Companies and organisations can now be found guilty of corporate manslaughter if the way in which their activities are managed or organised causes a death and amounts to a gross breach of a relevant duty of care.

Prior to the introduction of this act, organisations could be convicted of manslaughter (or in Scotland culpable homicide) only if there was a ‘directing mind’ at the top of the company that was personally liable.

There have been numerous high profile failed prosecutions for corporate manslaughter over the last 20 years, including actions arising out of the Zeebrugge ferry disaster and the Hatfield train crash.

This act provides an opportunity for an organisation’s liability to be assessed on a wider basis ensuring a more effective and fairer means of accountability.

Importantly, the courts will look at whether or not a substantial part of the breach of duty of care was the way in which senior management managed the activities. It is a very serious offence that will be reserved for the very worst cases of corporate mismanagement leading to death, but the chances of a successful prosecution under this act are much greater.

The Corporate Manslaughter and Corporate Homicide Act came into force in 2008. The majority of the act came into force on 6 April 2008 and applies across the UK. The act is not retrospective.

The act applies to all companies incorporated under companies’ legislation, and other corporate bodies, operating in the UK in the private and public sectors.

It also applies to partnerships, trade unions and employers’ associations (if they are an employer), government departments and police forces.

It is important to note the act applies to all companies and corporate bodies operating in the UK, whether or not they are incorporated in the UK.

There are some exemptions for certain public and government functions whose management involves public policy decisions and the exercise of core public functions that are already subject to other forms of accountability.

However, the act largely removes the crown immunity that applied to the previous common law corporate manslaughter offence. This is consistent with the government’s and the Health and Safety Executive (HSE)’s policy to secure the eventual removal of crown immunity for health and safety offences.

The act also provides for the range of organisations caught by the legislation to be extended. Any organisation not yet caught should keep a carefuleye out for any extensions to the provisions. Section 2(1) (d) of the act is not yet in force but it provides that a duty of care owed by a custody provider is a ‘relevant duty of care’ and will be caught by the act once this section is enacted.

The government is committed to implementing this section within three to five years of the act’s implementation. This will cover, among others, those held in custodial institutions or in custody areas of courts and police stations, those placed in secured accommodation and detained patients.

The act applies to all companies and corporate bodies operating in the UK, whether or not they are incorporated in the UK.

The act does not impose any new duties or obligations on employers. Employers need to continue following the existing health and safety requirements so it is important to identify all the relevant existing legislative requirements and make sure that there are systems in place to ensure they are complied with and that compliance is monitored.

The test is how the fatal activity was managed or organised throughout the organisation. The courts will look at systems and processes across the organisation for managing safety, the adequacy of equipment, the level of training, supervision and how systems were carried out in practice.

A substantial part of the failure within the organisation must have been at a senior level, meaning those people who make significant decisions about the organisation.

Corporate manslaughter/ homicide is not part of current health and safety law, but was welcomed by the HSE which believe it introduced an important new element in the corporate management of health and safety.

The new offence therefore complements the existing health and safety legislation and is specifically linked to it. When a prosecution is brought under the new act, juries will consider any breaches of health and safety legislation when determining liability under the act. They may also consider whether any appropriate health and safety guidance was followed.

The police will i­nvestigate any suspected cases of corporate manslaughter and the Crown Prosecution Service in England and Wales will prosecute.

This role will be undertaken by the Crown Office and Procurator Fiscal Service in Scotland and the Director of Public Prosecutions in Northern Ireland.

There is no individual responsibility as the offence is aimed at cases of management failures across an organisation. Prosecutions of partnerships will be brought in the name of the partnership and not individual partners.

It is important to note that directors, board members or other individuals can still be prosecuted for gross negligent manslaughter/culpable homicide and for health and safety offences under other legislation.

­­Organisations should keep their health and safety management systems under constant review, in particular the way in which their activities are managed and organised by senior management, and amend their systems as appropriate.

There are three penalties.

1. Unlimited fine. The Sentencing Advisory Panel (SAP) guidelines propose that companies found guilty of corporate manslaughter or health and safety offences causing a fatality should be fined by reference to the organisations annual turnover.They suggest between 2.5 per cent and ten per cent of annual turnover for corporate manslaughter and between one per cent and 7.5 per cent for fatalities caused by breach of the Health and Safety at Work etc Act 1974 (HSWA).

There have been a number of large fines imposed in the UK. The highest fine for breach of health and safety was £15m levied on Transco following the death of a family of four in Scotland in 1999. It is interesting that the fine represented less than one per cent of Transco’s annual turnover so the SAP proposals shows a much tougher approach with substantially increased fine levels. It is important to note that insurance does not cover criminal fines.

2. Publicity order. As yet the provisions relating to this are not yet in force but the plan is to order organisations to publicise details of their conviction and fine in a manner specified by the court, for example letters to clients, advertisements in the popular media and letters to shareholders.The final guidance on the use of publicity orders is expected early this year and this provision will then be brought into force.

3. Remedial order. This requires the organisation to take steps to address the failures behind the death. These penalties are seen as being a much  tougher approach than the existing HSWA convictions and improvement orders for a number of different reasons.

These include:

• negative publicity/damage to reputation and future business
• fines that will far outstrip those for breaches of health and safety legislation
• costs of remedial order
• investigations could last years generating bad publicity for much longer

The Ministry of Justice has publish­ed a leaflet: Understanding the Corporate Manslaughter and Corporate Homicide Act 2007. The leaflet provides a general introduction to the act and explains how the offence of corporate manslaughter/homicide works and where it will apply. All employers, senior  managers and others seeking an overview of the new legislation should ensure they have a copy of the act. It is available at www.justice.gov.uk

For more detailed guidance upon implementation of the act, the Office of Public Sector Information has published a 21-page guide Reforming Corporate Liability for Work-related Death: A Guide to the Corporate Manslaughter and Corporate Homicide Act 2007. It is available at www.opsi.gov.uk

The Institute of Directors and the HSE have published guidance for directors on their responsibilities for health and safety Leading Health and Safety at Work: Leadership Actions for Directors and Board Members. It is available at ­www.hse.gov.uk