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Murder in the Boardroom: corporate recklessness to be brought to justice.

11 January 2008

With the implementation of the Corporate Manslaughter and Corporate Homicide Act coming into effect in April 2008, it will be easier to take action against companies whose negligence kills.

Over the last few years we have seen many high profile tragedies in the press such as the Herald of Free Enterprise and the Southall and Paddington train crashes, where in each case, a catalogue of errors occurred and a multitude of people killed or injured and yet under the old law it was difficult to pin the blame on specific senior managers and obtain justice for the victim’s families.

Insurance companies seem of the view that the new legislation will cost companies millions. Not necessarily so provided they review their practices and procedures to make sure that they are complying with health and safety requirements and can demonstrate that reasonable procedures and policies are in place to minimise risk to those individuals to whom they owe a duty of care as outlined below.

It must not be forgotten that partnerships, trade unions and employer’s associations where employers will be affected as much as companies.

Senior managers will need to look closely at how they manage and organise their business’ activities because if this is a substantial element in causing a person’s death or amounting to a gross breach of a duty of care owed by the business to that person, the organisation may be guilty of an offence under the new Act. A jury will look at health and safety breaches and whether there are attitudes, systems, policies or accepted practices within an organisation in determining guilt.

A duty of care extends to employees and service providers; where a business occupies premises; the supply of goods or services; carrying out construction or maintenance operations; any other activity on a commercial basis or keeping or using plant vehicles or other thing. The duty of care is therefore extremely wide and businesses should review their policies to minimise the risk of committing any offence.

The Court has the power under the new Act to make an order requiring the organisation to take remedial action within a specified time frame. Worse, the court could require an organisation to publicise the fact that it has been convicted of an offence, the details of the offence, the amount of any fine imposed and the terms of any remedial order. Such publication will not be good for business and failure to comply could lead to a hefty fine.

Under the Act is states that an individual cannot be guilty of aiding, abetting, counselling or procuring the commission of an offence of corporate manslaughter. However, the liability of directors under health and safety law or general criminal law, will be unaffected. A corporate body itself and individuals can still be prosecuted for separate health and safety offences.
 
Susan Jennings head of the Corporate Team says “We work closely with companies and can offer health and safety advice to ensure that businesses have relevant policies and procedures in place. The aim is to ensure that senior managers act responsibly in their management of the company and in so doing avoid the commercially damaging prospect of prosecution or fine.”

For more information contact Susan Jennings

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