Corporate manslaughter: Prepare!

Tom Stocker of Pinsent Masons considers the impact of the Corporate Manslaughter and Corporate Homicide Bill on the construction Industry

The Corporate Manslaughter and Corporate Homicide Bill (the "Bill") is currently subject to Parliamentary scrutiny and the new law could be in force later this year.

The Bill is systemic of a change in attitude in favour of investigating organisations for manslaughter following work related deaths.

The Government's own Regulatory Impact Assessment estimates there will be five more corporate manslaughter cases per annum as a result of the proposed changes to the corporate manslaughter laws. This could be a gross under-estimate.

The effects on a company and its employees of being investigated for such an offence can be really quite enormous.

Investigations alone are hugely disruptive. Prosecutions are rare, but when they happen they are long, costly and distressing.

It is therefore extremely important that the risk of being subject to such a case is always properly managed.

The proposed offence

An organisation will be guilty of corporate manslaughter if a gross management or organisational failing causes a person's death. The new offence will apply to management failings by an organisation's senior managers - either individually or collectively.

Not every "management failure" which causes death, however serious, will result in a company being prosecuted for manslaughter.

The failure must be at senior management level. A person is a "senior manager" if he plays a significant role in the making of decisions about how the whole or a "substantial part" of the organisation is to be managed or organised, or he plays a significant role in the actual managing or organising of the whole or a substantial part of those activities.

Plainly, the Bill aims to catch the failings of both strategic management and those who manage operations.

This means that persons in modest positions in the overall hierarchy of an organisation will in some circumstances be covered by the senior management test.

The difficulty for the construction industry is in determining who will be considered to be a senior manager. For example, will the project or site manager at a construction site be considered to be involved in the managing of a substantial part of the organisation's activities? Much will depend on the value of the project in comparison to the turnover of the company as a whole.

A gross failure is defined as conduct which "falls far below what can reasonably be expected of the organisation in the circumstances". In assessing whether there has been a gross failure, the proposed law will require a consideration of whether the organisation complied with health and safety legislation and guidance.

If a health and safety breach is established, the jury must then consider (a) how serious the failure was, and (b) how much of a risk of death resulted from the failure.

Furthermore, the jury will need to consider whether the attitudes, policies, systems or accepted practices within an organisation were likely to have encouraged or produced tolerance of non-compliance with health and safety law.

It will be for the jury to assess whether any breaches of health and safety law and guidance are sufficiently serious to warrant convicting for manslaughter.

Unfortunately, with hindsight, failures can often appear worse than they actually were. What is clear is that the line between a health and safety offence and a corporate manslaughter offence will not be one that is easy to draw.

Construction Design and Management Regulations 2007

For the construction industry, it will be particularly important to comply with the Construction Design and Management Regulations 2007 (the "CDM Regulations").

The CDM Regulations will come into force in April 2007 and will represent the single most important set of regulations covering construction work in Great Britain.

The CDM Regulations substantially increase the responsibilities on many parties to a construction project, in particular the role of the client and the "co-ordinator".

Adequate resources and time must be given to prepare for and plan the carrying out of the construction works. Competency is a very important principle; no person should be appointed and no person should accept an appointment unless they are competent. The principal contractor is explicitly given a key role in managing the construction phase, namely to ensure that the contractors they engage are competent and adequately resourced and to plan, manage and monitor the construction phase in a way that ensures, so far as is reasonably practicable, it is carried out safely and without risk to health.

The Construction Phase health and safety plan must be reviewed, revised and refined as often as may be appropriate, and the principal contractor must ensure the plan is properly implemented. Further duties are placed upon all contractors to ensure the Client is aware of his duties under the CDM Regulations, and to ensure that all works are planned, managed and monitored.

Going forward

The Bill will inevitably lead to greater consideration of corporate manslaughter charges following work related deaths. Certainly, most work related deaths will be investigated as corporate manslaughter cases. Prosecutors will be eager to establish the parameters of the new offence. As such, care will need to be exercised and legal advice from the outset will be recommended when dealing with the authorities following a work related fatality.

Companies will also need to consider the proper delegation of health and safety responsibilities down the management chain. Directors should not take on health and safety management responsibilities that they are not competent to undertake. Any person that is given health and safety responsibilities will need to be competent and have sufficient authority to ensure that health and safety risks are all properly managed.

More then ever, the Board of Directors will need to have a role in promoting health and safety management because of the need to demonstrate that there existed a health and safety compliant culture. Trade Unions have been critical that companies will escape liability by delegating safety down the line. We do not believe this will be a weakness in the proposals.

If senior managers abrogate their responsibilities by delegating to juniors without sufficient competence, then that will be their failing. In contrast, there ought to be a defence if senior managers delegate responsibility to juniors who are competent, and monitor those juniors' performance.
In light of the significance of this legislation it would be sensible for organisations to review their health and safety policies, arrangements and systems in advance of the Bill becoming law.

Recommended steps

Determine who could be considered a "Senior Manager" and assess their competency;
Review health and safety policies to ensure the standards set are clear and achievable;
Increase health and safety training for all levels of management;
Review procedures to ensure compliance with existing health and safety laws, the CDM Regulations, and consider steps to promote a health and safety culture;
Put in place an accident management protocol for dealing with the authorities;
Take specialist legal advice from the outset in the event of a serious incident, so that legal privilege can apply to your incident investigation report and individuals receive correct advice before police/HSE interviews.

Tom Stocker is Senior Associate and Head of Pinsent Masons' Health and Safety team, based in Scotland.