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February 27, 2008

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The Corporate Manslaughter and Corporate Homicide Act 2007

The Corporate Manslaughter and Corporate Homicide Act 2007 gained Royal Assent on 26 July this 2007, the culmination of more than 10 years of work by reforming lawyers, activists, and those who resisted it. This Briefing note reviews the Act’s purpose and its implications for health and safety practitioners and the directors and proprietors of organisations they advise.

Background

New legislation was promised in the Labour Party general election manifesto in 1997. Their proposals were based on Law Commission recommendations of 1996 regarding reform of the law on involuntary manslaughter, and over the next 3 years a number of Private Members’ Bills were laid in Parliament. However, there was little Government progress until the Home Office issued a consultation document in May 2000.

Another period of relative inactivity followed until March 2005, when the Government published the first draft of the Corporate Manslaughter Bill for consultation. A joint Home Affairs and Work and Pensions Select Committee published a pre-legislative scrutiny report in December, and the Government responded the following March 2006. A Bill was finally laid before Parliament on 20 July 2006, and moved on to the House of Lords in December 2006.

The Lords concluded their scrutiny on 28 February 2007, however they tabled a number of amendments and the Bill passed back to the Commons. A period of ‘parliamentary ping-pong’ followed, with the Bill passing between the two Houses some eight times over a period of 3 months.

The major point of disagreement related to the way the legislation should apply to ‘deaths in custody’, a point championed by the former chief inspector of prisons, Lord Ramsbotham. Agreement was finally reached on 23 July 2007 at the last possible moment before parliamentary procedure would have rendered the Bill unsuccessful – requiring the whole process to begin all over again in the next session of Parliament.

The major provisions of the Act come into force across the whole of the UK on 6 April 2008. The controversial provisions on deaths in custody will come into force on a later date at the discretion of the Government. The Ministry of Justice has committed to publish guidance on the legislation before Christmas 2007.

Why are the new provisions needed?

Until now, corporate manslaughter (‘corporate homicide’ in Scotland) was an aspect of the common law offence of Gross Negligence Manslaughter. Legal tests associated with that offence mean that, before an organisation could be charged with corporate manslaughter, it was necessary to prove that “a directing mind’ of the organisation (that is, a senior individual who can be said to embody the company in his actions and decisions)”is also guilty of the offence. This is known as the identification principle.

Modern corporate structures tend to be complex, particularly in large organisations, often with many subsidiaries. It is often not possible to identify any one individual who could be considered the embodiment of the organisation, indeed corporate structures are often designed to avoid such a situation to ensure continuity regardless of senior management turnover. In the case of multinational organisations, such decision-making ability might lie outside UK jurisdiction.

Consequently, there have been few successful prosecutions for corporate manslaughter under the existing legal provisions. These have all related to very small organisations, where it has be possible to identify a single individual who was in ultimate control of the company’s activities, and to prove that this individual was personally guilty of the offence of Gross Negligence Manslaughter.

The shortcomings of the common law came to the public eye following a number of major disasters, when prosecutions for corporate manslaughter failed – or were not attempted – because of the problems associated with the identification principle.

Examples include the capsizing of the Herald of Free Enterprise off Zeebrugge in 1987 (197 dead), the Piper Alpha disaster in 1988 (166 dead), the Ladbrook Grove (31 dead) and Hatfield rail crashes (4 dead), and there are numerous other examples.

Bereaved families, survivors, and groups representing victims lobbied for a change in the law. Not only did they want the companies prosecuted for corporate manslaughter, they wanted to see company directors imprisoned for the offences.

Business groups were more reticent. Responsible companies and financial stakeholders agreed it should be easier to hold organisations to account where gross negligence led to fatality. However they were unconvinced of the benefit of imprisoning directors for this offence; whether this would significantly motivate a large organisation; and address the underlying corporate negligence that had led to the fatality. There was also debate over Crown immunity and whether grossly negligent public bodies should be liable for corporate manslaughter.

At each stage of the lengthy path to legislation, conflicting opinions were expressed and debated widely, in Parliament, in the media and in public debate. The key challenge for the Government was to bring forward legislation that would effectively address the shortcomings of the identification principle, be equitable, and strike a balance that would satisfy all key stakeholders.

The Corporate Manslaughter and Corporate Homicide Act 2007

So what is the result? The offence is defined in section 1 of the new legislation as follows:

“An organisation” … “is guilty of an offence [of corporate manslaughter] if the way in which its activities are managed or organised:

a) causes a person’s death, and;

b) amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased”.

The term ‘organisation’ includes bodies incorporated by law or charter, partnerships, trades unions and employers’ associations, as well as police forces and crown bodies listed in a schedule to the Act. This opens the vast majority of organisations to liability.

The new offence takes context from the common law duty of care to persons. This is a well understood and well tried legal concept, and addresses the key interactions between organisations and individuals.

The Act further declares that:

“An organisation 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 breach referred to”

This clause is designed to ensure that only truly corporate failings are caught by the legislation. Individuals’ liability to the offence of Gross Negligence Manslaughter will remain where fatalities result from the acts or omissions of natural persons, rather than from corporate failings. The identification principle is not relevant in such cases and consequently current law is considered adequate for these offences.

 

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