Corporate manslaughter: How it will affect your business

From 6 April 2008, a new offence of corporate manslaughter now applies in England, Wales and Northern Ireland, called corporate homicide in Scotland. The 2007 Corporate Manslaughter and Corporate Homicide Act amends the law on corporate manslaughter, setting out a new statutory offence.

Companies of all sizes should understand the background to the new Act, and be fully aware of all the implications for their operations.

Statistics show that more people are killed each year at work than are killed in wars throughout the world. In the UK, a series of high-profile accidents led to renewed calls for changes in the law following failed prosecutions against large companies and against individuals for manslaughter. Incidents such as the capsizing of the Herald of Free Enterprise, the King's Cross fire, the Piper Alpha oil installation disaster and the Paddington rail crash led to pressure to change the law.

Importantly, the new Act holds organisations accountable for the actions and decisions of their senior managers, rather than one single individual, a key failing under the previous law. It will be easier to convict organisations whose senior managers have breached their duty of care, causing death.

In essence, a crime is committed where an organisation causes death by the way in which it manages and organises its activities, and where a gross breach of their duty to take reasonable care for a person's safety has occurred. Organisations will find themselves liable if there is a corporate culture that allows dangerous practices to go unchallenged that leads to death. The Act does not target individuals as the focus is on senior management failure.

To convict a company it must be proven that the failure came substantially from people deemed to be senior management. If an organisation is found to be guilty, there are a range of penalties that can be applied: unlimited fines, remedial orders, and the imposition of a publicity order.

The Act places greater responsibility on all managers and directors to make sure that they're fully compliant with all the necessary health and safety legislation, so they're not at risk of prosecution if a serious accident occurs. If an organisation fails to address these issues it may be exposing itself to extremely serious consequences, and may find that its reputation and standing severely damaged.

In the light of this legislation it's vital that all companies are fully aware and informed at all levels with the implications of the new law.