Relevant legislation
From 6 April 2008, The Corporate Manslaughter and Corporate Homicide Act clarifies the criminal liabilities of companies or organizations where serious failures in the management of health and safety result in a fatality. This is the first time in law that companies can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care.
Not every "management failure" that causes death, however serious, will result in a company being prosecuted for corporate manslaughter. The failure must be at senior management level. A person is a "senior manager" if he or she plays a "significant role in the making of decisions about how the whole or a "substantial part" of the organization is to be managed or organized, or plays a significant role
in the actual managing or organizing of the whole or a substantial part of those activities.
The difficulty for the construction industry in particular will be in determining who will be considered to be a senior manager. For example, will the project or site manager at a construction site be judged to be involved in the managing of a substantial part of the organization’s activities? Much will depend on the value of the project in comparison to the turnover of the company as a whole.
The full act can be viewed at:
http://www.opsi.gov.uk/acts/acts2007/pdf/ukpga_20070019_en.pdf
How does Corporate Manslaughter link to Health and Safety?
Although the new Corporate Manslaughter act is not part of health and safety law, it will introduce an important new element in the corporate management of health and safety.
Within the new act, a “gross failure” is defined as conduct that "falls far below what can reasonably be expected of the organization
in the circumstances". In assessing whether there has been a gross failure, the law will require a consideration of whether the organization
complied with health and safety legislation and guidance. If a health and safety breach is established, the jury must then consider (a) how serious
was the failure, and (b) how much of a risk of death resulted from the failure.
In any subsequent prosecution, it will be for the jury to assess whether any breaches of health and safety law and guidance are sufficiently serious to warrant convicting for manslaughter. The line between a health and safety offence and a corporate manslaughter offence will not be an easy one to draw.
Prosecutions will be of the corporate body but the liability of directors, board members or other individuals under health and safety law or general criminal law, will be unaffected. And the corporate body itself and individuals can still be prosecuted for separate health and safety offences.
Preparing for Compliance
The introduction of the Corporate Manslaughter and Corporate Homicide Act makes it even more crucial to review your health and safety policy and take the necessary steps to ensure compliance. One key action is to clarify who is considered to be “senior management” and ensure that this person / group of people are aware of their responsibilities and the potential consequences under the act. Once identified, the senior management needs to receive training about their role in satisfying the company’s health and safety responsibilities.
For assistance in any aspect of the review of your company’s health
and safety policies or the training of your senior management team to ensure
health and safety compliance, please contact
McCormack Benson Health and Safety Consultants.
Proposed Penalties under the Corporate Manslaughter Act
Under the Corporate Manslaughter Act courts may impose an unlimited fine, a publicity order and/or a remedial order.
Firms found guilty of the new offence of corporate manslaughter should be fined as much as 10% of their annual turnover, according to the Sentencing Advisory Panel (SAP) - an independent body sponsored by the Ministry of Justice that advises the Sentencing Guidelines Council.
Launching a consultation on sentencing guidelines for the new act in December 2007, SAP also proposed that courts should impose a "publicity order" on every organization convicted of the offence to advertise the fact of its conviction, and the fine imposed. Publicity orders are an entirely new sanction in England and Wales and could require publicity on television; in local, national or trade press; or in notices to shareholders or letters to customers.
In its consultation, the SAP argues that because the new offence has been created for the most serious instances of management failure leading to a death, "a fine imposed for an offence under the Corporate Manslaughter Act should be set at a level significantly higher than for an offence under the Health and Safety at Work Act involving death."
For a first offence of corporate manslaughter where the defendant has pleaded not guilty, the SAP proposes a starting point of 5% of annual turnover, based on an average taken over three years. Taking into account any aggravating or mitigating factors, the court should ultimately arrive at a figure between 2.5% and 10% of turnover, or more if there are previous convictions or other serious aggravating factors.
The cost of Corporate Manslaughter?
In 2005, Transco was fined £15 million for safety breaches that led to the deaths of four members of a family in a gas explosion. To date, this is the largest fine ever imposed under health and safety legislation; but it represented less than 1% of the firm's annual turnover. A fine based on 10% of its annual turnover would have cost the firm £150 million.
In November 2007, house builder George Wimpey (now Taylor Wimpey) was fined £300,000 after a contractor was killed on its site. A fine based on 10% of its 2006 UK turnover would have cost the firm £239 million.
Network Rail was fined £3.5 million after the Hatfield train derailment in 2000 in which four people were killed. If it had been fined 10% of its latest annual turnover, the fine would have been £600 million.
Balfour Beatty was fined £7.5 million over the Hatfield derailment. If it had been fined 10% of turnover, the fine would have approached £200 million.
Fatal Injuries in the UK
In the financial year 2006/7, 241 workers were fatally injured in the UK, which represented a 11% increase on the previous year; a five year high in the face of a long term downward trend that had leveled off over the last five years.
Of the main industrial sectors, agriculture (23 deaths equating to 8.1
deaths per 100,000) and construction (77 deaths equating to 3.7 deaths
per 100,000, representing a 28% increase on the previous year) have the
highest rates of fatal injury. Together these two sectors account for 46%
of fatal injuries to workers. Falling
from height continues
to be the most common kind of accident accounting for 19% of fatal injuries
to workers in 2006/07 (this rises to 30% or 23 deaths in the construction
industry).
It remains to be seen how the Health and Safety Executive (HSE) will
cope with demands to investigate serious injuries in the workplace in light
of the Corporate Manslaughter and Corporate Homicide Act. HSE operational
procedures state clearly that certain priority categories of incident – including “amputation
of hand/arm or foot/leg” and falls from height – should result
in an investigation. In 2006/07, HSE inspectors failed to investigate some
307 of the most serious workplace injuries, giving “inadequate resources” as
the reason.
Please get in touch to make sure your are eady to deal with Corporate
Manslaughter Act.
Related Pages:
Falls and Working at Height
Corporate Manslaughter - MBHS Health and Safety Consultants
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