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Corporate Manslaughter Act

On 6 April 2008, the Corporate Manslaughter and Corporate Homicide Act 2007 came into force, creating an offence of corporate manslaughter in England, Wales and Northern Ireland and, in Scotland, the offence of corporate homicide. Read on to find out how the Corporate Manslaughter Act affects your business and what your responsibilities are.

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The Act has a major impact on the health and safety needs of companies as it makes it 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.

Under the Act, an employer can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care.

A gross management failure occurs where the company's conduct fell far below that which could reasonably be expected of it. Companies 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 legislation is a corporate responsibility and not 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. Fines can be up to 10% of the annual turnover of companies. The first company to be convicted under the Act was fined £385,000 to be paid over 10 years.

Also 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.

It is crucial that you 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 and document this with them.
     
  • Empower them 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 a "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.

How the Forum can help

Forum membership includes comprehensive legal expenses insurance, plus Directors & Officers cover to protect company directors. We can also advise you on managing health and safety in the workplace to prevent accidents from happening. For more information, call us now on 0845 130 1722.

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