The Corporate Manslaughter Reforms –
Be aware, be prepared
This article appeared in Construction Law in Septenber 2006 and was written by Dr Simon Joyston-Bechal and Tom Stocker of Pinsent Masons, Pinsent Masons.
Dr Simon Joyston-Bechal and Tom Stocker of Pinsent Masons consider the impact of the Corporate Manslaughter and Corporate Homicide Bill on the Construction Industry.
The Corporate Manslaughter and Corporate Homicide Bill (the "Bill") laid before Parliament on 19 July 2006 is the culmination of years of debate on the reform to the corporate killing laws. The Bill proposes to legislate to reform the law in England & Wales and Scotland and the new law could be in force sometime in 2007.
The Bill is systemic of a change in attitude in favour of investigating organisations for manslaughter following work related deaths. The Government's own Regulatory Impact Assessment estimates there will be five more corporate manslaughter cases per annum as a result of the proposed changes to the corporate manslaughter laws. This could be a gross under-estimate. The effects on a company and its employees of being investigated for such an offence can be enormous. Investigations alone are hugely disruptive. Prosecutions are rare, but when they happen they are long, costly and distressing. It is therefore extremely important that the risk of being subject to such a case is properly managed.
The Current Law
Following a work related death the police, with assistance from the Health and Safety Executive, investigate:-
On the face of it this may seem relatively straightforward, but prosecutions following work related deaths have proved to be a vexing issue for prosecutors. Questions such as whether companies should be prosecuted for corporate manslaughter or health and safety offences, and in what circumstances is it right to prosecute individuals, have caused extreme difficulty.
There is a willingness on the part of the Crown Prosecution Service to prosecute work related fatalities as manslaughter cases, with health and safety charges as a back up. This is shown acutely by the prosecution of Gillian Beckingham and Barrow-in-Furness Council who were both originally charged with manslaughter and health and safety offences in relation to the deaths of seven people from legionnaires' disease in 2002. The outbreak resulted from the cancellation by Miss Beckingham (the Senior Architect at the Council) of a contract to ensure that necessary tests were carried out on an air conditioning unit at a building owned and run by the Council. At the first trial in 2005, the Judge dismissed the manslaughter charge against the Council, but the Council were found guilty of contravening the Health and Safety at Work etc Act 1974 in that they failed to ensure so far as reasonably practicable the health and safety of those not in their employment. The Jury failed to reach a verdict in relation to the manslaughter charge against Miss Beckingham. The prosecution, however, subjected Miss Beckingham to a retrial this year for manslaughter. On 31 July 2006, Miss Beckingham was eventually acquitted of seven charges of manslaughter, although she was found guilty of a health and safety offence.
The prosecution of Barrow-in-Furness Council and Gillian Beckingham is demonstrative of the difficulty the prosecution currently face with securing manslaughter convictions. The prosecution of the Council for corporate manslaughter, like the majority of previous corporate manslaughter cases, failed due to the "identification principle" which requires that a senior level individual (in most cases a director or someone of equivalent standing) be personally guilty of manslaughter. As a result of this principle, only seven companies have been convicted of corporate manslaughter under the current law, all of them being small companies where a guilty directing mind could be identified. In larger companies, the senior level people have tended either to be too distant from the culpable decision making, or else they share parts of the failing with no single person having done enough wrong and being senior enough to be the embodiment of the company.
The Government proposed some time ago that this Achilles heel of the current law needed to be addressed to make it easier for larger corporations to be convicted. The difficulty with reforming the law is to define a test which captures the essence of corporate responsibility for work related deaths. This needs to distinguish between failings that are so opprobrious that a prosecution for corporate manslaughter is warranted and less serious failings which do not warrant a corporate manslaughter prosecution and should be dealt with under the existing health and safety laws. The other key debate has been how far down the management tree a failing needs to be to make a company liable for this serious offence.
The Proposed New Test
An organisation will be guilty of corporate manslaughter if a gross management or organisational failing causes a person's death. The new offence will apply to management failings by an organisation's senior managers - either individually or collectively. The focus has therefore moved from the culpable individual to the aggregation of senior managerial responsibility.
Not every "management failure" which causes death, however serious, will result in a company being prosecuted for manslaughter. The failure must be at senior management level. A person is a "senior manager" if he plays a "significant role in the making of decisions about how the whole or a "substantial part" of the organisation is to be managed or organised, or he plays a significant role in the actual managing or organising of the whole or a substantial part of those activities.
The difficulty for the construction industry is in determining who will be considered to be a senior manager. For example, will the Project or Site manager at a construction site be considered to be involved in the managing of a substantial part of the organisation's activities? Much will depend on the value of the project in comparison to the turnover of the company as a whole.
A gross failure is defined as conduct which "falls far below what can reasonably be expected of the organisation in the circumstances". In assessing whether there has been a gross failure, the proposed law will require a consideration of whether the organisation complied with health and safety legislation and guidance. If a health and safety breach is established, the jury must then consider (a) how serious was the failure, and (b) how much of a risk of death resulted from the failure. Furthermore, the jury will need to consider whether the attitudes, policies, systems or accepted practices within an organisation were likely to have encouraged or produced tolerance of non-compliance with health and safety law.
It will be for the jury to assess whether any breaches of health and safety law and guidance are sufficiently serious to warrant convicting for manslaughter. Unfortunately, with hindsight failures can often appear worse than they actually were. What is clear is that the line between a health and safety offence and a corporate manslaughter offence will not be one that is easy to draw.
Construction Design and Management Regulations 2007
For the construction industry, it will be particularly important to comply with the Construction Design and Management Regulations 2007 (the "CDM Regulations"). The CDM Regulations will come into force in April 2007 and will represent the single most important set of regulations covering construction work in Great Britain. The CDM Regulations substantially increase the responsibilities on many parties to a construction project, in particular the role of the client and the "co-ordinator". Adequate resources and time must be given to prepare for and plan the carrying out of the construction works. Competency is an important principle; no person should be appointed and no person should accept an appointment unless they are competent.
The principal contractor is explicitly given a key role in managing the construction phase, namely to ensure that the contractors they engage are competent and adequately resourced and to plan, manage and monitor the construction phase in a way that ensures, so far as is reasonably practicable, it is carried out safely and without risk to health. The Construction Phase health and safety plan must be reviewed, revised and refined as often as may be appropriate, and the principal contractor must ensure the plan is implemented.
Further duties are placed upon all contractors to ensure the client is aware of his duties under the CDM Regulations, and to ensure that all works are planned, managed and monitored.
The Bill will inevitably lead to greater consideration of corporate manslaughter charges following work related deaths. Certainly, most work related deaths will be investigated as corporate manslaughter cases. Prosecutors will be eager to establish the parameters of the new offence. As such, care will need to be exercised and legal advice from the outset will be recommended more than ever when dealing with the authorities following a work related fatality.
However, the main impact of the Bill is to reinforce the importance of compliance with existing heath and safety laws and guidance. It will be particularly important that the statements made in health and safety policies and documents are achievable in reality. Grandiose statements of intent may be best avoided as they could later prove to be a hostage to fortune if the company fails to achieve the standards it has set for itself.
Companies will also need to consider the proper delegation of health and safety responsibilities down the management chain. Directors should not take on health and safety management responsibilities that they are not competent to undertake. Any person that is given health and safety responsibilities will need to be competent and have sufficient authority to ensure that health and safety risks are properly managed. More then ever, the Board of Directors will need to have a role in promoting health and safety management because of the need to demonstrate that there existed a health and safety compliant culture. Trade Unions have been critical that companies will escape liability by delegating safety down the line. We do not believe this will be a weakness in the proposals. If senior managers abrogate their responsibilities by delegating to juniors without sufficient competence, then that will be their failing. In contrast, if senior managers delegate responsibility to juniors who are competent, and monitor those juniors' performance, the this is what the law is trying to achieve and there ought to be a defence.
In light of the significance of this legislation it would be sensible for organisations to review their health and safety policies, arrangements and systems in advance of the Bill becoming law.
Dr Simon Joyston-Bechal is a Partner specialising in Health and Safety at Pinsent Masons; Tom Stocker is Senior Associate and Head of Pinsent Masons' Health and Safety team in Scotland.
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