The Corporate Manslaughter and Corporate Homicide Act 2007

The Corporate Manslaughter and Corporate Homicide Act 2007 gained Royal Assent on 26 July this 2007, the culmination of more than 10 years of work by reforming lawyers, activists, and those who resisted it. This Briefing note reviews the Act's purpose and its implications for health and safety practitioners and the directors and proprietors of organisations they advise.

Background
New legislation was promised in the Labour Party general election manifesto in 1997. Their proposals were based on Law Commission recommendations of 1996 regarding reform of the law on involuntary manslaughter, and over the next 3 years a number of Private Members' Bills were laid in Parliament. However, there was little Government progress until the Home Office issued a consultation document in May 2000.

Another period of relative inactivity followed until March 2005, when the Government published the first draft of the Corporate Manslaughter Bill for consultation. A joint Home Affairs and Work and Pensions Select Committee published a pre-legislative scrutiny report in December, and the Government responded the following March 2006. A Bill was finally laid before Parliament on 20 July 2006, and moved on to the House of Lords in December 2006.

The Lords concluded their scrutiny on 28 February 2007, however they tabled a number of amendments and the Bill passed back to the Commons. A period of ‘parliamentary ping-pong’ followed, with the Bill passing between the two Houses some eight times over a period of 3 months.

The major point of disagreement related to the way the legislation should apply to 'deaths in custody', a point championed by the former chief inspector of prisons, Lord Ramsbotham. Agreement was finally reached on 23 July 2007 at the last possible moment before parliamentary procedure would have rendered the Bill unsuccessful - requiring the whole process to begin all over again in the next session of Parliament.

The major provisions of the Act come into force across the whole of the UK on 6 April 2008. The controversial provisions on deaths in custody will come into force on a later date at the discretion of the Government. The Ministry of Justice has committed to publish guidance on the legislation before Christmas 2007.

Why are the new provisions needed?
Until now, corporate manslaughter (‘corporate homicide’ in Scotland) was an aspect of the common law offence of Gross Negligence Manslaughter. Legal tests associated with that offence mean that, before an organisation could be charged with corporate manslaughter, it was necessary to prove that “a directing mind’ of the organisation (that is, a senior individual who can be said to embody the company in his actions and decisions)”is also guilty of the offence. This is known as the identification principle.

Modern corporate structures tend to be complex, particularly in large organisations, often with many subsidiaries. It is often not possible to identify any one individual who could be considered the embodiment of the organisation, indeed corporate structures are often designed to avoid such a situation to ensure continuity regardless of senior management turnover. In the case of multinational organisations, such decision-making ability might lie outside UK jurisdiction.

Consequently, there have been few successful prosecutions for corporate manslaughter under the existing legal provisions. These have all related to very small organisations, where it has be possible to identify a single individual who was in ultimate control of the company’s activities, and to prove that this individual was personally guilty of the offence of Gross Negligence Manslaughter.

The shortcomings of the common law came to the public eye following a number of major disasters, when prosecutions for corporate manslaughter failed - or were not attempted - because of the problems associated with the identification principle.

Examples include the capsizing of the Herald of Free Enterprise off Zeebrugge in 1987 (197 dead), the Piper Alpha disaster in 1988 (166 dead), the Ladbrook Grove (31 dead) and Hatfield rail crashes (4 dead), and there are numerous other examples.

Bereaved families, survivors, and groups representing victims lobbied for a change in the law. Not only did they want the companies prosecuted for corporate manslaughter, they wanted to see company directors imprisoned for the offences.

Business groups were more reticent. Responsible companies and financial stakeholders agreed it should be easier to hold organisations to account where gross negligence led to fatality. However they were unconvinced of the benefit of imprisoning directors for this offence; whether this would significantly motivate a large organisation; and address the underlying corporate negligence that had led to the fatality. There was also debate over Crown immunity and whether grossly negligent public bodies should be liable for corporate manslaughter.

At each stage of the lengthy path to legislation, conflicting opinions were expressed and debated widely, in Parliament, in the media and in public debate. The key challenge for the Government was to bring forward legislation that would effectively address the shortcomings of the identification principle, be equitable, and strike a balance that would satisfy all key stakeholders.

The Corporate Manslaughter and Corporate Homicide Act 2007
So what is the result? The offence is defined in section 1 of the new legislation as follows:

“An organisation” ... “is guilty of an offence [of corporate manslaughter] if the way in which its activities are managed or organised:
a) causes a person’s death, and;
b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased”.

The term ‘organisation’ includes bodies incorporated by law or charter, partnerships, trades unions and employers’ associations, as well as police forces and crown bodies listed in a schedule to the Act. This opens the vast majority of organisations to liability.

The new offence takes context from the common law duty of care to persons. This is a well understood and well tried legal concept, and addresses the key interactions between organisations and individuals.

The Act further declares that:

“An organisation is guilty of an offence... only if the way in which its activities are managed or organised by its senior management is a substantial element in the breach referred to”

This clause is designed to ensure that only truly corporate failings are caught by the legislation. Individuals’ liability to the offence of Gross Negligence Manslaughter will remain where fatalities result from the acts or omissions of natural persons, rather than from corporate failings. The identification principle is not relevant in such cases and consequently current law is considered adequate for these offences.

Section 1 also establishes that on conviction, the offence of corporate manslaughter may be punishable by a fine – the Act does not set a limit on the penalty.

Sections 2 – 7 define ‘duty of care’ in the context of corporate manslaughter. Section 8 sets out factors to be considered by the jury in deciding on the offence, and aims to guide them in interpreting the terms used. It suggests the jury:

• must consider whether the organisation failed to comply with health and safety legislation relating to the breach, and if so, how serious that failure was and whether it contributed to the risk of a fatality;

• may consider whether evidence suggests that attitudes, policies, systems or practices within the organisation encouraged or tolerated compliance failure, and;

• may have regard to health and safety guidance, including codes, guidance or manuals, issued by an enforcing authority which relate to the breach. These three factors are key in setting the context for the offence.

Government intention
The Government clearly intends the offence of corporate manslaughter to apply to strategic failings, where senior managers have knowingly allowed the organisation to fail in its duties under health and safety legislation, and have done so deliberately, or by ignoring evidence there was a problem.

This targets the offence to fundamental failure of the management system at a high level within the organisation, leading to a wilful or negligent disregard for the health and safety of individuals.

It is entirely appropriate that the new offence should be directly related to health and safety legislation. However, concern has been expressed about the inclusion of guidance in the list of items to be considered by the jury.

Compliance with legislation is mandatory, and organisations can demonstrate compliance by adherence to the Health and Safety Commission’s Approved Codes of Practice (ACoPs) - or otherwise demonstrate an equivalent level of control through an alternative process. The understanding of legislation and ACoPs for compliance is a robust practice which involves consultation with key stakeholders.

Guidance (as opposed to ACoP) is not necessarily subject to the same stringent acceptance tests, and at the present time there is no legal obligation on any organisation to be aware of, or to comply with guidance material. It will be interesting to see how this point develops through case law.

Section 9 allows the judge to order a remedy to the state of affairs that led to the offence. In practice this is likely to have been addressed well before the case comes to court, as the HSE (or local authority) will use enforcement notices to deal with such situations. This clause mirrors similar ones in health and safety legislation, but is unlikely to be used extensively.

Section 10 introduces the concept of publicity orders for the first time in the context of health and safety regulation. The court may require an offending organisation to publicise details of their offence and of the sanction imposed, using media and wording determined by the court and the regulator.

The result might be a requirement for an organisation to pay for advertising in a newspaper or journal in order to communicate details of their offence and sentence. This could represent a significant and xtreme sanction, which could significantly damage the image and reputation of an organisation, probably directly affecting share-price, profit and market share. In any event, a case of corporate manslaughter is likely to attract significant media attention.

While the direct cost of the publicity could affect the organisation, the information they are required to publish is likely to be in the public domain already, lessening the impact of this sanction on an already depleted reputation.

Section 11 removes blanket Crown immunity for the offence of corporate manslaughter. The list of crown bodies is comprehensive, but there are obviously some exceptions, and these are also set out in the Act. Section 17 establishes that proceedings for an offence of corporate manslaughter cannot commence without the consent of the Director of Public Prosecutions (DPP). This is a key safeguard.

The Government intends that this offence should apply only in the most serious cases, and that it expects only a ‘handful’ of prosecutions each year. A requirement for DPP consent will guard against any attempt to bring private actions for this offence, as well as ill-judged or frivolous charges being made.

Section 18 explicitly excludes individual or secondary liability for corporate manslaughter, thus underlining the Government’s assertion this is a purely corporate offence.

Section 19 allows for convictions under health and safety legislation to be made within corporate manslaughter proceedings. This eliminates the need for two sets of proceedings, and allows for conviction under health and safety legislation even if a ‘not guilty’ verdict were reached on the charge of corporate manslaughter.

Section 20 abolishes the existing provisions for corporate manslaughter under the common law offence of Gross Negligence Manslaughter.

Reaction to the Act
In general, stakeholder groups have responded positively to the new Act. As with all new legislation, effectiveness of the key tests and definitions will be decided through case law. It is, therefore, likely to be some time before the Government and society at large can determine whether the legislation has met the objective of facilitating prosecution for corporate manslaughter by abolishing the identification principle.

Some stakeholders are concerned that aspects of the identification principle remain in Section 1, where it is defined that:

“An organisation is guilty of an offence under this section only if the way in which its activities are managed or organised by its senior management is a substantial element in the breech referred to”

The Government faced a key challenge in defining the offence to target truly corporate failings at a strategic decision - making level within an organisation.

Company structures vary significantly, and despite much discussion, no stakeholder was able to suggest a form of words that would target the offence more effectively to meet the Government’s objective. It will be interesting to see how this issue develops in case law.

Many organisations are considering what they need to do in order to ensure that they protect themselves from prosecution under the Corporate Manslaughter and Corporate Homicide Act 2007.

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.

What does it mean for your management systems?
For health and safety practitioners, the new legislation presents an excellent opportunity to review management systems and practice within your own organisations. There was significant media coverage about this legislation.

Awareness among senior managers is high, as is concern over compliance and personal liability. This presents an opportunity to develop senior management commitment to real and effective health and safety management.

The Cullen (Piper Alpha) and Sheen (Herald of Free Enterprise) enquiry reports show that organisations without effective policies, people and procedures to manage risk are 'accidents waiting to happen'. Current good practice on health and safety management demonstrates effective risk management is a board-level issue for senior directors.

Recent HSE research (see RR535) shows that Great Britain is unusual in not imposing explicit health and safety duties on directors. The majority of the nine countries studied have this kind of legislation, and one must draw the conclusion that multi-national companies already have robust management systems in place to protect their operations and stakeholders.

For organisations still developing such sophistication, the most effective way to ensure compliance is to adopt a standard ‘plan – do – check – act cycle’ of effective management practice, as defined in HS(G)65, BS8800 or OHSAS18001.

These systems encourage:
• a simple structure for health and safety
management;
• clear roles and responsibilities;
• defined targets and objectives;
• employee and management involvement;
• regular monitoring and objective assessment of performance;
• process for raising and correcting problems and issues;
• continuous improvement, and;
• possible benchmarking or external accreditation to validate performance.

Conclusion
In conclusion, the new Corporate Manslaughter and Corporate Homicide Act 2007 is a long-awaited piece of legislation. It takes its context from well established legal principles, and targets corporate failure at senior level within an organisation, which led to the death of persons where there was an established duty of care.

In order to deliver the duty of care, and thereby prevent a charge of corporate manslaughter, organisations should ensure the effectiveness of the own health and safety management system, proactively identify and rectify shortcomings, remain up to date with developments in health and safety legislation, good practice and guidance, and seek competent specialist advice where necessary.

The legislation comes into force throughout Great Britain on 6 April 2007. The scale of its impact will be defined through case law, although the Government forecasts only a handful of cases each year. The primary sanction on conviction will be an unlimited fine, and individual liability is explicitly excluded for this offence.

References
1 Legislating the Criminal Code: Involuntary Manslaughter LC237 Law Commission March 1996
2 The Corporate Manslaughter and Corporate Homicide Act 2007 HMSO 2007
3 The Corporate Manslaughter and Corporate Homicide Bill – Explanatory Notes HMSO 2006
4 International comparison of health and safety responsibilities of company directors RR535 HSE 2007
5 Successful Health and Safety Management HS(G)65 ISBN 0717612767 HSE Books 1997
6 Occupational Health and Safety Management Systems BS8800:2004 BSI
7 Occupational Health and Safety Management Systems OHSAS 18001:2007 BSI
8 Questioning performance: the director's guide to health, safety and the environment ISBN 0 901357 37 5 IOSH 2005