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Jonathan Grimes   of law firm Kingsley Napley LLP writes in People Management that senior management have found themselves in the dock alongside their companies and in particular cites relatively small owner-managed businesses as being the sort of firms that end up in court facing Corporate manslaughter charges.

“The Corporate Manslaughter and Corporate Homicide Act was designed to establish corporate criminal liability where it can be shown that the way an organisation’s activities were managed or organised by its senior management was a substantial element in causing a person’s death, amounting to a gross breach of a duty of care owed to that person.“  The offence only applies in circumstances where an organisation owed a duty of care to the victim under the law of negligence (reflecting the position under the common law offence of gross negligence manslaughter and alos sets out the broad scope of the offence.  This, Jonathan Grimes writes, means the Act applies to “senior management who play a significant role in making decisions about, or managing the whole or a substantial part of, the organisation’s activity.”

At the same time the Act specifically excludes any rule of the common law that has the effect of preventing a duty of care from being owed by one person to another by reason of the fact that they are jointly engaged in unlawful conduct AND any such rule that has the effect of preventing a duty of care from being owed to a person by reason of his acceptance of a risk of harm.

Accorindg to grimes, “there is evidence that charges are beginning to gather pace and for the time being, it appears that cases will be limited to smaller companies, but, as the police and CPS gain confidence in using this legislation, larger companies are likely to be targeted.”

The first case, Cotswold Geotechnical Holding resulted in a conviction in 2011 and since then two more companies, JMW Farms and Lion Steel, have been convicted. But warns Jonathan “there is evidence of an increase in cases ­with five new cases have been charged since July last year. The Crown Prosecution Service (CPS) is currently reviewing a number of new cases and it is inevitable that further companies will be charged this year.”

Historically, prosecutions of senior managers for either gross negligence manslaughter or health and safety have been few and far between, but this may no longer be the case. Without the Act, it is most unlikely that Lion Steel would have been prosecuted for corporate manslaughter or, significantly, that its directors would have faced prosecution for gross negligence manslaughter. In looking at the company’s potential manslaughter liability, the police and CPS are invariably drawn to consider the position of the individuals at a senior level in the company who may have been at fault, because the Act requires this. It is, therefore, on their actions that the spotlight will fall.

Who owes this duty of care?

An organisation (see the Act for exceptions) is guilty of an offence ONLY if the way in which its activities are managed or organised by its senior management is a substantial element in the death of a person’s death AND  that way mounts to a gross breach of a relevant duty of care owed by the organisation to the deceased.

In determining guilt or inocence it falls to a jury to decide whether there was a gross breach of a duty.   In doing so they will consider whether the evidence shows that the organisation

  1. failed to comply with any health and safety legislation that relates to the alleged breach, and if so—
    1. (a)how serious that failure was;
    2. (b)how much of a risk of death it posed.
  2. The jury may also—
    1. consider the extent to which the evidence shows that there were attitudes, policies, systems or accepted practices within the organisation that were likely to have encouraged any such failure as is mentioned in subsection or
    2. to have produced tolerance of it;
  3. have regard to any health and safety guidance that relates to the alleged breach and any other matters they consider relevant.

Health and safety guidance includes any code, guidance, manual or similar publication that is concerned with health and safety matters and issued by an authority responsible for the enforcement of any health and safety legislation.  But it need not be breach of a stautory provisionm (i.e. the act complained of need not be an illegal act)!

There is no individual liability, such as aiding, abetting, counselling or procuring the commission of an offence of corporate manslaughter or the commission of an offence of corporate homicide.

In addition to guilt of a responsible person, such as a Director, the firm may also be subject to a remedial order requring some action to be fixed; breach of which carries a fine.

Section 10 of the Act also enables a court to order a convicted organisation to publicise (in a manner specified by the court) the convition, particulars of the offence, the amount of any fine imposed and the terms of any remedial order that has been made.  Non-compliance with an order is punishable with an unlimited fine.

What SME’s do to help protect themselves?

Writing in People Management Jonathan suggests that ‘senior managers should; 

  1. understand those aspects of their roles that may relate to health and safety and may, therefore, expose them to personal criminal liability,
  2. ensure their organisations resource these roles adequately,
  3. ensure there is appropriate legal expense insurance that funds representation, and,   
  4. HR departments keep up to date with developments in this area as the Act’s consequences become clear.’

Need profesisonal advice:

Jonathan Grimes is Partner and health & safety law expert and Richard Fox, Partner and Head of Employment at Kingsley Napley LLP