corporatemanslaughter
get yourself
ready for the act
The Forum for Small Business discusses the new Corporate
Manslaughter Act and gives some tips on how to deal with it
The Corporate Manslaughter and shows that the organisation failed to Not only does the law increase the
Corporate Homicide Bill, which comply with any health and safety pressure on UK boardrooms, but
comes into force on April 6, means legislation that relates to the alleged businesses will need to take a fresh
that companies and other breach and, if so, how serious that look at whether they are covered
organisations face unlimited fines if failure was and how much of a risk of financially for the worst.
they are found to have caused death it posed. Astandard Directors’ and Officers’
death due to gross corporate The jury may also consider the (D&O) insurance policy will only
failures in health and safety. extent to which the evidence shows provide cover for a senior individual
Under this new legislation, instead that there were attitudes, policies, within a company being prosecuted for
of prison sentences for managers systems or accepted practices within management failure leading to a death
found to be guilty, the businesses the organisation that were likely to of an employee or a third party. It will
themselves would face a potentially have encouraged any such failure. not cover the costs of the company’s
unlimited fine if their senior managers It is wise for organisations to keep defence of such an allegation and the
permitted a ‘gross breach of any duty their procedures under review, wider stigma of being associated with
of care’ which led to a death. especially those with direct health and a negligent individual.
The Act creates a new statutory safety implications. Successful As well as having to cope with
offence of corporate manslaughter defences to charges of corporate expensive legal bills, companies
(corporate homicide in Scotland), manslaughter will inevitably depend facing legal action under the new Act
which will occur if a death results from on being able to demonstrate that the risk their reputation being damaged,
a gross breach of a relevant duty of organisation takes a responsible and the day-to-day running of their
care which is owed to the deceased attitude to health and safety, with business being disrupted.
by the organisation concerned. The appropriate risk management Recent research conducted by
Act defines a breach of a duty of care procedures in place that are enforced Hiscox insurance found that
by an organisation as a ‘gross’ breach rigorously. compliance with UK company law is a
if the alleged conduct amounts to a It is estimated that the new Act significant concern for nearly two
breach of that duty and falls far below could potentially cost UK plc £21.2m thirds of smaller businesses, while a
the standard that can reasonably be in legal bills. Currently, more than 50 third of SMEs are concerned that their
expected of the organisation in the per cent of employers have admitted business could become a victim of the
circumstances. that they are not ready for the UK’s growing compensation culture.
In future, successful prosecutions introduction of the new law. We don’t yet know how often or
will be achieved when it shows that Any person given health and how rigorously judges will implement
the failure within the organisation safety responsibilities will need to be this law, but one thing very clear is
came from the way in which its competent and have sufficient that the Act is going to be another
activities are managed or organised, authority to ensure that risks are worry to add to the many already
that this caused a person’s death and properly managed. faced by businesses.
amounts to a gross breach of the More than ever, company directors However, it’s essential that
company’s duty of care to the will need to have a role in promoting companies stay abreast of the ever-
deceased. health and safety management changing regulatory environment and
Section 8 of the Act specifically because of the need to demonstrate use the coming months to prepare for
requires the jury sitting in these cases that there existed a health and safety the introduction of the Corporate
to consider whether the evidence compliant culture. Manslaughter Act.
34-35
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