After a long delay, in March this year the UK Government finally published its draft Bill to reform corporate manslaughter law. The consultation period ended in June and responses are now to be scrutinised by Parliamentary Committee, before the final Bill is put before Parliament for passing into law. While reform of this area of law has been broadly welcomed by businesses, will the new Bill achieve its objectives?
The proposals are significantly watered down from the original 1996 Law Commission recommendations but, in essence, seek to make the offence of corporate manslaughter easier to prove against organisations.
The Government has clearly taken on board the concerns of business about targeting individual directors with prosecution and imprisonment for corporate manslaughter, which, business had argued, would have stifled innovation, made scapegoats of individuals and would have restricted good health and safety practice.
Importantly, previous proposals for new manslaughter offences against individuals have been shelved. Individuals can still be prosecuted for manslaughter under existing law, but the proposed new law does not make it any easier to do so.
The Bill's key proposal is for a single new offence of corporate manslaughter to make companies and other organisations, including local authorities, NHS Trusts and various Crown bodies, criminally liable for corporate manslaughter where gross senior management failures have caused a death. The penalty on conviction will be an unlimited fine. The creation of a level playing field, by the removal of Crown immunity, has been broadly welcomed by business.
The Government says the new offence is designed to capture the very worst of corporate failings and to complement existing health and safety regulations.
It recognises the importance of achieving the right balance between the new offence and the existing regulations. Although the Government predicts the new offence will only result in a handful of additional cases per year, this could prove to be a considerable underestimate. Much is likely to depend on the prosecution policy adopted for the new offence.
The proposed new offence seeks to attribute liability to an organisation in a different way from the current law. It removes the 'identification principle', whereby the prosecution must identify a 'controlling mind' within an organisation, who is personally guilty of manslaughter, before the organisation itself can be found guilty. This has been the stumbling block that has prevented successful prosecutions against large companies to date.
In the Barrow-in-Furness legionnaires' disease manslaughter case in March 2005, the case against the borough council was dismissed, as the architect responsible for maintaining the equipment that caused the outbreak was not sufficiently senior to be the council's 'directing mind'. The Hatfield train crash manslaughter prosecution has also recently collapsed on similar grounds.
Under the new offence, an organisation will be guilty of corporate manslaughter if the way in which any of its activities are managed or organised by its senior managers: (a) causes a death; and (b) amounts to a gross breach of duty. It therefore retains key elements of the existing law, replicating in large part the criteria established by the House of Lords in R v Adomako (1995) for securing convictions for gross negligence manslaughter.
However, in an attempt to set out a clearer framework for assessing an organisation's culpability, the draft Bill seeks to define in statute who will be construed as senior managers, the sorts of activities that will be covered and what will be considered a gross breach of duty, in order to secure a conviction.
But are these criteria sufficiently robust and clear to be workable and fair in practice, particularly given the varied nature and size of businesses?
For the purposes of the offence, a 'senior manager' must play a significant role in either: (a) making decisions about how the whole or substantial part of the organisation's activities are to be managed or organised; or (b) actually manage or organise the whole or substantial part of those activities.
The offence is targeted at senior management's failing, not the junior level, so organisations still cannot be convicted for manslaughter based on the activities of lower level management. However, they could now be convicted on the activities of managers at a lower level than the 'controlling mind' necessary under the current law. Responsibility is moving down the management structure.
An organisation's size will also be significant in determining whether the management of particular activities or operations are sufficiently senior to be caught by the offence. Smaller organisations with flatter management structures may be more exposed, as under the existing law.
It is intended that the conduct of senior management will be viewed collectively, as well as individually. The legislation seeks to remove the existing rule against aggregation so that the culpability of any number of senior managers can be combined to determine whether management in general has acted in gross dereliction of its duty.
Given the way the offence is framed, is there a danger that some companies may be tempted to re-organise to make their business units more autonomous?
Will they seek to delegate health and safety responsibilities to lower management to reduce the risk of prosecution?
The Government's position is that the prosecution will merely have to prove that management failure has made more than a minimal or material contribution to the death, and that an intervening event, such as an employee's act, would only break the chain of causation if it was extraordinary or unforeseen. This is likely to be fertile ground for legal argument.
Take, as a less obvious illustration, the well publicised case of an NHS Trust which was served with an Improvement Notice for failing to implement systems to manage stress in the workplace. What would have happened if that had led to a person suffering a psychiatric injury from stress or bullying, resulting in suicide? Could that death be said to have been caused by management failure? Or would the suicide be unforeseeable and break the chain of causation? Could (or should) the new offence be used against an organisation in these circumstances?
Additionally, what if a transport business fails to implement a proper system to manage its drivers' working hours and a driver negligently, perhaps fatigued at the end of a long shift, kills someone on the road?
Could it be said that the management failure has caused the death or does the driver's negligence break the chain of causation? Could (or should) the organisation be prosecuted for corporate manslaughter?
Under the new proposals, an organisation commits a gross breach of duty if its failure constitutes conduct falling far below what can be reasonably expected in the circumstances. This is for the jury to decide. They will have to take into account:
- how serious the failure was
- whether there was a profit motive behind the breach
- if the organisation knew, or ought to have known, it was failing to comply with its health and safety duties
- if it failed to comply with previous warnings and had previous relevant health and safety convictions
- any other matters that are relevant.
The intention is to target the most serious management failings, but the term 'falling far below' is imprecise. Will the threshold be set at a level sufficient to discourage attempts to use this offence against organisations where it is not warranted?
Duty of care
The definitions here are predictably wide, with no real surprises. They cover:
- employers and occupiers
- organisations supplying goods and services or performing commercial activities.
The offence will apply to Crown bodies, although there are certain exemptions.
In this way, the offence is intended to create a level playing field between public and private sectors.
The offence also targets parent companies and subsidiaries, where it can be shown that those companies owed a duty of care to the victim and a gross management failure by senior managers caused the death. This reflects the Government's intent to avoid companies ring-fencing their riskier businesses via subsidiary companies.
While the proposed new offence does not apply to individuals, they do remain liable to prosecution for individual gross negligence manslaughter under existing health and safety law, in particular under sections 37 and 7 of the Health and Safety at Work Act. Directors can also be disqualified under the Company Directors Disqualification Act 1986.
Where the underlying cause of a death is due to management or systems failure, the prosecution is likely to target the company. Individual offences are only likely to be used in the clearest circumstances where individuals committed an act of gross negligence directly causing death. Front line workers and also managers and directors of smaller organisations will remain particularly exposed.
Unions have argued that management failure should be a defence for any front line worker charged with killing by gross carelessness. It is not a statutory defence under the new proposals, but clearly one that would be run by someone faced with an individual manslaughter charge.
It is likely that in many cases, the prosecution will decide either to prosecute the company or an individual for manslaughter, rather than both.
If they did choose to prosecute both, the case would be extremely contentious, with individuals and company seeking to blame each other.
Lesser charges under health and safety legislation will be brought alongside manslaughter charges.
Given the the potential for reputational damage from a corporate manslaughter conviction, and the high fines the offence is likely to attract, these cases will be hotly contested. Organisations may be willing to accept a breach of health and safety offence, but they are less likely to submit on a corporate manslaughter charge, and some long drawn out and high profile cases are likely. Hopefully the police (who will continue to investigate these cases), and the CPS will reserve the use of this offence for the most serious and obvious cases. The safety valve is that no prosecution can be brought under the new offence without the Director of Public Prosecution's consent.
The concerns will centre on whether, in commercial reality, the proposals are workable and will be consistently and fairly applied to all organisations, large or small, given the stigma of a corporate manslaughter conviction and the large fines that it will attract.
While the Government's Regulatory Impact Assessment anticipates that there will be a modest increase in costs resulting from the implementation of the new offence, it is notoriously difficult to estimate such things accurately, as there are often hidden costs in compliance. It is to be hoped that these will not have a knock-on effect on the ability of businesses to continue to compete in the market place.
Employers would be well advised now to review their organisational structures and their procedures for implementing and monitoring safe systems of work to minimise the risk of a high profile corporate manslaughter prosecution, in the unfortunate event of a work-related death.
Andrew Stokes is a litigation partner and head of the safety, health and environment group at national commercial law firm Beachcroft Wansbroughs, Tel: 0117 918 2135.