EEF actively lobbied during the development of the Bill for pragmatic legislation. The more controversial aspects of the Bill have been ironed out and the new Act should resolve the previous legal difficulties with the common law offence of Gross Negligence Manslaughter.
The new offence does not apply to individuals. The primary sanction on conviction will be an unlimited fine against the company, coupled with the likely adverse publicity associated with such a conviction.
What is the offence?
An organisation will be guilty of the new offence if the way in which its activities are managed or organised causes a death and amounts to a gross breach of a duty of care to the deceased.
For a gross breach to have occurred, the organisation’s conduct must have fallen far below what could have been reasonably expected.
Juries will consider how the fatal activity was managed or organised throughout the organisation, including any systems and processes for managing safety and how these were operated in practice.
A substantial part of the failure within the organisation must have been at a senior level. (Senior level means the people who make significant decisions about the organisation or substantial parts of it. This includes both centralised, headquarters functions as well as those in operational management roles.)
Does the offence apply to individuals?
No. The offence is aimed at cases where management failures lie across an organisation and it is the organisation itself that will face prosecution.
However, individuals (directors, senior managers, and others) can already be prosecuted for gross negligence manslaughter/culpable homicide and for health and safety offences. The Act does not change this and prosecutions against individuals will continue to be taken where there is sufficient evidence and it is in the public interest to do so
What are the penalties?
An organisation guilty of the offence will be liable to an unlimited fine. The Act also provides for courts to impose a publicity order, requiring the organisation to publicise details of its conviction and fine.
The mechanism for publicity orders will commence when sentencing guidelines are available (expected in autumn 2008). Courts may also require an organisation to take steps to address the failures behind the death (a remedial order).
Can a parent company be convicted because of failures within a subsidiary?
No. Companies within a group structure are all separate legal entities and therefore subject to the offence separately. In practice, the relevant duties of care that underpin the offence are more likely to be owed by a subsidiary than a parent.
What do I have to do?
Stakeholder groups advise that organisations with high quality and effective health and safety management systems should have nothing to fear from the new legislation, as the offence is targeted to capture high level corporate failings in management.
Current good practice on health and safety management demonstrates that effective risk management is a board-level issue for senior directors. Many companies already have robust management systems in place to protect their operations and stakeholders.
Further information
EEF ran a series of seminars around the country on the legislation in advance of it coming into force. For further background to the Act see the attached briefing note.
For the Act itself, and for the government’s guidance, visit the Ministry of Justice. The two main guides are:
Understanding the Corporate Manslaughter and Corporate Homicide Act 2007 (provides summary information)
Reforming corporate liability for work-related death: a guide to the Corporate Manslaughter and Corporate Homicide Act 2007 (provides more extensive guidance)