Corporate Manslaughter and Corporate Homicide Act 2007: a quick guide

This quick guide provides a brief summary of the Corporate Manslaughter and Corporate Homicide Act 2007.

For a more detailed analysis of the Act, see Practice note, Corporate Manslaughter and Corporate Homicide Act 2007.

This is one of a series of quick guides, see Quick guides.

 

Why is it important?

The Corporate Manslaughter and Corporate Homicide Act 2007 (Act) came into force on 6 April 2008 and applies to the whole of the UK. Directors should be aware of its provisions because an organisation may incur significant penalties if convicted of corporate manslaughter under the Act. In particular, these penalties include:

• Financial penalties. The court can impose an unlimited fine.
• Damage to reputation. Where appropriate, the court can force an organisation to publicise the conviction.

The Act does not apply retrospectively.

What does the Act do?

It creates a new offence: corporate manslaughter for organisations

The new offence is known as corporate manslaughter in England, Wales and Northern Ireland and as corporate homicide in Scotland.

The new offence replaces the common law offence of manslaughter by gross negligence for companies. An organisation will be guilty of the new offence if all of the following apply:

• The way in which its activities are managed or organised causes a person's death.
• The person's death is the result of a gross breach of a relevant duty of care owed to that person.
• The way in which senior management managed or organised the organisation's activities is a substantial element of the breach.

What constitutes a gross breach?

"Gross breach" means conduct that falls far below what can reasonably be expected of the organisation in the circumstances

The Act sets out certain factors that a jury must take into account when deciding whether an organisation is guilty of the new offence, namely:

• Whether the organisation was in breach of health and safety legislation.
• How serious the management failure was.
• How much of a risk there was of death occurring.

It also sets out a non-exhaustive list of factors that a jury may take into account, including any health and safety guidance relating to the breach and whether there were any attitudes, policies, systems or accepted practices in the organisation that were likely to have encouraged a management failure.

What types of duty of care are covered?

The Act deals primarily with health and safety matters but is not limited to these

The types of duty of care covered by the new offence include a duty owed by an organisation to employees or other persons working for the organisation, a duty owed as an occupier of premises and a duty owed in connection with:

• The supply of goods or services.
• Carrying out any construction or maintenance operations.
• Carrying out any other activity on a commercial basis.

In most cases, the duty of care is likely to arise in a health and safety context. However, it might be possible to prove a duty of care arises in a different context (for example, under environmental law).

Who does the new offence apply to?

The new offence applies to all organisations operating in the UK

Such organisations include:

• Companies.
• Partnerships.
• Trade unions and employers' associations.
• Certain government departments and public bodies, as well as the police force.

The new offence does not apply to individuals, such as company directors or managers. However, the common law offence of manslaughter by gross negligence continues to apply to individuals.

If a company is prosecuted under the new offence, the company (and/or its company directors and managers) could still be prosecuted for any breaches of health and safety or other laws.

What are the consequences of breaching the Act?

There are penalties consisting of unlimited fines and remedial and publicity orders

An organisation committing the new offence will be subject to a trial in the Crown Court by judge and jury. The maximum penalty is an unlimited fine as determined in accordance with the Sentencing Guidelines Council: Corporate Manslaughter and Health and Safety Offences Causing Death: Definitive Guideline (www.practicallaw.com/7-501-4437). In addition, the court may make:

• A remedial order. This forces the organisation to remedy the management failure that caused the death.
• A publicity order. This forces the organisation to publicise the conviction. Only available for offences committed under the Act on or after 15 February 2010.

For details of the first prosecution under the Act, see Practice note, Corporate Manslaughter and Corporate Homicide Act 2007: Prosecutions (www.practicallaw.com/7-376-0094).

Potential headaches

There is uncertainty about how the provisions of the Act operate in practice

Particular issues to watch out for include:

• What constitutes a "gross breach of duty of care"? While case law should clarify this, initial prosecutions are likely to involve lengthy and complex trials.
• Who falls within the definition of senior management? Senior management is defined as being those persons who play a significant role in the management of the whole, or a substantial part, of the organisation's activities. Identifying which employees fall within this category can be difficult.
• Liability of parent companies. Under the Act, parent companies are only liable if their "own management failures" were a cause of the death concerned. It is unclear how this will apply.
• Insurance. If there is a successful criminal prosecution for corporate manslaughter, insurance cover will not be available to the company for any fine or costs order. If a defence is successful, cover may be available for any legal costs incurred. The precise basis depends on the policy, so companies should check the position with their insurers.