Corporate Manslaughter & Corporate Homicide Act 2007

The Corporate Manslaughter and Corporate Homicide Act 2007 introduces a new offence within England, Wales, Scotland and Northern Ireland for prosecuting companies and other organisations where there has been a gross failing, throughout the organisation, in the management of health and safety resulting in fatal consequences.

The Act received Royal Assent on the 26th July 2007 and will come into force on the 6th April 2008 (with the exception of the provisions relating to deaths in custody). Under the new Act companies, organisations and Government bodies face an unlimited fine if they are found to have caused death due to their gross corporate health and safety failures.

The Corporate Manslaughter and Corporate Homicide Act 2007:

• Will make it easier to prosecute companies and other large organisations when gross failures in the management of health and safety lead to death by delivering a new, more effective basis for corporate liability;
• Has reformed the law so that a key obstacle to successful prosecutions has now been removed. It means that both small and large companies can be held liable for manslaughter where gross failures in the management of health and safety cause death, not just health and safety violations;
• Complements the current law under which individuals can be prosecuted for gross negligence manslaughter and health and safety offences, where there is direct evidence of their culpability. The Act builds on existing health and safety legislation so the new offence does not impose new regulations on business;
• Lifts Crown immunity to prosecution. Crown bodies such as Government departments will be liable to prosecution for the first time. So the Act will apply to companies and other corporate bodies, in the public and private sector, Government departments, police forces and certain unincorporated bodies, such as partnerships, where these are employers.

Previous Liabilities

Under the legislation prior to the Corporate Manslaughter and Corporate Homicide Act, and following a work-related death, individuals and companies could have been held accountable by virtue of the common law offences of manslaughter and corporate manslaughter, respectively. In order for a company to have been convicted of corporate manslaughter, the death must have resulted from an individual's gross negligence (and not necessarily an intention to kill or cause serious injury) and that individual must be identified as embodying the company itself such that they are the "directing mind" of the company.

The previous legislation linked a company's guilt to the gross negligence of a person sufficiently senior that his or her state of mind is effectively also that of the company. Thus the guilt of the individual and of the company went hand in hand. Establishing liability for common law corporate manslaughter is accordingly not as difficult in the case of a smaller company, where it is often easier to identify the "directing mind" of the company. Convictions of large corporations have proven difficult, as it is often almost impossible to identify their "directing mind" due to fragmented responsibilities. Proposals to make it easier to convict companies, and/or their individual directors or officers, of manslaughter have therefore been under discussion for some time.

Until now, manslaughter has been a common law offence, i.e. one based on case law, not statute. By definition, it is 'unlawful killing where the defendant does not have any intention to kill'. Due to the fact that manslaughter was based on legal precedent rather than statute, developments in the law have made it increasingly difficult to charge a corporate body with the offence.

The new Act provides that an organisation will be guilty of corporate manslaughter if an organisational or gross management failing causes a person's death. This means that the actions of senior management below director level can still be deemed to be the actions of the organisation. Management failings can be aggregated together between an organisation's senior managers, without the need for a specific individual having to be the directing mind to be guilty of gross negligence manslaughter.

Senior Managers

Senior managers are defined as persons who play significant roles in the making of decisions about how the whole or a substantial part of the company's activities are to be managed or organised. "Senior management" therefore encompasses two distinct areas of management responsibility; those who play significant roles in operational management and those involved in board level strategic decisions.

The "senior management" of an organisation is defined in the Act within section 1(4)(c) as:

"... the persons who play significant roles in-

1. the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or
2. the managing or organising of the whole or a substantial part of those activities."

Two specific elements of management responsibility are covered: taking decisions about the organisation of activities and the actual management of those activities. This seems to extend the definition of 'senior manager' to encompass 'operational managers' alongside strategic decision-makers.

There is no longer a requirement to identify a single director or manager with the "directing mind" of the organisation in order to secure a conviction. Instead, a jury will be required to look at the combined failings of the "senior management". In theory, this should prevent large organisations from evading liability by relying on the fact that no one individual has authority to make the decisions in question.

It is important to note that this new "management failure" test applies to the organisation or management of activities by senior managers. The intention is not to base liability on failures occurring only at a localised or junior level. When the Bill was first introduced, it was thought by some that the requirement for management failure at senior level may allow organisations to circumvent liability for corporate manslaughter by delegating safety responsibilities to employees below its senior management.

However, the broad definition given to "senior management" by the Act seems to guard against this possibility.

The Prosecution

Under the new Act, the common law offence of corporate manslaughter is abolished and replaced with a new statutory offence. The new offence removes the requirement to first convict an individual who can be identified as the "directing mind" of the company. Instead, the focus has shifted onto senior management collectively and a much broader investigation into the way in which an organisation's activities have been managed or organised as a whole is required.

Section 1(1) of the Act provides that:

"An organisation to which this section applies is guilty of an offence if the way in which its activities are managed or organised-

1. causes a person's death, and
2. amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased."

Section 1(3) of the Act provides 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 breach referred to in subsection (1)."

It follows that numerous matters must be established in order for a prosecution to be successful.

To establish whether an organisation is guilty of the offence of corporate manslaughter the offence must comprise of two elements. The first is that a management failure must have caused the death. The second element relates to the 'relevant duty of care' which the organisation owed to the deceased. Such a duty can arise from an organisation's role as employer, occupier, supplier of goods or services, constructor or maintainer, or keeper of any plant, vehicle or other thing. This duty of care is also sufficiently wide to encompass most activities that a local authority or NHS Trust will engage in.

Once the duty of care has been proven, the prosecution must demonstrate gross breach of that duty. Such a failure is defined as conduct which 'falls far below what can reasonably be expected of the organisation in the circumstances'.

To assess this, the new law requires a consideration of the organisation's compliance with health and safety legislation and guidance. Rather than consider the knowledge and motives of senior managers, the risk of death from any failure to comply with legislation will be evaluated in the first instance.

Attention will then be given to the attitudes, systems, policies and accepted practices within the organisation that may encourage or tolerate non-compliance with the legislation in order to ascertain how serious the failure was.

Organisations

The Act is stated to apply to "organisations". An "organisation" includes a company (wherever incorporated), government entities specifically listed in Schedule 1 to the Act, and the police force. Partnerships (including limited liability partnerships), trade unions and employers' associations also fall within the definition of "organisation", so long as they are employers. In the case of partnerships, the Act specifies that proceedings are to be against the partnership rather than any individual members, and that any fine is to be paid out of the funds of the partnership.

Despite the Act's focus on "senior management" it expressly provides that an individual cannot be guilty of aiding, abetting, counselling or procuring the commission of an offence of corporate manslaughter. Individual directors and managers therefore cannot be held liable for corporate manslaughter under the Act.

However, an individual may still be liable for the existing common law offence of manslaughter. Whilst the new law replaces entirely the existing common law offence of corporate manslaughter, it sits alongside and does not affect the existing laws relating to individuals.

Relevant duty of care

The Act provides that an organisation must owe the deceased a "relevant duty of care" under the law of negligence, and specifies the following particular duties:

• a duty owed to an organisation's employees or other persons performing services for the organisation;
• a duty owed as an occupier of premises;
• a duty owed in connection with the supply by the organisation of goods or services, or in connection with the carrying out by the organisation of any construction or maintenance operations or any other activity on a commercial basis, or in connection with the use or keeping by the organisation of any plant vehicle or any other thing; and
• a duty owed to a person who is being held in lawful detention or custody.

Whilst the above list is exhaustive, it is also wide-ranging. It is clearly difficult to define a duty of care to apply universally to all organisations, given the differing nature of the organisations to which the new offence of corporate manslaughter will apply. The definition under the Act therefore relies on the principles of negligence and on existing health and safety legislation. It will be left to the courts to interpret how the relevant duty is to be applied in practice.

It is also important to note that the offence is related to a gross breach of the organisation's duty of care to the deceased. As such, there will be no prospect of liability for a parent company for the faults of a subsidiary, unless the parent company itself owes a duty of care to the deceased.

Establishing a duty

Whether or not the organisation in fact owes a duty of care in a particular case will ultimately be for the judge to decide at trial.

The Act makes it clear that it will be no defence to assert that the deceased willingly accepted the risk of harm. Similarly, rules of law that would prevent a duty being owed by one person to another because they were jointly engaged in unlawful conduct will not apply to this offence.

The Act specifies that a breach is a "gross" breach if the conduct alleged to amount to a breach falls "far below what can reasonably be expected of the organisation in the circumstances".

Section 8 of the Act sets out two categories of non-exhaustive matters that the jury should take into account when considering whether there has been a "gross breach" of a relevant duty of care.

The jury must consider whether the evidence shows that the organisation failed to comply with any health and safety legislation relating to the alleged breach and if so how serious the failure was and how much of a risk to death it posed.

Under section 8(3), "the jury may also:

1. consider (amongst other things) the extent to which the evidence shows that there were attitudes, policies, systems or accepted practices within the organisation which were likely to have encouraged any such failure or to have tolerated it; and
2. have regard to any health and safety guidance that relates to the alleged breach."

Penalties

The sanction for the new offence of corporate manslaughter is an unlimited fine which will be set by the judge, not the jury.

Where an organisation is convicted of corporate manslaughter or corporate homicide the court may also impose an order requiring it to remedy (within a specified period) certain matters including the breaches which led to the death. Failure to comply with a remedial order is punishable by a further fine.

In addition, the court may require a convicted organisation to publicise in a specified manner the fact of the conviction, details of the offence, and the amount of any fine and the terms of any remedial order made. Failure to comply with a publicity order can also result in an unlimited fine.

Guidance on the levels of fine to be imposed by the Courts is still under discussion, but could be up to 10% of an organisation's turnover.

Summary

1. The Corporate Manslaughter and Corporate Homicide Act 2007 replaced the old common law offence of corporate manslaughter.
2. Conviction for the new statutory offence is a more likely prospect for most organisations than conviction for the previously existing common law offence of corporate manslaughter.
3. All organisations face possible conviction, regardless of size, method of incorporation or group structure.
4. Compliance with health and safety legislation and guidance will need to be demonstrated to achieve a defence.
5. Criminal liability is possible whenever a civil law duty of care is seriously breached.
6. Overseas organisations are within the scope of the Act.
7. Fines are unlimited and likely to be high.
8. Prosecuting authorities are likely to be keen to secure convictions.