, and have been few and far between.
Brian Nimick, British Safety Council
From 6 April all this changes. Companies, regardless of size, are at risk of prosecution and conviction where there has been a fatality caused by a gross breach of a relevant duty of care and where the conduct of senior management was a substantial cause of the breach.
Senior managers may escape a prison sentence (the government backed down on this) but the new power of the courts to order a ‘publicity order’ will mean that companies that are convicted risk serious damage to their reputation.
Yet despite the constant warnings, legislation briefings and crippling punishments, senior management seem surprisingly unphased and ill-informed about the new regulations.
Ignorance is no longer bliss
Research from the British Safety Council, published earlier this year, suggests that, shockingly, it is companies in the capital and south east that have the lowest awareness of the impending law, whilst a third of businesses in London claim to be unaware of the Act altogether, with barely half (44%) prepared for it.
Just over half of firms in the south east claim to not fully understand the implications of the Act on their business; and just 20 per cent of companies in this region are fully prepared for it, compared with 59 per cent in the south west and west Midlands.
Smaller businesses are particularly at risk. Just one third of companies with five or less employees understand the implications of the Act on their business, compared with over half of all companies with 50 employees.
“The new legislation is a wake up call to the many thousands of employers who freely admit to not understanding or even knowing about the new Act,” says Brian Nimick, chief executive officer of the British Safety Council.
It’s a finding that is being echoed time and time again. Insurers Hiscox finds that more than 50 per cent of employers are not prepared for the introduction of the new law.
Callum Taylor, management liability underwriting manager at Hiscox, says: “We don’t yet know how often or how rigorously judges will implement this law, but one thing very clear is that the Act is going to be another worry to add to the many already faced by businesses.”
There’s no excuse, either, for failing to understand just who is senior management and who isn’t. The Act makes it plain and clear:
‘Senior management’, in relation to an organisation, means the persons who play significant roles in:
- The making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or
- The actual managing or organising of the whole or a substantial part of those activities.
With the heavy burden of responsibility being firmly placed with senior management, it appears to be more important than ever to ensure all employees are well informed, confident and able to carry out their roles correctly and to the best of their ability. This is the responsibility of those at the top.
Yet Mary Clark, chief executive officer of Cognisco, an assessment and learning solutions provider, says many senior managers may be shocked to learn that on average, 23% of their employees do not understand at least one crucial area of their job.
Clark says the consequences of this could be catastrophic and advises that the best way to reduce exposure to this risk is for organisations to fully understand their workforce and their capabilities.
Staying on the right side of the law
Ralph says organisation and evaluation also help: “Unlike previous health and safety legislation, there are no duties or procedures to analyse or adopt. Constant review and re-evaluation will be an organisation’s potential saviour. Check, check and check again and ensure that policies and systems of control are updated, cascaded and followed.”
He adds: “Beware of the danger of ‘failing to know’ as well as ‘failing to do’. Monitor and audit frequently.”
The Health and Safety Executive’s guide is a good place to start, suggests Ralph, who also notes that the new Act looks towards conduct and control: “Those in an organisation with clear lines of health and safety control should be encouraged to obtain formal and recognised training and qualifications to show that they have an understanding of the nature of health and safety.”
Paul Ralph, Thomas Eggar solicitors
Ralph remarks that driving fatalities may trigger the first prosecutions under the new Act. It’s a finding that is backed up by LicenceCheck, a driving licence verification provider. In the event of a fatal incident involving an employee driving on company business, an employer may be required to provide evidence of policies and procedures which confirm an employee’s eligibility to drive and have precautionary measures in place to ensure their safety on work-related journeys.
Richard Brown, managing director of LicenceCheck, says: “Almost every business has employees who drive on their behalf. This could be drivers of company cars, vans, heavy goods vehicles or even staff posting mail on their way home. All are making journeys for their employer, but are they legally licensed to do so?”
Brown advises bosses to regularly verify that employees are licensed and entitled to drive but, of course, the responsibility stretches further and Ralph says it should go as far as ensuring that employees own vehicles, if used for even occasional company use, are fit for the purpose.
This, says Ralph, includes checking for a current MOT certificate and valid insurance: “An employee should be aware of the rules and the penalties for breach and then sign to that effect.”
There really is no excuse for not being aware of the obligations under the new Act. Employers must take action now to stay on the right side of the law. Defining who is a ‘senior manager’, making them aware of their responsibilities, assessing and providing training where needed and reviewing and monitoring procedures, are all part of the new responsibilities. Time is running out and bosses can no longer afford to wallow in their own ignorance.