Corporate Manslaughter and Corporate Homicide Act 2007

The Corporate Manslaughter and Corporate Homicide Act 2007 is a landmark in law. For the first time, companies and organisations can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care.

The Act, which came into force on 6 April 2008, clarifies the criminal liabilities of companies including large organisations where serious failures in the management of health and safety result in a fatality. Although the new offence is not part of health and safety law, it will introduce an important new element in the corporate management of health and safety.

Prosecutions will be of the corporate body and not individuals, but the liability of directors, board members or other individuals under health and safety law or general criminal law, will be unaffected. And the corporate body itself and individuals can still be prosecuted for separate health and safety offences.

The Act also largely removes the Crown immunity that applies to the existing common law corporate manslaughter offence. This is consistent with Government and HSC policy to secure the eventual removal of Crown immunity for health and safety offences. The Act provides a number of specific exemptions that cover public policy decisions and the exercise of core public functions.

The Government's Sentencing Advisory Panel has proposed that those found guilty of the new offence of corporate manslaughter which came into force on April 6 th 2008, be fined up to a maximum of 10% of their annual turnover along with naming and shaming on TV, radio and in the national press.

The plan would have paved the way for fines stretching into many millions, a fact which caused consternation amongst business groups and celebration in safety campaigners. Now though, the Sentencing Guidelines Council, the body which rubber-stamps guidance on penalties for new offences, has stepped back and dropped the idea. It is now suggesting that firms guilty of corporate man­slaughter should face 'punitive and significant' fines, which 'may be measured in the millions', and which 'should seldom be below £500,000'.

The SGC has also re-stressed the importance of the publicity orders which the Act allows courts to impose. These force guilty parties to make statements about their convictions and fines, and 'should be imposed in virtually all cases'. Publicity should be designed to ensure the conviction becomes known to shareholders and customers in the case of convicted companies, and to local people in the case of convicted public bodies. The guidelines also suggest that fines for deaths prosecuted under the conventional HSWA 1974 'should seldom be less than £ 100,000', and may be measured in the 'hundreds of thousands of pounds or more'. The SGC is now soliciting responses from interested parties, and has opened a second consultation on the matter, after the first provoked anger from business bodies.

Level of fine
In deciding the level of fine, the SGC says that courts should not be influenced by any impact on share­holders and directors but the effect on the employment status of innocent workers should remain a consideration. Factors that affect how serious the offence is include:

• How foreseeable the accident was
• how common the breach of care in the organisation was
• how far up the organisation the responsibility went
• the number of deaths
• any failure to heed prior warnings
• cost-cutting or deliberate failure to obtain or comply with relevant licenses

Council member and vice president of the Court of Appeal Lord Justice Anthony Hughes said: "The fine is designed to punish and these are serious offences so the fines imposed should be punitive and significant to reflect that. "The Council considered very carefully the approach suggested by the Sentencing Advisory Panel of a fixed correlation between the amount of the fine and a company's turnover or profit, but decided this was not appropriate in view of the different financial structures and circumstances

The Act can be downloaded here.