9 July 2001
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10 April 2014
Consider a legal reform that is still two or more years away from coming into effect. It will involve detailed changes to an already complicated law and will affect directly very few companies. It seems unlikely that such a change would warrant any serious attention at the moment, but the proposals to reform the law of corporate killing are inducing collective horror in the minds of many directors and officers of some of the UK's leading companies. The changes mean that the UK would at last have a viable offence for the punishment of lethal management failures.
In English legal history, only three successful prosecutions for corporate manslaughter have ever been brought, none of them in connection with any of the high-profile disasters where one might expect that such a law would most often be invoked. To understand the ramifications of the changes, it is worth considering the existing provisions. But companies and their directors should not simply stand still, waiting to be caught in the headlights of this fast-approaching juggernaut. There is useful lobbying work that can be done and companies will also need to reconsider their management and cultural approaches to securing public and occupational health and safety.
Under current law, corporate manslaughter is an aspect of the offence of involuntary manslaughter invoked where death is caused through some unlawful, reckless, or grossly careless act or omission. The problem with this law is the identification principle, which means that the corporate entity can only be prosecuted where an individual who is the embodiment of the company - essentially one of its directors or senior managers - commits an act that satisfies the requirements of manslaughter.
Companies tend to operate a business version of the concept of subsidiarity, where operations are delegated to the lowest viable level within the company. Cynically, one might say that the current focus on corporate governance has improved the ability of companies to evidence the board's knowledge of operational risk without necessarily increasing that knowledge. It has even been said that the law operates as an incentive to manage health and safety badly, because the better it is managed - an outcome of having a knowledgeable and responsible senior management - the more material is the risk of corporate and individual liability. A truly damning indictment of the current law.
The new reforms sidestep the identification principle by focusing on management failure. There will also be new offences for officers of the company and few doubt that the result of the reforms will be to make the prosecution's task easier.
|"In a poll, 40 per cent of those asked said they believed it was very or fairly likely that directors would resign rather than take on responsibility"|
Businesses should look hard at those parts of the law which are likely to have the greatest impact on them and consider lobbying for changes. At a recent British Safety Council conference it was apparent that details of the law are yet to be settled and there is still much to play for. Indeed, some of the examples discussed at the conference raise issues that the Government will need to look at carefully. Will the law stretch to NHS Trusts, which in times of tight resources make decisions every day that might have dramatic consequences? Is the full rigour of the law for corporate killing appropriate for the emergency services? Can it be used to prosecute employees, companies or directors as a result of the very large number of work-related deaths that continue to occur on our roads?
The Government should think very carefully about providing guidance on what is meant by the term 'management failure'. Keith Bradley, a minister at the conference, suggested that the issue be resolved by expert evidence, but this needs some careful thought. The expert evidence of engineers and occupational health specialists, who describe what is technically achievable to secure health and safety, has long been a part of regulatory prosecutions under the Health and Safety at Work Act 1974. What would be more controversial would be to allow expert evidence on the fundamental point at issue, that of the seriousness and existence of a management failure. Is it really intended that captains of industry - one acting for the prosecution and one for the defence - would give evidence on this point? And given the powerful effect that experts are known to have, on judges as well as on lay tribunals such as juries, is it really appropriate that charges as serious as these should be reduced to a battle of experts?
But for some, the proposals do not go far enough. Why should there be Crown immunity? Why, in the case of multinational companies managed in the UK, should it not apply to fatalities which happen overseas? And will it be administered by the Health & Safety Executive (HSE) rather than by the police? Whatever view one takes of the HSE's technical ability, its quality as an investigations and prosecuting authority is extremely variable.
In a poll conducted by the British Safety Council, 40 per cent of those asked said that they believed it was very or fairly likely that directors would resign rather than take on personal responsibility. This surprising result at the very least highlights the need to consider carefully how health and safety is managed. Often, what dignifies itself as a health and safety management system contains much operational detail. The concern would be that in the event of an operational failure, the very fact of that failure being described as managerial by the company opens up the spectre of the court finding that there has been a management failure.
Those who consider this to be a semantic rather than a substantive point should note that what really matters is how the issue will be received by a jury. Those who have reflected on these law changes know that the point will be to prevent charges ever being brought, or at least to prevent the matter being put to the jury. It is highly likely, in the inevitably heart-rending circumstances that will exist in these cases, that many juries will not be reluctant to prosecute companies. There are some who believe that once the verdict is left with the jury, guilt will be established regardless of the evidence and regardless of the judge's summing up. While this gives a pessimistic mpression of a jury's ability to divorce itself from the emotive background to a case, it sums up the nervousness with which much of UK industry now contemplates these reforms.
Steven Francis is a partner at DLA