Corporate manslaughter then and now: It can happen to you
There has been an increasing amount of comment of late concerning the Corporate Manslaughter and Corporate Homicide Act 2007. Its on-going implications are in danger of taking precedence over all other compliance risks for senior managers. Here we look at how we arrived here and what may happen in the future.
Corporate manslaughter was not a new concept in 2007 when the Corporate Manslaughter and Corporate Homicide Act 2007 (the 2007 Act) went onto the statute books. Prior to that, it was possible for a corporate body to be found guilty of manslaughter following a health and safety-related fatality. However, it was necessary to prove that in the defendant corporation there was a senior individual(s) who could be said to embody the organisation — usually referred to as the “controlling mind” — and whose gross negligence amounted to manslaughter. This was difficult to prove beyond all reasonable doubt. The only successful prosecutions were against small organisations where the direct causal link between the events and the controlling mind could be established to the satisfaction of a jury, e.g. R v Kite and OLL Ltd (1994).
However, in larger organisations the chains of management responsibility made it difficult, if not impossible, to prove there was any controlling mind that directly led to the events. In other words, larger corporations had little, if anything, to fear from such a prosecution.
What the 2007 Act did was to remove the need to prove a controlling mind exists in an organisation. Instead, it became necessary to prove that the senior management’s failure in terms of how the organisation activities are managed and controlled amounted to corporate manslaughter. While individual directors and other employees cannot be prosecuted under the 2007 Act they can, of course, be concurrently prosecuted for other health and safety offences relating to the fatalities concerned, including gross negligence manslaughter.
Lack of consistency
Before looking at the impact of the 2007 Act, there are two other factors not always considered in relation to the whole question of corporate manslaughter. It could be argued that, prior to the 2007 Act, the investigation of deaths in the workplace was not consistent throughout the UK and that this situation has now changed.
In Scotland corporate manslaughter is known as corporate homicide and, unlike in the rest of the UK, there is consistency in the way that investigations are managed. The Scottish legal system is rather different from that in England and Wales. Firstly, there is no coroner as such, and sudden deaths, including those in the workplace, are investigated by a Procurator Fiscal. This is a sort of regional state prosecutor who holds a Fatal Accident Enquiry after an investigation.
The Procurator Fiscal, as well as being a state prosecutor, directs all criminal investigations, instructing the police and working in close liaison with the Health and Safety Executive (HSE), among other agencies. This was a big difference from England and Wales prior to the Act, where investigations were directed, typically, by the HSE or the police, as they saw fit.
In England and Wales, there is now a set of guidelines: the Work-related Deaths National Liaison Committee’s protocol WRDP1 09/11 Work-related Deaths: A Protocol for Liaison (England and Wales). This was first published in 1998 and is now in its third edition. The Crown Prosecution Service (CPS), the HSE, local authorities, police forces and certain other enforcement agencies now operate to a common approach to investigating work related deaths and any subsequent prosecutions.
No multi-agency system with many local decision makers is perfect, or entirely consistent, and there will be at least some variations in response and investigative approaches in different parts of the country and at different times. For example, workplace near misses that could have led to death or incidents leading to serious injuries may receive far less scrutiny — if any at all — than a fatality will. This is even before one starts to consider the question as to whether local authorities actually enforce health and safety law in the same way as the HSE.
There is now much more joined-up thinking about investigating work-related deaths, some of which prior to 2007 may have received little, if any, state investigation or enforcement action. Some senior managers may see this as an additional risk to the business, but one way to prevent having to worry about the 2007 Act is by making sure near misses are properly investigated internally, whether one thinks there will be an enforcement investigation or not. Near misses can be a precursor to fatal incidents in the future.
The other key point about corporate manslaughter is that it is no different from some other trends in corporate compliance, e.g. the Bribery Act 2010, where there is shift towards making organisations, rather than just their employees, criminally liable. In saying that, the CPS’s recent trend has been to prosecute individual directors for various health and safety offences — including gross negligence manslaughter in some instances — as well as prosecuting a corporation under the Act. The Lion Steel case in 2012 (R v Lion Steel Equipment Ltd) has provoked much comment in this regard.
Some have argued that such cases can be seen as a tactic to encourage the corporation (whose directors make decisions on its behalf) to enter a guilty plea in return for the prosecution not proceeding against them individually. Sometimes when this strategy is used, there is also a potential advantage to the prosecutor in that one defendant could provide evidence against a fellow defendant(s) either before or during the trial and claim their own innocence in the process. This is sometimes called a “cut-throat defence”. Would everyone in your senior management team stand shoulder to shoulder together in such circumstances? If one looks at prosecution approaches in the USA for various offences relating to corporations, these strategies, among others, are often seen as valid approaches to achieve justice. Whether this seems right or not is immaterial — it is the current reality — and needs to be responded to like any management challenge.
However, prosecutions are still sometimes launched against individuals rather than corporations, and not necessarily senior employees. One example is the recent case of R v McGee where a train guard was convicted of gross negligence manslaughter relating to the death of passenger.
One of the original arguments behind the 2007 Act was that major shareholders or other stakeholders (to put it very plainly) were uninterested in director or employee convictions because such people could be replaced, whereas a prosecution against the corporation would be taken more seriously. This was, perhaps, an oversimplification. The world of spin works both ways. Negative publicity impacts on share prices and market share and, in the case of a public or voluntary sector body, could impact on future funding and scope of operations. Of course, this is even before we get into issues such as consumer perception of ethical behaviour and social responsibility, which have become high profile issues in recent months. Reputation impacts on the bottom line; if not today, then certainly tomorrow.
The reality of the 2007 Act is that corporations are separate legal entities, but their decisions are made by human beings. As well as provoking prosecution strategies it should also provoke the “controlling minds” to avoid any notion that accidents and occupational ill health happen elsewhere or, perhaps, choose to believe their zero accident pledges somehow happen as if by magic. Fortuity is for fortune tellers, not senior managers.
Almost all accidents and near misses have a causal link. Where a particular combination of unexpected events leads to a safety incident, it then begs the question what led to these circumstances and whether, next time, it could lead to a fatality. Senior management need to ensure there are resources devoted to such investigations in addition to the usual mantra of proper risk assessment, safe systems of work and, at strategic level, business or operational risk assessment.