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New sentencing guidelines have shown up shortcomings in corporate manslaughter legislation, says expert

Out-Law Analysis | 21 Sep 2017 | 4:32 pm | 4 min. read

ANALYSIS: The impact of the new sentencing guidelines for health and safety offences has shown up the fundamental shortcomings of the dedicated legislation dealing with corporate manslaughter and corporate homicide.

The 2007 Corporate Manslaughter and Corporate Homicide Act (CMCHA) has only delivered 25 successful prosecutions since it came into force nine and a half years ago, and those have  predominantly been of smaller organisations. Meanwhile, around 30 fines of over £1 million have been issued for incidents prosecuted under the 1974 Health and Safety at Work Act (HSWA) and subordinate legislation in the 18 months since the new sentencing guidelines came into force.

When the CMCHA received Royal Assent, it was widely thought among commentators that the legislation created an overly narrow approach to establishing corporate liability. The statistics appear to have confirmed these concerns, with the requirement to show that substantive failure falls at the feet of senior management in larger organisations proving arguably as problematic under the CMCHA as under the previous common law.

In light of major incidents in the media spotlight re-opening calls for organisations to be held to account for corporate manslaughter, is the CMCHA fit for its original intended purpose? And should the Crown Prosecution Service (CPS) and the courts continue to pursue corporate manslaughter proceedings given the dramatic increase in potential fines for fatal and non-fatal offences under the HSWA?

Background to the CMCHA

CMCHA was introduced in response to a number of large-scale disasters, including the Piper Alpha oil rig disaster, the Kings Cross station fire and the sinking of the P&O Ferries' Herald of Free Enterprise. It introduced a new means of establishing liability through the actions of senior management, in place of the existing need under the common law to find the 'directing mind' of the company to be 'at fault'.

This concept, known as the identification doctrine, was believed to have hindered prosecutions given that in large modern companies, decision-making is complex and taken at various levels, making it almost impossible to identify individuals of sufficient seniority whose actions were so reprehensible that they could be found to be the actions of the company.

Under CMCHA, an organisation can be found liable where it causes the death of a person to whom it owed a duty of care, and that breach is sufficiently serious to be considered 'gross'. The test for 'gross', however, remains an extremely high threshold to surmount, although it is defined more clearly by way of statutory guidance. Senior management must play a substantial role in the gross breach which causes death - that is, a substantial element of any breach needs to be in the way those activities were managed or organised by senior management.

The rationale for this change and the removal of the identification doctrine was that this would facilitate prosecutions of larger companies and bring home the importance of health and safety - a mantra we have heard again recently, with the introduction of the new sentencing guidelines. However, the requirement under CMCHA to identify "senior" management, and for such senior management to be "substantially" at fault, has done little more than broaden the scope of the previous identification doctrine.

The meaning of management failure

The 2016 prosecution of Maidstone and Tunbridge Wells NHS Trust, although unsuccessful, perhaps came closest to establishing a broader understanding of management failure. In his judgment, Mr Justice Coulson suggested that if "senior management issues" such as resource allocation, recruitment and supervision were grossly flawed then this might open the gateway to the prosecution of larger organisations. As it turned out, the case collapsed and with it any potential insight into how the senior management test would be applied to a larger organisation.

However in most, if not all, health and safety cases fault can often be attributed to many different aspects of the company, right down to the operative's method of working on the day. Very rarely is there one single factor which results in a fatal incident. It is the difficulty of demonstrating that "senior management failure" was a "substantial cause" which is perhaps the biggest hurdle to overcome for the CPS.

The strict liability attached to more HSWA offences makes these evidentially much easier to prove, and the statistics demonstrate that the vast majority of these prosecutions are successful. Why, then, would the CPS still seek to pursue charges of corporate manslaughter against a larger organisation when the prospects of success are so remote?

Financially, for large organisations - and 'very large organisations' in particular - it is not beyond a judge's wit to move beyond the fines indicated by the guidelines in the case of a successful HSWA prosecution, especially where there are aggravating factors. For a very large organisation with very high culpability, it is not unthinkable that the notional £10m ceiling will be breached, bringing into play fines in the same realm as the £20m ceiling attached to corporate manslaughter.

Some commentators would no doubt answer that a 'manslaughter' prosecution is of significantly more reputational damage than one brought under HSWA, and of course this opens up the prospects of a publicity order against a prosecuted company. However, a successful prosecution under HSWA can still bring significant reputational damage. It begs the question of whether a simpler way of addressing the CMCHA's perceived failures against larger organisations would have been the upgrading of any fine which uncovers "gross management failure".

Legislative change should always be based on sound legal and moral principles. However, a decade on the CMCHA appears to have been overly conservative and its focus on substantive senior management failings has failed to capture the corporate liability it sought to achieve. Had the offence of corporate manslaughter simply required an organisation to have breached its duty of care, and for that breach to have been gross, the CMCHA would likely have resulted in more prosecutions - and certainly, more prosecutions of larger entities. However, such a straightforward test would have been problematic for an offence involving manslaughter designed to address the worst types of failing. Given its track record and the difficulties in satisfying every element of the offence when compared with the sums at stake under the new sentencing guidelines and the ease of meeting the evidential burden under HSWA, there is some merit in thinking that the corporate manslaughter regime may now be redundant.

Simon Tingle is a health and safety law expert at Pinsent Masons, the law firm behind Out-Law.com.