What you need to know about corporate manslaughter
20th September 2012
A conviction for corporate manslaughter will devastate a business and individual managers – so steps to avoid prosecution are essential. Corporate manslaughter legislation affects all businesses operating in the UK. It doesn’t apply to individuals, such as directors or managers, although they can be prosecuted for the offence of manslaughter by ‘gross negligence’.
The implications of a prosecution under corporate manslaughter legislation go still further: the company, along with its directors and managers can also be charged with breaches of health and safety or other laws.
What makes your business guilty of corporate manslaughter?
Your business will be guilty of corporate manslaughter if:
- The way in which its activities are managed causes a person’s death
- The fatality is the result of a gross breach of a duty of care; and
- The way in which your business’ activities are organised constitutes a substantial element of the offence.
What is a ‘gross breach’?
The legal term ‘gross breach’ means running a business in a way that falls far short of what can reasonably be expected in the circumstances.
A jury must consider a number of factors when deciding whether your business is guilty of corporate manslaughter, including: whether your business was in breach of health and safety legislation; the seriousness of the management failure; and how much risk was involved in the fatal incident.
The jury must also take into account other factors, such as health and safety issues and whether any attitudes, policies, systems or practices contributed to a management failure.
Financial penalties are enormous
Businesses convicted of corporate manslaughter face an unlimited fine that is rarely less than £500,000 and can amount to many millions.
Fines are increased if there is evidence that the business could have anticipated the accident and where breaches of rules were widespread.
A ‘remedial order’ may also be made, requiring your business to resolve specific failings involved in the offence. The court will not usually take into account remedial costs when it imposes a fine, so you may have to pay both the fine and the costs of improving your procedures.
Why few businesses recover from reputational damage
The effect of a publicity order is often ruinous. An order involves the court forcing a business to advertise its corporate manslaughter conviction, frequently including details such as the amount of the fine and the terms of a remedial order.
Insurance cover will not be available to your business if it has been convicted of a corporate manslaughter offence. However, if you mount a successful defence, cover may be available for legal costs. Make sure you check your position with your insurers.
Amanda Webster is a consultant at law firm Harrison Drury.Go Back