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FeedsHome: June - July 2006 › Corporate Manslaughter Bill: update
Corporate Manslaughter Bill: update
31/07/2006 | Channel: Franchises, Health & Safety
RHYS GRIFFITHS and GUY BURMAN look at the progress of the Corporate Manslaughter Bill and some of the practical implications for those in the rail industry.
The Corporate Manslaughter and Corporate Homicide Bill had its first reading in the House of Commons in July 2006. The Bill was amended in Standing Committee and a revised Bill was published on 31 October 2006.
The current law
An organisation will not be convicted of corporate manslaughter unless a ‘directing
mind’ can be shown to have been grossly negligent in the person’s death (known as the ‘identification principle’).
Given that many organisations have complex management structures, it can be very difficult to locate that ‘directing mind’. Examples from the rail industry include the
corporate manslaughter charges laid against Network Rail and Balfour Beatty following the Hatfield rail crash, which were dropped because no ‘directing mind’ could be identified. The Bill will need to find a practical replacement for the identification principle.
The senior manager test
The first draft of the Bill permitted an organisation to be prosecuted if its activities
were managed or organised by its senior managers in such a way as to amount to a
gross breach of a relevant duty of care, and that breach caused a person’s death.
Organisations may be subject to unlimited fines and remedial orders if convicted.
Some interested parties called for individual liability for directors and senior managers to be included in the Bill. Others argued against this proposal because it
might discourage individuals from taking senior posts. As the Bill stands, individuals
cannot be guilty of any new offences (although they may still be liable under existing criminal law principles and health and safety legislation).
An important element of the offence was the ‘senior manager test’. The aim of the
test was to exclude corporate manslaughter prosecutions where only a junior person
made a mistake. The test was criticised for a number of reasons. Rail industry
commentators submitted that the UK rail industry is diverse and comprises large and
small organisations with variable management structures, so that ‘senior
managers’ may be as difficult to find as ‘directing minds’ are under the current law.
Some also feared that the test might make convictions easier to secure against smaller organisations because ‘senior managers’ are easier to identify in smaller
organisations.
The Government accepted that the test needed to be improved. John Reid said that
any new test would “take into account the management of the fatal activity generally
within the organisation”, although the prosecution would still need to prove that a ‘substantial element’ of the organisation’s failure came from the senior management level.
Standing Committee – the new senior management test
The reference to senior managers was adapted during the Standing Committee debate. An organisation will now be guilty of an offence if:
A. The way in which its activities are managed or organised amounts to a gross
breach of a duty of care owed by the organisation to the deceased; and
B. The way in which the senior management organised or managed its activities was a substantial element of the breach.
‘Senior management’ are those people who play significant roles in:
A. The making of decisions about how the whole or a substantial part of the organisation’s activities are to be managed or organised; or
B.The actual managing or organising of the whole or a substantial part of those
activities.
The new test is designed to permit an examination of how the activity was
managed at all levels, although the management of health and safety at the
senior level would have to be lacking before the organisation could be found guilty. As Gerry Sutcliffe, Parliamentary Under-Secretary of State for the Home Office, said during the Standing Committee debate, “the question will be whether the organisation overall was negligent, and it is difficult to see how the organisation overall could be guilty if the senior management were diligent in their approach to health and safety”.
In order to minimise the risk of being found guilty of corporate manslaughter, senior management must therefore take the lead on creating, managing and updating health and safety policies.
Who are your ‘senior management’?
The aim of the definition of ‘senior management’ in the Bill appears to be to catch those people who play a significant role in making policy decisions and/or executing those decisions in an organisation, where those decisions affect the whole or a substantial part of the organisation. This would appear to invite the following consequences:
The Bill is expected to receive Royal Assent
during 2007.
Rhys Griffiths is a commercial litigation
solicitor and Guy Burman is a trainee
solicitor at Field Fisher Waterhouse LLP.
Tel: 020 7861 4000
Email: guy.burman@ffw.com and
rhys.griffiths@ffw.com
Web: www.ffw.com
The current law
An organisation will not be convicted of corporate manslaughter unless a ‘directing
mind’ can be shown to have been grossly negligent in the person’s death (known as the ‘identification principle’).
Given that many organisations have complex management structures, it can be very difficult to locate that ‘directing mind’. Examples from the rail industry include the
corporate manslaughter charges laid against Network Rail and Balfour Beatty following the Hatfield rail crash, which were dropped because no ‘directing mind’ could be identified. The Bill will need to find a practical replacement for the identification principle.
The senior manager test
The first draft of the Bill permitted an organisation to be prosecuted if its activities
were managed or organised by its senior managers in such a way as to amount to a
gross breach of a relevant duty of care, and that breach caused a person’s death.
Organisations may be subject to unlimited fines and remedial orders if convicted.
Some interested parties called for individual liability for directors and senior managers to be included in the Bill. Others argued against this proposal because it
might discourage individuals from taking senior posts. As the Bill stands, individuals
cannot be guilty of any new offences (although they may still be liable under existing criminal law principles and health and safety legislation).
An important element of the offence was the ‘senior manager test’. The aim of the
test was to exclude corporate manslaughter prosecutions where only a junior person
made a mistake. The test was criticised for a number of reasons. Rail industry
commentators submitted that the UK rail industry is diverse and comprises large and
small organisations with variable management structures, so that ‘senior
managers’ may be as difficult to find as ‘directing minds’ are under the current law.
Some also feared that the test might make convictions easier to secure against smaller organisations because ‘senior managers’ are easier to identify in smaller
organisations.
The Government accepted that the test needed to be improved. John Reid said that
any new test would “take into account the management of the fatal activity generally
within the organisation”, although the prosecution would still need to prove that a ‘substantial element’ of the organisation’s failure came from the senior management level.
Standing Committee – the new senior management test
The reference to senior managers was adapted during the Standing Committee debate. An organisation will now be guilty of an offence if:
A. The way in which its activities are managed or organised amounts to a gross
breach of a duty of care owed by the organisation to the deceased; and
B. The way in which the senior management organised or managed its activities was a substantial element of the breach.
‘Senior management’ are those people who play significant roles in:
A. The making of decisions about how the whole or a substantial part of the organisation’s activities are to be managed or organised; or
B.The actual managing or organising of the whole or a substantial part of those
activities.
The new test is designed to permit an examination of how the activity was
managed at all levels, although the management of health and safety at the
senior level would have to be lacking before the organisation could be found guilty. As Gerry Sutcliffe, Parliamentary Under-Secretary of State for the Home Office, said during the Standing Committee debate, “the question will be whether the organisation overall was negligent, and it is difficult to see how the organisation overall could be guilty if the senior management were diligent in their approach to health and safety”.
In order to minimise the risk of being found guilty of corporate manslaughter, senior management must therefore take the lead on creating, managing and updating health and safety policies.
Who are your ‘senior management’?
The aim of the definition of ‘senior management’ in the Bill appears to be to catch those people who play a significant role in making policy decisions and/or executing those decisions in an organisation, where those decisions affect the whole or a substantial part of the organisation. This would appear to invite the following consequences:
- The terms ‘significant’ and ‘substantial’ will generate substantial litigation. During the Standing Committee debate Gerry Sutcliffe indicated that ‘significant role’ will take in those who influence the way in which decisions are taken and management is conducted and ‘substantial part’ would mean large, noteworthy, more than minimal etc. Although this gives the definition flexibility, which must be a good thing, it also creates uncertainty.
- Despite the intention behind the new definition, will there be a substantial change compared to the current identification principle? If the requirement to identify senior management forms part of the test for liability, will there be more prosecutions?
- Finally, will the senior management test be more effective against smaller organisations as the identification principle is (it is clearly easier to find a ‘directing mind’ in an organisation with ten people than it is to find the same person in an organisation of thousands)? If so, then the new statutory offence may have an uneven impact throughout the rail industry with its diverse array of organisational structures.
The Bill is expected to receive Royal Assent
during 2007.
Rhys Griffiths is a commercial litigation
solicitor and Guy Burman is a trainee
solicitor at Field Fisher Waterhouse LLP.
Tel: 020 7861 4000
Email: guy.burman@ffw.com and
rhys.griffiths@ffw.com
Web: www.ffw.com
