Corporate Manslaughter and the hand of Senior Management

The Corporate Manslaughter and Corporate Homicide Act 2007 sought to address the difficulty at Common Law in establishing corporate liability for manslaughter through individuals whose gross negligence had to be identified with the ‘controlling mind’ of a company. It was thought that the law needed to tackle corporate liability without concerning itself unduly with the identity of senior figures and their role in the company’s affairs.

The Law Commission’s proposals thus favoured looking more generally at failures in the way a company’s activities were ‘managed or organised’, irrespective of the level of management responsible for the failure.

But during its passage through Parliament a ‘senior management’ test was introduced, because it was felt that the new offence should criminalise ‘truly corporate failings in the management of risk, rather than purely local ones”[1]. In other words, it was considered that a failing in the way activities were managed or organised not across the company but, say, in a local branch or at a junior level should not, however serious the consequences, be regarded as a failing which was ‘corporate’ unless senior management was in some way culpable.

So it came to pass, that s1(3) of the Act provides that ‘An organisation is guilty… only if the way in which its activities are managed or organised by its senior management is a substantial element in the breach.’

‘Senior Management’ is itself defined as ‘the persons who play significant roles in—

(i) the making of decisions about how the whole or a substantial part of (the organisation’s) activities are to be managed or organised, or

(ii) the actual managing or organising of the whole or a substantial part of those activities.’[2]

Although it was anticipated that the definition would of itself cause difficulty, in practice it appears not to have done so, partly because a large proportion of the organisations who have in fact been prosecuted have been small in size, such that identifying individuals who play a significant role is not difficult.

As to the substance of the ‘defence’ provided by s1(3), the very fact that it tends to be smaller organisation who are charged, has practical repercussions. Whereas it is provided that senior management must have played some part in what went wrong, both common sense and experience of such cases suggests that for smaller organisations such protection is more illusory than real.

If despite genuine attempts to implement a good health and safety policy, an accident occurs in the work-place, it may be hard to show that ‘the way in which’ senior management ‘managed or organised’ the company’s activities is not a ‘substantial element’ in a breach of the duty owed to all employees. After all, it will be rare when it cannot be said that the accident would have been prevented if senior management had been more alive to the risk, or more thorough or robust in implementing the necessary safeguards. In that regard the duties of employers under health and safety legislation – and senior management’s failure to discharge them – are bound to come into play, whether or not separate health and safety offences are also charged, as they invariably are, upon the same indictment.

An illustration was provided in a recent Corporate Manslaughter prosecution of a farm partnership.[3] The case concerned incorrect adjustment of trailer brakes. In addition to the farm manager, the farm partnership (who employed him) was prosecuted for corporate manslaughter and an alleged breach of s2 of the Health and Safety at Work Act 1974. In support of the manslaughter count, the prosecution pointed in particular to the statutory duty under s2(2)(c) requiring the partnership as employer to provide ‘such….supervision as is necessary to ensure, so far as is reasonably practicable, the health and safety at work of his employees’. A breach of that provision must, by virtue of s8 of the Corporate Manslaughter Act, be considered by the jury in their deliberation of whether the breach fell ‘far below what can reasonably be expected of the organisation in the circumstances.’[4]

So it was, that although both the manager and the partnership were acquitted, the prosecution’s attempt to secure a conviction for corporate manslaughter involved scrutiny of senior management’s supervisory function.

Such an approach illustrates two consequences of practical relevance to any small or medium sized business faced with the possibility of such a prosecution.

First, an allegation of corporate manslaughter based on a failure by senior management to provide adequate supervision, is capable of confusing two different aspects of an employer’s duty: work-place supervision on the one hand and monitoring of system by senior management on the other. The former involves a system whereby lower level managers and supervisors monitor standards in detail at coal-face or shop-floor level. The latter is to provide at higher levels necessarily selective monitoring which provides assurance that the former is in place.[5]

Second, it is inevitable that following a work-place accident, the smaller the organisation, the more exposed senior management becomes to the charge that it has itself failed adequately to discharge a supervisory responsibility. Senior management in a small organisation may in fact have direct responsibility for monitoring or supervising the actual implementing of standards in the work place.  Delegation of such a role is both expensive and often impractical.

A further worrying aspect of the CDFP case arose from the operation of s8(2) of the CM Act where the alleged breaches of Health & Safety legislation were wholly subsumed in the particulars of the Corporate Manslaughter charge (which included a failure to supervise); this coupled with the reverse burden operating by way of s40 HSWA created the situation where the jury were being invited to use breaches of Health & Safety legislation on precisely the same facts (but for which a different burden and standard of proof applied) when assessing the grossness of any breach of duty. There are elements of circularity and double jeopardy in such an approach which are unlikely to have been intended by parliament.

Whereas on the one hand it may seem desirable that the closer senior management is to the detail of what went wrong, the more it should shoulder the blame, the net effect is that corporate manslaughter as an offence is more likely to be prosecuted when the guiding hand of senior management (or its culpable absence) is thus readily discernible in close proximity to the accident.

The result is that smaller organisations are more at risk of a prosecution for Corporate Manslaughter following a workplace fatality, not by reason of some corporate policy or culpable corporate indifference to risk at a senior level, but because it is easier to point the finger at those with a direct responsibility for supervising the very activity which gave rise to the accident.

It is suggested that this is far from what was intended when the draftsman used such phrases as ‘the way in which’ the organisation’s ‘activities are managed or organised’. The Act surely envisaged something more fundamental than a failure of first-instance supervision, but in practice smaller businesses potentially face the harsh reality of a corporate manslaughter prosecution if that responsibility falls to someone who can be described as part of senior management.

A review of prosecutions since the 2007 Act came into force, compared with section 2 HSWA 1974 prosecutions during the same period, may demonstrate that SMEs are disproportionality prosecuted for corporate manslaughter in the event of a fatality in the workplace. If so, it would be interesting to discover the reason why. Inevitably, the senior management of a smaller organisation will operate closer to its workforce. Given the original driver for reform, it would be ironic if larger companies were less likely to be prosecuted because of the remoteness of senior management from its workers and their day-to-day activity.

Andrew Oldland QC, Langdon QC, Lee Bremridge.

If you would like more information on this topic, please contact Andrew Oldland QC,  Senior Partner.