Corporate manslaughter convictions could surge under new Act

Convictions for corporate manslaughter could soar under the new Corporate Manslaughter Act coming into effect on 6 April 2008, according to leading risk, pensions and benefits adviser, Aon. UK companies responsible for rail crashes, ferry disasters and work deaths, which have previously escaped prosecution, could now face a criminal record and unlimited fines, if they do not strengthen their health and safety strategies.

Some 241 people were fatally injured in the workplace in 2006/07 alone (Source: Health & Safety Executive) yet there have only been 34 prosecutions and just six convictions since 1992, according to the Crown Prosecution Service.

Conviction under the former legal framework proved almost impossible as a company could only be convicted if the ìdirecting mindî or senior individual could be identified and found guilty for gross failings leading to the death. Now prosecutions are likely to prove more successful as the court can consider the wider corporate picture by looking collectively at the actions of senior management. The Act does not apply to individuals but directors can still be sued through health and safety civil suits so are still vulnerable, whether the corporate prosecution is successful or not.

Richard Brough, risk control consultant at Aon, said: ìHealth and safety systems are sometimes installed and then only paid lip service as no one actually follows them. Companies must be able to demonstrate that their robust systems are actually working, as this will be a key defence during prosecution. As directors tend not to have any formal training in health and safety, this is where the role of specialist practitioners comes to the fore by helping the board to comply with HSE guidelines, embrace leadership of the strategy and conduct an annual performance review.î

Charlotte Bray, consultant for Aonís Benefits Solutions team, added: ìThe new Act reinforces that the risk management process should commence at the very outset when an employee is recruited to ensure they are fit for the role. Applying such strategies will not only raise awareness of potential ill health among employees but will enable employers to be proactive in their management and be able to demonstrate that they have done something about it. Health surveillance is one of the most specific aspects of ill health prevention or reduction.î

Tom Sheffield, technical director at Aon, commented: ìMPs such as David Blunkett have argued that numerous public disasters and workplace accidents caused by companiesí gross failings have gone without punishment because the government has not previously had good tools to prosecute effectively. This inability to convict has been the largest driving force behind the new Act. Armed with this new law, prosecutors could be eager to put these weapons to the test. As such, this really serves as a wake up call to business to update their health and safety controls for the well-being of their employees and the public.î

Aon is also advising companies to protect their employees and themselves by:

checking directors and officers insurance policies to see if they are covered in relation to the new laws ñ add coverage for both the company and directors so the policy will pay for investigations and defence costs;

implementing training workshops on how to handle a corporate manslaughter crisis in terms of business continuity and communications ñ reputation was cited the biggest risk to companies in Aonís 2007 Global Risk Survey and a conviction could lead to an order to publicise their offence;

ensuring clear governance and internal control regimes in the workplace and that these are effectively enforced. Undertake a gap analysis on their legal and regulatory compliance.