Focus

Corporate Manslaughter: The UK Draft Bill 2005

by Michael Welham
May 2005

There has in recent years been a chequered and grim history of fatal incidents and disasters, often with a large loss of life which has caused alarm with the public. They consider that those in senior management who had "control" of the organizations have walked away with no accountability. Since 1992 there have been 34 prosecution cases for work-related manslaughter but only seven organisations have been convicted. This continues to prompt a widespread view that the legal system is not delivering justice.

The seven successful corporate manslaughter prosecutions have one factor in common in that they are small organisations where the management has a more 'hands on' involvement. Whilst in large organizations, management is generally remote from the operations. The first corporate manslaughter prosecution occurred in December 1994 when OLL Limited (formerly Active Leisure and Learning Ltd) became the first company in English legal history to be convicted of the common law crime of manslaughter. Peter Kite, 45, its managing director, also became the first director to be given an immediate custodial sentence for a manslaughter conviction arising from the operation of a business and was sentenced to three years imprisonment (reduced to two years on appeal).

Following from that case others convicted of corporate manslaughter include Jackson Transport (Ossett) Limited, English Brothers Ltd. Denis Clothier and Sons, Teglgaard Hardwood Ltd, Nationwide Heating systems Ltd and Keymark Services. At the time of writing Gillian Beckingham a design services manager for Barrow Borough Council is on trial for seven counts of manslaughter following the deaths of seven people from legionnaire's disease emanating from the heating system in a Council controlled building. However, the Council has been acquitted of a corporate manslaughter charge. Also on trial for manslaughter are three executives from Railtrack and two executives from Balfour Beatty and Balfour Beatty is charged with corporate manslaughter. In addition to the corporate manslaughter cases ten directors have received custodial sentences for workplace offences and it is a list that is growing.

A drastic change in the law?

It was identified in the 1990s that there needed to be a drastic change in the law which resulted in the proposals of the Law Commission's 1996 report "Legislating the Criminal Code: Involuntary Manslaughter" ^[1]. This included a proposal for a new offence of corporate manslaughter including a draft Bill. The Labour government promised changes but did nothing until 2000 when they produced a consultation paper "Reforming the Law on Involuntary Manslaughter: the Government's Proposals" ^[2]. There has been no progress until 23 March 2005 when they produced a modified draft Corporate Manslaughter Bill accompanied by another consultation period.

The new law will hold organisations which have fatal outcomes accountable for gross failings by their senior management and deals with the problem of the current law, where there is the need to find a "directing mind" of a company who is personally guilty of gross negligence. In large organisations those at senior levels are seen to be remote from frontline operations even though decisions made in the boardroom affect the way in which the organisation operates. Therefore, it has been impossible to identify an individual and where prosecutions have proceeded, they have not been successful. This has not been the case with small companies where directors have more direct control over the daily activities, and they have been successfully prosecuted.

To bridge the gap the thrust of the new law of corporate manslaughter will focus on a gross failing by senior managers to take reasonable care for the safety of their workers or members of the public and cause a person's death. One area of concern for many is that the new law will not encompass individual directors as part of the corporate manslaughter prosecution. However, a case for individual manslaughter will be possible where an individual's conduct makes them liable to be charged with gross negligence manslaughter which applies where a duty of care is owed at common law. The ordinary rules of causation will apply and management failure must have been more than a minimal contribution to the death and that a break in the chain of events did not intervene in the linking of management to the death.

Management needs to identify that the new offence is based on failures in the way an organisation's activities are managed or organised and understand, that "management failure" focuses on the systems and practices for carrying out the organisation's work. Therefore, the legislation is designed to capture corporate failings in the management of risk and applies to failings by an organisation's senior managers, either individually or collectively. This means that the offence is not limited to questions about the individual responsibility of senior managers, but instead considers wider questions about how, at a senior management level, activities were organised and managed.

The new Bill encompasses corporations and Crown bodies but not unincorporated bodies such as partnerships, trade unions and some registered friendly societies because they do not have a distinct legal personality. It is because they do not exist as a legal entity in the way that corporations do they cannot be prosecuted for gross negligence manslaughter, although importantly individual members can and that will remain the case.

Those who advocate a "director in the dock" as part of the corporate manslaughter offence will not be satisfied with the new law. However, individuals in any capacity whilst in a workplace activity can be liable to prosecution for gross negligence manslaughter, with a custodial sentence available. In the case of directors, disqualification proceedings under existing legislation will also be an option and the law already exists for that action.

A director can be readily identified as having responsibilities however; there is the question of the identity and culpability of a senior manager following a fatality. To apportion blame that person will need to be identified as making management decisions about, or actually managing, the activities of the organisation as a whole or a substantial part of it. The role will be "substantial" and that will be important for any investigation to determine the level of management responsibility and involvement. For example the situation where the management at regional level within an organisation such as a company with a national network of operations, abides by management decisions of policy and procedures devolved from head office. In this situation the focus of the investigation will include the head office as well as the regional management to identify failings. In a smaller organisation where management's involvement will be more hands on, the responsibility for management failings will be more identifiable.

Serious Offence

Corporate manslaughter is a serious offence under the general criminal law and it is not regulatory such as a breach of health and safety legislation. This means that the police will investigate corporate manslaughter cases and the Crown Prosecution Service will prosecute. The health and safety enforcing authorities will provide support to the investigation and there is already in place an established protocol for liaison between the relevant parties.

For those found guilty of corporate manslaughter the sanction will be an unlimited fine and that can be set at a very high level. In addition to the fine, the courts will be able to impose remedial orders, to be addressed within a specified time. For the offending organisation that could be very costly and in some cases the combination of a fine and the cost of putting things right may render the company insolvent. It will not be the aim of the courts to dissolve a company but if it is so deficient in the management of health and safety, it may have no option.

There is the question as to what cost an organisation will have to expend to meet the health and safety standards so as not to be prosecuted for corporate manslaughter. The answer is that if an organisation has systems in place to meet current health and safety law it would have little additional expenditure. In the event of a fatality the investigation will focus on the management system and management involvement and so ongoing evidence of compliance will be a positive approach. Those companies who pay little notice to or have limited health and safety procedures can expect to spend more in ensuring that they meet the requirements of health and safety legislation.

Current situation

The situation at the time of writing is that the draft Corporate Manslaughter Bill is published for pre-legislative scrutiny by Parliament, a process under which a Parliamentary committee or committees consider the draft legislation and makes recommendations. The Government also seeks responses from industry, trades unions and other interested parties by June of this year. The new law will apply to England and Wales and it is anticipated that both Northern Ireland and Scotland will enact similar legislation.

References:

The Law Commission's report Legislating the Criminal Code: Involuntary Manslaughter, 1996, Law Commission No 237, HMSO.
Reforming the Law on Involuntary Manslaughter: the Government's Proposals, 2000, The Home Office. Draft Corporate Manslaughter Bill, March 2005

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Michael Welham is a Director of Total Control Risk Management. He specialises in corporate manslaughter and the audit - development and leadership in safety management systems. He is an UK ex Health and Safety Executive (HSE) Principal Inspector and was a member of the HSE's Manslaughter at Work working group. He speaks at seminars, conferences and management development events on the subject corporate manslaughter and runs specialist 'understanding corporate manslaughter' workshops. He is the Author of Tolley's Corporate Killing - A Managers Guide to Legal Compliance and co-author of The Poacher and the Gamekeeper - Leadership for Risk Mitigation in Occupational Health and Safety.

Mike will be speaking at EurOhse2005 Conference - for details see www.eurohse2005.com