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For many construction companies there has been growing concern regarding the liabilities of both the company and individual directors. Added to this, The Corporate Manslaughter and Corporate Homicide Act 2007 (the new Act), which came into force last year on 6 April makes it easier to pursue successful prosecutions against large organisations in the UK for corporate manslaughter. The new Act is not retrospective so deaths which occurred before 6 April will be governed by the old law.
The old law
Under the previous law in order to bring a successful prosecution for corporate manslaughter it had to be shown that an individual at the very top of the company, who could be said to embody the company in his actions and decisions (a "directing mind") was personally guilty of manslaughter. A number of key prosecutions failed due, in the main, to the complex management structures of large companies, so often only prosecutions against smaller companies with hands on directors were successful.
The new Act
The new Act provides that an organisation (which includes companies, partnerships and anyone who has employees) is guilty of an offence if the way that its senior management organises its activities causes a persons death and this amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased employee. The police will investigate suspected cases under the new Act and the decision to prosecute will lie with the Crown Prosecution Service having regard to the evidence gathered by the police.
Senior management under the Act is not limited to directors. Regional managers or divisional managers of large national organisations could constitute senior managers. The test in deciding whether somebody is a senior manager is to establish whether they play a significant role in the decision making relating to the management of the organisation.
The jury in any prosecution will look at the organisations senior management as a whole when deciding whether adequate care was taken. Senior management cannot avoid prosecution by merely delegating responsibility for health and safety as the new Act places a great deal of emphasis on leadership and management of health and safety so they will need to ensure that any delegation is to the appropriate organisation and is carefully managed.
The duties owed under the new Act are not new duties; they are existing duties owed under the common law of negligence. The new Act defines certain types of duty of care which will be owed by an organisation under the law of negligence. It states clearly that a duty to provide a safe system of work is owed to employees or other persons working for the organisation (this may include contractors, secondees and even volunteers). It will be a question of law for the judge in each case when establishing whether the organisation owed a duty of care to a particular person.
Because the new offence is based on the law of negligence and not existing health and safety legislation an organisation could be prosecuted under the new Act and under existing Health and safety legislation.
What is a gross breach?
Section 1 of the new Act defines gross breach as conduct which falls far below what can reasonably be expected of the organisation in the circumstances. It is for the jury to decide in a prosecution whether there was a gross breach. In deciding this they will consider:
- Did the organisation fail to comply with health and safety law?
- How serious was that failure?
- How much of a risk of death did it pose?
The new Act goes on to provide a list of suggested factors that the jury may take into account e.g. health and safety guidance which relates to the alleged breach, attitudes, policies or systems in the organisation that may have encouraged a management failure.
The new Act clearly states that if the management of an activity includes reasonable safeguards and a death still occurs this will not result in a prosecution.
Penalties
Individuals cannot be prosecuted under the new Act so there is no penalty of imprisonment. Instead the punishment is focused on financial disaster by the imposition of unlimited fines on the organisation if convicted.
Directors can still be convicted of the common law offence of gross negligence manslaughter or held accountable under the existing health and safety legislation. The Health and Safety Executive guidelines state that individual directors will still be prosecuted where there is: "sufficient evidence and it is in the public interest to do so".
The courts can also impose a remedial order which requires the organisation to take steps to remedy any management failure that led to the death.
From mid 2009 (following publication of the sentencing guidelines) the courts will also be able to order a publicity order which requires a convicted organisation to publicise details of the conviction.
Next Steps
To reduce the risk of prosecution under the new Act you should consider the following practical steps:
Consider the joint guidance issued by the Institute of directors and Health and Safety Executive (Leading health and safety at work: leadership actions for directors and board members IND417) which is available on the HSE website (www.hse.gov.uk) and ensure that your health and safety leadership complies.
Consider whether the systems that you currently have in place have been successful so far. Can you make any improvements?
Develop an incident response plan to include details of how any internal investigations will be carried out following an incident and how you will best preserve evidence.
It may be worthwhile to carry out an independent health and safety audit.
Check whether your liability insurance covers legal costs incurred under the new Act.
Consider whether internal training is required to ensure that all employees take responsibility for improving health and safety.
For further information please contact Nicky Collins at George Davies Solicitors LLP recently commended in the Legal 500. Email: nickycollins@georgedavies.co.uk or Tel: 0161 236 8992
Disclaimer
The content of this article does not constitute legal advice. You should always consult a suitably qualified solicitor for professional advice about any specific legal matter of concern to you. George Davies Solicitors LLP, its partners and staff do not assume any responsibility for information contained within this article and disclaim all liability relating to such information.
George Davies Solicitors LLP
George Davies was highly rated, in the North West, in the 2008 Legal 500 review and in Chambers and Partners UK Directory. They specialise in all aspects of commercial law and boast a specialist niche Construction team with experience in a full spectrum of construction law services. The team was commended in the Legal 500 for its breadth of expertise, efficiency, and ability to provide specialist advice. Chambers specifically mention its achievements in Construction. Catherine Kay can be contacted on 0161 234 8861 or emailed at: catherinekay@georgedavies.co.uk.
