Monday 8 September 08 - 09:12
 

Business

Death sounds a wake-up call

A death on company premises could lead to a charge of corporate killing against the company or a director or senior manager, says Carole Ferguson, a barrister specialising in corporate criminal defence litigation at law firm Berrymans Lace Mawer.

Envisage - your company is swarming with people. The press, environmental officers, Health and Safety officers and Police officers are all there following a serious accident that could result in the death of an employee.

Before you know where you are, the officers are not only taking statements from those involved, seizing documents and articles, but they are also expecting you to answer - under caution - questions which may implicate the company or yourself in the commission of a criminal offence.

You know, or ought to know, that such an investigation may lead, if the employee dies, to a charge of corporate killing against the company and similarly against yourself, personally, as a director or senior manager, for the overwhelmingly serious offence of manslaughter.

On top of the offences faced, by the company and yourself, there is also the possibility that you could face disqualification from acting in a management role in the future.

You could therefore not only lose your job but face imprisonment or a large fine and have criminal record for manslaughter. You and your company will also have to suffer your name and picture being splattered all over the front of the national newspapers and programmes.

In fact, these are only some of the consequences of the proposed government bill on corporate killing and manslaughter. It appears as if the case may be that sometime in the first half of the year it is anticipated that the proposal will be moving along the path to becoming law.

The introduction of such a bill will have immense consequences on every type of establishment in Britain which provides employment.

This extension of the previous law to apply to all undertakings means that the law will apply to all "employing organisations" with the obvious exclusion of government bodies. This will encompass around 3.5 million businesses including noncorporate undertakings, partnerships and unincorporated charities and even to one and two-person businesses.

At the other end of the scale, a wealthy holding company will not be allowed to establish a relatively impecunious subsidiary to allow risky practices to be undertaken, so this practice will no longer be a way to evade liability, thereby making it possible for holding companies to be defendants.

A corporation will be judged simply by the results of the collective efforts in ensuring the health and safety of its workforce rather than the main impediment of current law of having to identify a single individual who is the "controlling mind" of the corporation responsible for the deaths. Now, all that will need to be shown is that the corporation's conduct caused the death in that its conduct "fell far below what could reasonably be expected."

While individuals would continue to be prosecuted for manslaughter, in cases where the cause of death is a "management failure", the company itself could be convicted of the new offence, thereby ridding the requirement to find the one "controlling mind". The extinguishment of the old law and the conception of the new creating an offence of "corporate killing" will allow prosecutions to be brought against employers and should result in making convictions substantially easier to secure.

Another matter that gives rise for concern is whether directors, "simply by virtue of being directors of a company responsible for loss of life", should be defendants. This, unsurprisingly, has been the subject of much comment in the consultation process.

Once the authorities have conducted their investigations and interviews, the decision as to who is to be charged and for what offences will then be decided upon. It may well be that the company faces the offence of corporate killing and you - as the individual director - face a separate charge of manslaughter.

Where the offence can be proved in the Crown Court before a judge and jury the sentences and sanctions which could be imposed include unlimited fines and the imposition of remedial orders against the organisations convicted of corporate killing. Other possible consequences include imprisonment for directors, fines and the additional sanction for imposing action against a particular director for disqualification.

At present sentences tend to be postponed: for example an 18 month sentence postponed for two years if the convicted person and their business is not successfully prosecuted again.

What, therefore, are the implications for organisations?

There will be an almost mandatory requirement for a company to review its organisation and, if need be, install further precautionary measures before the implementation of the new act.

Companies must develop a balanced approach to safety, know the risks and how to reduce them to an acceptable level by pragmatic approaches.

To prevent accidents it is advisable to learn from the mistakes of others - trade associations could assist in this.

Directors themselves must keep up to date on health and safety issues to ensure that the systems in place are consistent and of the highest standards possible. The board may require legal advice on how to achieve the balance between realistic and legalistic approaches.

Scrutiny of management systems and control of these systems will become a main turning point in considering whether a company's standard has fallen far below those reasonably expected. This could, as a consequence, assist investigators in identifying and proving that more senior level members had direct day to day knowledge of operational practice and procedures.

Unfortunately conducting such checks will be compulsory for a company that wants to ensure it has satisfactory management practices in place.

Appraisals of the conduct of corporate management, past and present, of those acts and omissions which constitute the company's safety performance will be investigated by officers to ascertain any management failure. Companies will therefore have to improve on systems for monitoring the quality of health and safety and potentially undertake risk assessments of safety systems.

Company directors and board members will have to accept their collective role in providing health and safety leadership.

The inevitability of the new offences and consequences of such sanctions should be a wake-up call to all undertakings and board members. It would be a timely and advisable, if not a preventative measure, for businesses to begin assessing and amending the management systems it currently possesses so as to ensure that its conduct does not fall far below the level expected.

Kids go Free !