Corporate Manslaughter Act: your responsibilities

19 March 2008

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On 6 April, the Corporate Manslaughter and Corporate Homicide Act 2007 will come into force, creating a new offence of corporate manslaughter in England, Wales and Northern Ireland and in Scotland the offence of corporate homicide.
Read on to find out how this will affect your business and what your new responsibilities are.

The Act will introduce a new offence where there can be a finding of guilt as a result of serious management failures resulting in a gross breach of a duty of care.

The provisions of the Act will have a major impact on the health and safety needs of companies. From that date it will be possible for employers to be prosecuted if someone has been killed at or by work because of a failure in how the company's activities are managed or organised amounting to a gross breach of duty.

A gross management failure will occur where the company's conduct fell far below that which could reasonably be expected of it. Companies will need to show that they have taken all reasonable steps to ensure the health and safety of those who might be at risk.

The Act not only applies to the safety of employees, but also to the customers and clients of the business where they visit premises or use the employers' facilities.

The new legislation is a corporate responsibility and not, as originally perceived, about individual responsibility. Individuals cannot be prosecuted under the act and there is no risk of a prison sentence under the terms of the legislation.

However, the penalties can include an unlimited fine together with remedial orders that require an organisation to put right management failings. The advisory panel's recommendation is that fines could be up to 10% of the annual turnover of companies. Even more damaging for companies is the fact that a court can impose a publicity order providing details of the offence, the fine imposed and any remedies required. Imagine the serious damage that such action could cause to a company's business reputation.

Employers have very little time in which to take certain actions. It is crucial that they consider and review the following:

Identify senior management who might be at risk. Senior management are those persons who play a significant role in the decision making processes of the company. Companies will need to assess their competency.
Ensure that these employees are properly made aware of their responsibility. This should be documented with them. They need to be empowered to deal adequately with the risks that may arise.
Ensure that they receive proper and adequate training. A full training schedule should be prepared and as the training is completed a documentary record is kept. Training should be updated from time to time as and when required with full records being kept.
Review all health and safety policies as well as car user policies and procedures. Ensure that the health and safety policies are adequate for the purpose. Those health and safety policies should be audited and reviewed on a regular basis to ensure that areas of risk are regularly reviewed and checked.
Review policies and procedures for dealing with relevant authorities in the event of an incident leading to a fatality.
Provide adequate health and safety training to senior management and others directly responsible for health and safety within the workplace. Again, that training needs to be properly documented and fit for the purpose.
Ensure that the company promotes a health and safety first procedure and that all employees are encouraged to think about safety and report any issues to those empowered with the responsibility for health and safety. This will help defeat a claim of "gross breach".
The company board needs to receive a regular update on areas that may be affected.
Review insurance policies and ensure that adequate cover is put in place.
Ensure that directors and senior management have access to indemnity insurance to cover them in the event of needing legal help or assistance.

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Corporate Manslaughter Act: your responsibilities

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