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QBE (the global Insurance giant) paper on Corporate Manslaughter. The present government has been planning for almost 10 years to introduce tough legislation to take organisations to task when serious failings in health and safety lead to the death of an individual. The result is the Corporate Manslaughter & Corporate Homicide Act 2007, which received Royal Assent on 20 July 2007 and will come into full force on the 6th of April 2008. This issues forum will explore the provisions and implications of the new Act, and look at the framework of measures senior management should already have in place to ensure the effective health, safety and welfare of their employees, keeping them from under the spotlight of prosecution.

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  2. 2. THE ‘DON’T KILL BILL! ’ THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 QBE believe that best practice organisations are those where senior individuals facilitate and engage in the robust management of health and safety. We pro-actively encourage our clients to set in place the necessary organisational structure, systems and strategies to meet their moral, legal and financial obligations. The question of how to hold organisations to account after major disasters has been the subject of an ongoing debate for many years. The Zeebrugge ferry disaster, which led to the deaths of more than 150 passengers and nearly 40 crew, some 20 years ago, brought the issue firmly into the public spotlight with the public enquiry identifying “a disease of sloppiness” and negligence at every level of the company’s hierarchy. Despite an inquest jury returning verdicts of unlawful killing, there were no convictions of individual or corporate manslaughter. The present government has been planning for almost 10 years to introduce tough legislation to take organisations to task when serious failings in health and safety lead to the death of an individual. The result is the Corporate Manslaughter & Corporate Homicide Act 2007, which received Royal Assent on 20 July 2007 and will come into full force on the 6th of April 2008. This issues forum will explore the provisions and implications of the new Act, and look at the framework of measures senior management should already have in place to ensure the effective health, safety and welfare of their employees, keeping them from under the spotlight of prosecution. 2 THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007
  3. 3. WHAT IS THE CURRENT POSITION? The current law of corporate manslaughter links an organisation’s guilt to the gross negligence of an individual who is said to be the embodiment of the organisation. It has proved very difficult to prosecute large organisations. Since 1992, there have been 34 prosecutions for corporate manslaughter of which only 6 have resulted in conviction. Notably, the only successful prosecutions have involved small companies where the individual in question was intimately involved in the health and safety activities. A company may also be found guilty WHAT OFFENCE WILL IT CREATE? of breaching the main provisions of The Act creates a new statutory the Health & Safety at Work Act etc offence in England, Wales and 1974 (HSWA) if it has failed to take all Northern Ireland of “Corporate reasonably practicable steps to ensure Manslaughter”, and “Corporate the health and safety of its employees Homicide” in Scotland. Corporate and those affected by its business. manslaughter is a term used in English This duty of care obviously extends Law to reflect an act of homicide to fatalities and can lead to unlimited committed by a company as opposed fines. The HSWA contains provisions to an individual. In a case following the to find directors, officers and managers Zeebrugge ferry disaster, the court of personally liable and potentially appeal confirmed in principle that a subject to imprisonment, where a company can commit manslaughter, health and safety offence has been albeit that all the individual defendants committed by the company with in that case were acquitted. their consent or connivance, or is attributable to their neglect. An organisation will be guilty of the offence of corporate manslaughter WHY THE NEED FOR CHANGE? if the acts or omissions of senior management cause a person’s death. With manslaughter charges and The failing could be either a single or unlimited fines already a possibility series of errors, which directly lead to a under current health and safety gross breach of the duty of care owed legislation, this is a valid question. by the employer to the deceased. The answer may partly lie in the current social climate where individual responsibility is increasingly seen to be hidden behind the façade of large organisations, which themselves cannot be taken appropriately to task. Fines solely levied against organisations are not seen to be an appropriate punishment for a fatality, where the 3 THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007
  4. 4. individual is seen as an innocent party. WHAT DOES THE NEW ACT DUTY OF CARE This view has been heightened by the ACTUALLY CHANGE? The key elements of the existing media after similar cases to Zeebrugge For all the attention this piece of framework for corporate manslaughter such as Piper Alpha, the Kings Cross fire legislation has received, it actually are retained with the new Act i.e. the and the Southall rail crash, where brings with it no new legal obligations organisation must have owed a duty attempts to prosecute these corporations for employers. What it does do is allow of care to the deceased, there must and their senior management under the for the accumulation of what might have been a breach of that duty and law of gross negligence manslaughter be a series of collective errors to the breach must be “gross”. In cases came under significant difficulty and demonstrate that the defendant was where an employer is charged with the ultimately failed. deficient in managing an effective death of an employee, the existence The difficulty with the existing law of of a relevant duty of care will nearly health and safety management system. corporate manslaughter is that it does always be straightforward. However, The main focus of the Act is to not reflect the realities of the modern some scenarios could potentially establish the grounds upon which an corporate environment. Before a involve a number of organisations with organisation, rather than an individual, company can be found guilty, an overlapping duties e.g. construction can be found guilty of the offence of individual who is a “controlling mind” projects. This could lead to cases with corporate manslaughter. Moving away of the organisation must first be found multiple defendants. It is also possible from the need for an individual personally guilty of the offence. It is that safety consultants and related “controlling mind” to be identified, this “identification principle” that has experts could be included among an organisation will be guilty of the led to serious difficulties in prosecuting defendants if their advice or services offence if the way in which its activities medium to large organisations with are deemed deficient. Regulatory are managed or organised by senior diffuse management/corporate bodies such as the HSE are excluded management amounts to a gross structures, and where health and safety (except for their own employees), and breach of the duty of care owed to has traditionally been delegated to a there are special provisions limiting a person, and that breach results in lower tier of management and health the duty of care owed by the the person’s death. The prospect of & safety professionals rather than the emergency services. individual liability under the Act is controlling/directing mind. Under the specifically excluded. It should be noted that the duty of present law, it is not possible to add up The intention of the Act is not to let care is not just to employees but will the negligence of several individuals individual directors off the hook but also apply to third parties arising from to show the company as being grossly rather seeks to encourage management operations, including as occupier of negligent. In reality it is always likely to to adopt an approach of collective premises, construction and maintenance be the combined acts or omissions of senior management responsibility work, supply of goods and services, individuals and/or processes, none of for issues of health and safety that use of vehicles and plant, and all which can individually be qualified as permeates the organisation rather commercial activities. For example, manslaughter, which lead to a fatality. than being concentrated in a single in relation alleged fatalities caused It is telling that in recent times the by the supply of defective products, department or individual. All company courts have awarded more significant manufacturers and suppliers will be directors and senior managers will now fines for breaches of health and safety required to demonstrate systems in be required to take an active interest legislation. It may well be that these place for safety and quality checks on in these matters and to ensure fines have been in response to the all supplied parts and ingredients as that health and safety is a prime difficulties of bringing corporate well as the finished product. Product consideration in their business if they manslaughter charges under the recall procedures will be required wish to avoid seeing their actions, or current legal framework i.e. a where goods have been supplied omissions, result in a court appearance perceived need to over-compensate that are potentially faulty. should a fatal accident arise from a to satisfy public demand. “gross breach” of their duty of care in this regard. 4 THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007
  5. 5. GRAVITY THRESHOLD FOR PENALTIES BREACH OF DUTY In addition to an unlimited fine, the Breach of a duty of care is to be Act introduces a power for the courts regarded as “gross” if the organisation’s to impose a remedial order on a conduct falls “far below what can convicted organisation to force it to reasonably be expected of the resolve any management failure that organisation in the circumstances”. may have been a cause of death. Given the potential for wide Arguably the most effective aspect interpretation of this standard, the Act of the act will be to reclassify conduct provides further guidance in applying already an offence, under existing the “gravity threshold”. Factors that a legislation, with the more stigmatising jury will be required to consider include: term of corporate manslaughter • Whether the organisation failed to (corporate homicide in Scotland). If comply with any relevant health there was any doubt that a prosecution and safety legislation. under the new law would not attract the desired attention, the Act allows • If they did, how serious was the for “publicity orders”. This will allow failure and how much of a risk of the courts to force convicted death did it pose? organisations to publish details of their • The extent of the organisation’s offence and penalties at their expense. compliance with relevant health and safety guidance. • Whether the evidence shows that there were “…attitudes, policies, systems or accepted practices within the organisation that were likely to encourage any such failure or to have produced tolerance of it.” In addition to the guidelines here, employers would be well advised to consider the sentencing factors used in previous health and safety prosecutions. For example, in the case of R&F Howe & Son (Engineers) Ltd (1999) Mr Justice Scott Baker suggested that the more serious aggravating features of a prosecution would include: putting profit before safety; failing to heed previous warnings; deliberate or reckless breach of safety; and how far short of an appropriate standard the defendant fell. 5 THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007
  6. 6. IMPACT In a regulatory impact assessment of the Bill, the Home Office estimated that the new Act will result in the number of prosecutions for the offence of Corporate Manslaughter rising from the current one or two to around 10-13 additional prosecutions a year. This would represent prosecutions for 3-4% of work-related deaths. The cost of prosecuting and defending these actions will inevitably rise from current levels, given that the scope of the investigation required to identify the “management and organisation of activities” and the “attitudes, policies, systems or accepted practices within the organisation” seems likely to require a great deal of time and effort, not to mention disruption to the day IMPLICATIONS FOR SENIOR clearly documented safe working to day working of the organisation in procedures, relevant training and question, during the period of MANAGEMENT competence but also that these investigation. It is also arguable that it The new legislation serves to highlight processes were stringently applied will be easier to find companies guilty and re-enforce the importance of across the organisation and regularly of the offence when the conviction of addressing health and safety issues reviewed to ensure that they were a director, with direct responsibility for at a high level. Directors and other at all times a good fit to changing the breach of duty, is no longer a pre- “senior management” should take the circumstances. That is to say that they requisite to the conviction of the company opportunity to review the management are “managing the activities” of the for the offence of manslaughter. Fines are of, and responsibilities for, health and organisation as the Act implies should likely to be set at a level at least equal to safety in their own organisations and be the case. The evidence reviewed those currently levied on organisations ensure they have appropriate and will demonstrate more than compliance found guilty of breaches of the HSWA effective health and safety processes. with legislation but also effective that result in a fatality. The management system should implementation and improvement Perhaps of greater concern is the identify the appropriate structure, staff when the need arises.It may also prove stigma likely to be attached to an responsibilities, competencies and necessary to periodically call upon the organisation found guilty of the new culture combined with a pro-active services of external health and safety, offence, and the potential auditing framework that demonstrates and risk management experts in order consequences for its reputation and conformity and seeks continual to benchmark and validate organisations’ brand image. A key threat arising from improvement. endeavors against best practice. a prosecution will be the harm that it Senior managers will not be able to Particularly important will be to ensure might have on the company’s brand, demonstrate that they have discharged that procedures, expected standards particularly in today’s climate where their duties by simply delegating and practices are communicated and supplier chain integrity is of paramount health and safety responsibilities to demonstrated to employees and other importance. Indeed, one can more junior managers and health and potentially affected persons in a clear hypothesise that marketing safety professionals. They are to be and effective manner so as to help departments may, for the first time, encouraged to display leadership and formulate the necessary “attitudes… take an interest in their organisations’ play active individual roles in health and accepted practices” (a clear approach to health and safety and safety strategies and demonstrate reference to safety culture) within management! not only appropriate risk assessments, an organisation. 6 THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007
  7. 7. The Act fails to fully define the sort of “health and safety guidance” to which an organisation might be expected to have consulted and acted upon in the context of an alleged breach but this will undoubtedly include material such as ACOPs, HSE Guidance and British Standards. There may also be no restrictions on a jury looking at wider industry guidance, research reports etc. The HSE website will provide a useful starting point, with its facility for searching by industry type or health and safety topic. Organisations under the spotlight will be hoping that the courts and juries take a pragmatic and realistic view on the issues of foreseeability and what is reasonably practicable in the unique and particular business circumstances they may face. It is also important to remember that KEEPING UP TO DATE – TIME TO TAKE ACTION? while the new law has no impact on individual liability, prosecutors will still CONTINUOUS IMPROVEMENT The good news is that the explanatory be able to target directors and senior The Act effectively requires of notes to the Bill state: “There is executives for gross negligence in the organisations that they make, and no question of liability where the conduct of their management roles for their own sake record, every effort management of an activity includes under Section 37 of the HSWA. Also, to keep abreast of developments reasonable safeguards and a death the new Act will be in addition to, and in health and safety in their line of nonetheless occurs”. With the provisions will not replace the existing Scottish business. Organisations, on completion of the Act not due to come into force offence of Culpable Homicide, and the of their risk assessments, should review until April of next year, there is time existing Common Law manslaughter and introduce new engineering and yet for organisations to address any offence under which individuals and other “higher order” hierarchical shortcomings in their governance directors / owners of small businesses solutions through product or process structure, policies and systems. It must have previously been successfully to minimise the risk of identified be recognised, however, that prosecuted for manslaughter offences. hazards. Trend analysis of incidents company-wide attitudes and accepted should include corrective actions to practices may take more time to reduce future occurrence or severity. change. For the majority of organisations with registration to a recognised management system e.g. ISO 9001, ISO14001 or BS OHSAS 18001, the process of Plan, Do, Check and Act to improve will be recognised. 7 THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007
  8. 8. GUIDANCE FOR DIRECTORS COMPLIANCE AND BOARD MEMBERS Taking a basic compliance approach, “Revitalising Health & Safety” was the the general duty of care owed by joint Government and HSE strategy, employers to employees and others launched in 2001, to inject some affected by their business is outlined impetus into the health and safety under the HSWA and further expanded agenda. At that time they produced on in the Management of Health and guidance, within the context of wider Safety at Work Regulations (MHSWR). corporate governance, outlining Some of the basic framework directors’ and board members’ requirements are as follows:- responsibilities for Health and Safety • The HSWA requires that you need to (INDG343). While guidance does not prepare, and make sure your workers hold the same legal weight as statutory know about, a written statement of duties or Approved Codes of Practice, your health and safety policy and the in the context of establishing grounds arrangements in place to put it into for a prosecution under the new Act, it effect. will be highly relevant. In the guidance, five main principles were set out:- • These general duties on employers are expanded and explained in the 1. The board must accept formally MHSWR, which include requirements and publicly its collective role in for employers to assess the work- providing health and safety leadership; related risks faced by employees and 2. Each member of the board needs by people not in their employment; to accept their individual role in • To have effective arrangements achieving this; in place for planning, organising, 3. All board decisions must reflect controlling, monitoring and WHAT DOES SENIOR the intentions expressed in their reviewing preventive and MANAGEMENT BEST protective measures; health and safety policy statement; PRACTICE LOOK LIKE? • To appoint one or more competent 4. The board must recognise its role While there has been much attention in engaging the active participation persons to help in undertaking the to the arrival of the new legislation, of workers in improving health measures needed to comply with there has been, as yet, little commentary and safety. health and safety law and; on how an organisation and its senior • To provide employees with management can mitigate the prospects 5. The board must be kept informed of all risk management issues, comprehensible and relevant of a successful prosecution against information on the risks they face them. Inevitably, there is some uncertainty preferably by the appointment of a health and safety director. and the preventive and protective as to how the various tests for measures that control those risks. establishing systemic management At the time of writing, the HSC in failures will apply in practice and this conjunction with the Institute of is likely to remain the case until Directors were due to publish updated precedents are set and pored over. guidance for directors on their health However, there is well established and safety responsibilities. This guidance guidance out there as to what directors (INDG417) entitled Leading health and and senior managers should be safety at work: leadership actions for doing already. directors and board members is now available for free download from the corporate manslaughter pages of the the HSE website. 8 THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007
  9. 9. MANAGEMENT SYSTEMS CONCLUSIONS AUTHOR BIOGRAPHIES With the Act focussing on systemic Organisations who fail to recognise Mark Black, Liability Risk Manager failures to manage health and safety in this Act as a significant and subtle Mark joined QBE in 1998 serving 6 organisations, it follows that the piece of legislation will do so at their years as a liability claims inspector multitude of work-related hazards peril. It removes many of the barriers before joining the Liability Risk requires a systematic approach to to a successful prosecution under the Management team in 2004. He holds health and safety management. In existing legal framework and without an honours degree in Risk recent years, one of the predominant question, stigma and reputation / Management and the Nebosh National management tools has been formal brand damage will be the Act’s biggest Diploma in Occupational Safety and occupational health and safety weapon. Demonstration of effective Health. management systems. The reference management systems and a risk aware Jonathan Coatman, Claims Controller under the MHSWR to having effective safety culture are likely to be key Jonathan is a liability specialist within arrangements for planning, organising, battlegrounds at trial. The acts and the QBE Strategic Claims team based controlling, monitoring and reviewing omissions of senior individuals will be in London. His role primarily involves preventative and protective measures under the microscope as never before. the management of claims with (or Plan, Do, Check, Act) provides FURTHER INFORMATION significant financial value in the areas similarity of many familiar management of employers' liability, public liability systems approaches to health and More information can be found on the and professional indemnity. Jonathan safety, such as HSG65 and BS OHSAS HSE website: and the also provides technical input to the risk 18001, which strive for continual full contents of the Act can be viewed at management, underwriting and improvement as their overarching actuarial functions within QBE and on intent. The organisations that use a 20070019.htm behalf of external clients through management system as a framework briefing notes, articles and consultancy. for being pro-active will be able to demonstrate their integrity as opposed to those organisations who use a QBE certificate of accreditation as lip service. Plantation Place, Organisations should be mindful of 30 Fenchurch Street, hiding behind a veil of compliance London, or third party certification to EC3M 3BD management systems as all they t: + 44 (0)20 7105 4000 need to do. The new legislation will f: + 44 (0)20 7105 4019 be able to permeate and interrogate organisations that pay lip service to such matters, demanding evidence of a pro-active and holistic inter- departmental management (i.e. non- silo) approach to health and safety that is embedded in the wider culture of the organisation and led from the most senior management positions. 9 THE CORPORATE MANSLAUGHTER & CORPORATE HOMICIDE ACT 2007 NOVEMBER 2007
  10. 10. Dear reader Thank you for taking the trouble to read this publication. QBE Risk Management believe that best practice organisations are those where senior individuals facilitate and engage in the processes of sensible risk management. We make this document available to all interest parties in an effort to share knowledge and promote good practise. Our services are available only to clients insured by QBE in Europe. Our insurance products are sold through insurance brokers. We cannot offer advisory services to anyone else, however we would be delighted to hear if you have found this document useful or believe there are risk management issues that do not receive appropriate attention in the media. Regards QBE Risk Management Team email: Disclaimer This document has been produced by QBE Insurance (Europe) Limited (“QIEL”). QIEL is a company member of the QBE Insurance Group. Readership of this Forum does not create an insurer-client, advisor-client, or other business or legal relationship. This Forum provides information about the law to help you understand and manage risk within your organisation. Legal information is not the same as legal advice. This Forum does not purport to provide a definitive statement of the law and is not intended to replace, nor may it be relied upon as a substitute for specific legal or other professional advice. QIEL has acted in good faith to provide an accurate Forum. However, QIEL and the QBE Group do not make any warranties or representations of any kind about the contents of this Forum, the accuracy or timeliness of its contents, or the information or explanations (if any) given. QIEL and the QBE Group do not have any duty to you, whether in contract, tort, under statute or otherwise with respect to or in connection with this Forum or the information contained within it. QIEL and the QBE Group have no obligation to update this report or any information contained within it. To the fullest extent permitted by law, QIEL and the QBE Group disclaim any responsibility or liability for any loss or damage suffered or cost incurred by you or by any other person arising out of or in connection with your or any other person’s reliance on this Report or on the information contained within it and for any omissions or inaccuracies. QBE European Operations Plantation Place 30 Fenchurch Street London EC3M 3BD tel +44 (0)20 7105 4000 fax +44 (0)20 7105 4019 QBE European Operations is a trading name of QBE Insurance (Europe) Limited, no.01761561 ('QIEL'), QBE Underwriting Limited, no. 01035198 ('QUL'), QBE Management Services (UK) Limited, no. 03153567 ('QMSUK') and QBE Underwriting Services (UK) Limited, no. 02262145 ('QSUK'), whose registered offices are at Plantation Place, 30 Fenchurch Street, London, EC3M 3BD. All four companies are incorporated in England and Wales. QIEL and QUL are authorised and regulated by the Financial Services Authority. QUL is a Lloyd's managing agent. QMSUK and QSUK are both Appointed Representatives of QIEL and QUL.