New Laws for Corporate Manslaughter Up Legal Ante for Businesses

Company directors across the UK are preparing themselves for one of the biggest legislative shake ups to direct corporate accountability in a very long time. The Manslaughter and Corporate Homicide Act comes into force on 6th April 2008 and business lawyers are urging businesses to check their level of risk.

The new law follows events such as the Paddington and Southall rail crashes and the ICL/Stockline explosion which have increased public awareness in regard to the lack of accountability in large private companies.

Roughly 40,000 people have been killed in commercially related circumstances between 1966 and 2006 with 34 companies prosecuted for homicide and seven resulting in convictions. In the past year there have been over 600 fatal work related injuries, with other injuries ranging from amputation of limbs to loss of sight and electrocution.

The old common law system revolved around the “identification principle” which meant a senior individual had to be found to have acted in a negligent manner. Often, the sheer number of workers, managers, senior staff and delegated management systems meant that it was nearly impossible to trace accountability to one specific person; the new system does away with this stumbling block.

The new law creates a specific offence of “corporate manslaughter”. If the company causes a death through bad management which amounts to a gross breach of the company's ‘duty of care’ to the deceased, this could lead to a conviction. The management of the company must be a substantial contributing factor to the death.

The new law does not lower the standard of proof required which is still beyond a reasonable doubt, but if found guilty, companies can be fined an unlimited amount and remedial orders can be made to force the company to remedy the failure leading to the death.

Another tool at the courts' disposal is the use of a publicity order. This would require companies to take out ads specifying the fact they were found guilty and the amount of the fine. This may be particularly useful if the company in question is an established brand or well known name. The new laws will apply to companies, partnerships and for the first time, Crown institutions which were previously immune. However, the new law will not be retrospective.

Although widely accepted as a step in the right direction, it has been suggested by some groups that the reforms do not go far enough. In a 2003 MORI poll for the Transport and General Worker’s Union, 65% of people surveyed felt that workplace safety will only improve if directors can be personally prosecuted. The joint committee report from the Home Affairs and Work and Pensions Committee suggested that individuals as well as companies should be prosecuted, however this was rejected by the government. The Institute of Directors said that “the Home Office now had he opportunity to put forward legislation that will fill a gap in criminal law by creating a workable offence of Corporate Manslaughter”.

It seems victims and families seeking legal advice are not as concerned with placing a monetary value on the death/injury/medical condition but are more concerned with trying to ascertain some accountability and for the company to take responsibility and rectify the failures so that the situation does not repeat itself.

The new laws go some way to making larger companies more accountable but it seems to be the general consensus that they do not go far enough as there is still no direct personal accountability for individual mangers/directors behaving in a grossly negligent manner but hiding behind the public face of the company.